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REILLY v. WALKER BROTHERS (03/14/67)

decided: March 14, 1967.

REILLY
v.
WALKER BROTHERS, APPELLANT



Appeals from decree of Court of Common Pleas of Montgomery County, No. 63-12896, in case of Francis X. Reilly, William Nolan, William Wentz et al. v. Walker Brothers, International Fastener Research Corporation, Schuylkill Valley Properties, Inc. et al.

COUNSEL

Morris Gerber, with him Wisler, Pearlstine, Talone & Gerber, for defendants, appellants.

Richard Kirschner, with him Richard H. Markowitz, Daniel B. Brandschain, and Wilderman, Markowitz & Kirschner, and Miller, Harwitz & Brandschain, for intervenor, appellant.

Sidney M. DeAngelis, with him Stanley L. Kubacki, and Bean, DeAngelis, Tredinnick & Giangiulio, for plaintiffs, appellees.

Cyril L. Weston, for plaintiff, appellee.

Bell, C.j., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice O'Brien. Mr. Justice Roberts concurs in the result. Mr. Justice Cohen would affirm as to the Reilly Group.

Author: O'brien

[ 425 Pa. Page 2]

Walker Brothers, a manufacturing company, executed a pension plan and trust indenture in December of 1950, setting forth various provisions for the retirement of its employees. On January 3, 1951, Walker Brothers and Local Union B-1088, of the International Brotherhood of Electrical Workers, entered into a pension agreement, implementing the pension plan and trust indenture. This agreement set forth eligibility, the amount of pensions, the determination of continuous service, pension trust, administration, appeals procedure, a pension committee (half of whom would be designated by the Company, the other half designated by the Union) and other general provisions as to the term of the plan ("The terms and conditions of this agreement shall continue in effect until midnight, December 31, 1955 and from year to year thereafter unless amended as follows: . . .") and that if, for any

[ 425 Pa. Page 3]

    reason, the pension plan were dissolved, the way in which the funds would be distributed.

Walker Brothers was desirous of securing some stability in its labor relations and to hold its experienced employees. The pension plan enabled Walker Brothers to hold out the prospect of pensions and, in addition, to achieve substantial savings in taxes under the provisions of the Internal Revenue Code. The pension plan was administered and controlled solely by the representatives of Walker Brothers. The employes made no contribution of their own into the plan, and the Union had no voice in the operation of the plan or its policies or management. Under the terms of the pension plan and the trust indenture under which it was established, Walker Brothers, itself, was divested completely of any interest whatsoever in the pension fund.

In April of 1956, Walker Brothers and the Union, through mutual agreements, amended the pension agreement, extending it through December 31, 1960, and thereafter on a year to year basis unless terminated by either party after having given 60 days prior notice, and, in addition, reduced the necessary time of continuous service from 15 to 10 years, before an individual could share in the fund if it were dissolved.

In the latter part of 1962, Walker Brothers, facing financial difficulties, began a program of curtailing some of its activities with a view toward eventual termination. As a result of this curtailment, on December 28, 1962, over 100 employees of Walker Brothers were laid off. A majority of the employees laid off worked at the Wire Mill, which was completely shut down in January of 1963. Those employees laid off in December consisted of 3 classes; those in the Reilly class, who had already completed more than 10 years of continuous service on the date of their lay-off; the Nolan class, whose continuous service was more than

[ 425 Pa. Page 49]

years but less than 10 years at the date of lay-off, and the Wentz class, who had served less than 9 years at the date of lay-off. During the following 12 months, the company continued to lay off additional employees as part of its plan of terminating its operations.

In October of 1963, the pension agreement was further amended by representatives of the Union and Walker Brothers. This 1963 ...


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