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INTERNATIONAL UNION OF UNITED BREWERY

April 9, 1974

International Union of United Brewery, Flour, Cereal, Soft Drinks & Distillery Workers of America, AFL-CIO et al, Plaintiffs
v.
Duke & Company, Inc., Defendant


Weber, J.


The opinion of the court was delivered by: WEBER

This is a suit for damages by labor unions on behalf of their members for breach of a Collective Bargaining Agreement by defendant employer. Jurisdiction is founded on 29 U.S.C. § 185(a).

 Both parties have moved for summary judgment and have entered into an extensive set of stipulations as to the truth of facts stated and the correctness and genuineness of documents presented. The defendant Company proffers all of these facts and documents as relevant and material to the issues; the plaintiffs object to the relevancy and admissibility of some of the facts and documents as to the issue here presented.

 We conclude from our examination of the offered evidence that there is no genuine issue as to material facts and that judgment may be rendered as a matter of law.

 It is the plaintiffs' contention that those employees who had satisfied the eligibility requirements for certain types of pension benefits are guaranteed those benefits by the Collective Bargaining Agreement between the parties despite the cessation of operations, the closing of the plant and dismissal of the employees. In support of this claim the plaintiffs argue that the only relevant evidence in the case is the Collective Bargaining Agreement between the parties at the time of the closing, and its predecessor agreements.

 The defendant Company contends that the Collective Bargaining Agreements do not provide any guarantee and that the rights and obligations of the parties, particularly upon the event of termination of the Pension Plan, are determined by the Pension Plan, a separate document from the Collective Bargaining Agreements. In support of defendant Company's contention it offers certain agreed facts and documents, to which plaintiffs object on the grounds of relevancy, more particularly under the parol evidence rule.

 Defendant asserts that the proffered, evidence, apart from the Pension Plan itself, is offered not to alter, vary, or contradict the terms of the Collective Bargaining Agreement, but as evidence that the terms of the Collective Bargaining Agreement pertaining to pension benefits must be read together with the Pension Plan to determine the issue of whether a guarantee of pension benefits survives the termination of operations.

 After many years of operation the Company, then known as the Duquesne Brewing Company of Pittsburgh, shut down its brewery and ceased operations on December 8, 1972. While a Collective Bargaining Agreement was in effect at the time there is no contention in the present case that the Agreement required the Company to continue brewery operations during the term of the Agreement. The 1972 Agreement, Sec. 30, recognizes this:

 
"Nothing in this contract or otherwise shall in any way obligate the company to continue the Brewery operations at any time, if in the sole opinion of the management said operation must be shut down."

 On December 8, 1972, the date of the shut-down of the brewery, the defendant Company terminated the Pension Plan in accordance with the provision of the Pension Plan allowing for termination by the Company at any time.

 At the date of the shut-down and termination of the Pension Plan there were 147 employees who had achieved the requisite age and years of service to be eligible for Early Retirement, 103 employees for a Deferred Pension, and one for a Normal Pension, under the terms of eligibility provided in the Collective Bargaining Agreement. They had not retired on the date of the shut-down and the defendant Company refused to process their applications for pension benefits. It is on their behalf that this suit is brought.

 The plaintiffs' action is based on a provision of the Collective Bargaining Agreement in effect at the time of the shut-down, as follows:

 
Sec. 23
 
"Pensions (a) The Employer shall continue a pension plan financed solely by the Employer which shall provide pensions as follows:"
 
(The following provisions set forth the amount of pension that Employer "shall provide" for employees of various ages and lengths of service, or for disability, and various other conditions of eligibility).

 The plaintiffs' contention is that the language of the Collective Bargaining Agreement is clear and unambiguous, that it requires no extrinsic evidence to aid in its interpretation, and that it creates an unconditional obligation upon the Company to provide for pensions for those employees who have met the age and service requirements established in the Collective Bargaining Agreement. Plaintiffs further argue that no provision in the Collective Bargaining Agreement makes the pension rights dependent upon the continued operation of the plant.

 Defendant relies on the termination provisions of the Pension Plan, and proffers evidence to prove that the Pension Plan must be read together with the Collective Bargaining Agreement to determine its pension obligations.

 The substantive law to be applied in suits under the Labor Management Relations Act, 29 U.S.C. § 185, is federal law, which the courts must fashion from the policy of our national labor laws, resorting to general contract principles and state law to find the rule that will best effectuate the federal policy. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 456, 457, 1 L. Ed. 2d 972, 77 S. Ct. 912. [1957]

 The admissibility of evidence in the federal courts is governed by Rule 43(a) of the Federal Rules of Civil Procedure.

 
"(a) Form and Admissibility. . . . All evidence shall be admitted which is admissible under the statutes of the United States, or under the rules of evidence heretofore applied in the courts of the United States on the hearing of suits in equity, or under the rules of evidence applied in the courts of general jurisdiction of the state in which the United States court is held. In any case, the statute or rule which favors the reception of the evidence governs and the evidence shall be presented according to the most convenient method prescribed in any of the statutes or rules to which reference is herein made. . . ."

 Plaintiffs argue that because the language of the Collective Bargaining Agreement is clear and unambiguous on its face, no parol evidence of the meaning which the parties gave to the unambiguous wording is admissible in evidence. This is rule of evidence of general application; Restatement, Contracts, Sec. 237-244; Williston, Contracts Sec. 631-47; it is the law of the state where this federal court sits, Gianni v. Russell, 281 Pa. 320, 126 A. 791 [1924]. It has been declared to be not a rule of evidence but a rule of substantive law, O'Brien v. O'Brien, 362 Pa. 66, 66 A.2d 309, 10 ALR 2nd 714.

 The rule is riddled by many exceptions (see McCormick, Evidence, pp. 426-454), and its origins may be laid in many instances to the ancient veneration paid to a written document over oral statements, and the fear of the courts that juries may be too easily led astray by oral testimony contradicting the writing.

 The federal courts have rejected parol testimony of the history of collective bargaining negotiations in construing the terms of a written collective bargaining agreement.

 
"We think that ordinarily the language of the contract as finally agreed upon must be construed by the courts in accordance with ordinary rules of construction without reference to the give and take of the bargaining sessions which produced the final terminology. Otherwise we would abandon completely the parol evidence rule when dealing with this type of contract." (p. 477) NLRB v. Gulf Atlantic Warehouse Co., 291 F.2d 475 (5th Cir. 1961).

 However, the parol evidence rule is not applied to exclude such extrinsic evidence as may be incorporated by reference in the written document under consideration. In construing the Collective Bargaining Agreement in question here and its predecessors we find clear references to another document.

 The 1951 Collective Bargaining Agreement between the parties recited:

 
"Pensions: (a) The Employer shall establish a Pension Plan financed solely by the Employer. . ...

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