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August 30, 1978

CRANE CO. and Pentex Foundry Corporation, Defendants

The opinion of the court was delivered by: TEITELBAUM



 Until August 14, 1974 Crane owned and operated a certain manufacturing plant in New Castle, Pennsylvania. On or about that date Crane sold the facility to Texas International Company whose wholly-owned subsidiary Pentex has since been in charge of the plant's operation. Pentex signed collective bargaining and pension agreements with the Union substantially similar to the ones between Crane and the Union and the parties also signed agreements apportioning pension liability between Crane and Pentex.

 While Crane owned the New Castle facility it employed Messrs. Robert Stitt and Arlen Palumbo. After the sale Messrs. Stitt and Palumbo continued working at the plant under the employ of Pentex until each became disabled. There is no dispute that these employees are disabled or that they are entitled to lifetime pensions. Further, there is no dispute as to the pension benefits accrued both before and after the sale or that Pentex has paid the accrued benefits after sale. What is in dispute is the right to pay only the reduced actuarial equivalent of the benefits accrued before sale. The Union contends that Crane or Pentex must pay the full amount. Crane contends that if Messrs. Stitt and Palumbo are in fact entitled to full benefits that payment is the responsibility of Pentex. Pentex contends that they have no liability because the dispute is over pre-sale pension benefits.

 That is the dispute on the merits of this case. However, it is not the issue presently before this Court. The issue now before this Court concerns compelling arbitration.


 The original pension agreement between Crane and the Union contained a broad arbitration clause, requiring disputes over pension payments to go to arbitration and not to the courts. Crane, however, contends that this agreement is no longer controlling because of a subsequent agreement entered into between Crane and the Union in September of 1974. Paragraphs one and two of that agreement deal with pension rights. They state:

1. ". . . All employees who accept employment by Pentex Will have no rights to any pension, sub, insurance or other benefits from Crane Except as specifically set forth herein.
2. "Employees hired at New Castle by Pentex shall have their eligibility for pensions determined by the total of their continuous service with Crane Company and Pentex, and shall receive pension benefits from Crane as provided in item 14 of the Memorandum of Agreement entered into between Pentex and USW, which describes the separate obligations of Crane and Pentex and Crane accepts its obligations as described thereunder."

 The agreement contains no provision for arbitration.

 The duty to arbitrate a dispute is a contractual duty and not one that can be forced on a party in absence of a contractual arbitration provision. United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S. Ct. 1347, 4 L. Ed. 2d 1409. However, it is also clear that arbitration can be ordered when the contract requiring such a remedy has expired and a dispute arises under the terms of the expired contract. Nolde Bros. Inc. v. Bakery Workers, 430 U.S. 243, 97 S. Ct. 1067, 51 L. Ed. 2d 300 (1977); John Wiley & Sons, Inc. v. David Livingston, 376 U.S. 543, 84 S. Ct. 909, 11 L. Ed. 2d 898 (1964).

 Crane contends that while Nolde is unquestionably valid law it is not applicable to the factual situation here. This is based on Crane's reading of the September 19th agreement as cutting off any rights granted in prior contracts and substituting the rights granted in that agreement. If Crane were correct in its interpretation, this Court would have to refuse the arbitration demand because there would be no binding contractual arbitration provision. However, it is not the view of this Court that the 1974 agreement supplants all previous contractual rights and duties of the parties.

 In the first paragraph of the 1974 agreement it states that employees will have "No rights To any pension . . . benefits from Crane except as specifically set forth " in that agreement. Then the second paragraph goes on to talk about "Eligibility for pensions." Nowhere in the agreement does it actually discuss amounts to be paid to pensioners or the specifics of the plan. Rather, it talks only of who is eligible. ...

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