APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA (D.C. Civ. No. 79-1254)
Before Seitz, Chief Judge, Higginbotham, Circuit Judge, and Meanor, District Judge.*fn*
Fort Pitt Steel Casting (Fort Pitt) appeals from an order of the district court granting summary judgment in favor of the United Steelworkers of America (the Union), and ordering Fort Pitt to arbitrate six grievances filed by the Union.
We commence with an undisputed factual narration. Fort Pitt manufactured and sold steel castings at its plant in McKeesport, Pennsylvania. The Union was the collective bargaining representative for Fort Pitt's production, maintenance and clerical workers. Fort Pitt and the Union executed a three-year collective bargaining agreement on March 3, 1975 (the 1975 Agreement). The 1975 Agreement contains a broad arbitration clause, which provides for the arbitration of "any request or complaint." It also contains a similarly broad no-strike and no-lockout clause, which suspends the duty to arbitrate the grievance in question or other grievances during a strike or lockout. The 1975 Agreement was to expire on March 3, 1978.
Negotiations for a new contract began prior to the expiration date of the 1975 Agreement. When no agreement was reached by March 3, 1978, the Union commenced a lawful strike in support of its bargaining position. Paragraph 144 of the 1975 Agreement provides that either party can strike or lockout in support of its position if an agreement on new contract terms has not been reached within sixty days after one party gave notice of its desire to terminate the contract and to negotiate over certain issues.*fn1
The strike lasted for almost nine months. During this strike the parties continued to negotiate until November 30, 1978. On that date, when the Union refused to accept Fort Pitt's "final offer," Fort Pitt permanently closed the McKeesport facility. The parties then entered into negotiations regarding the effects of the shutdown. When they could not agree to a shutdown settlement, negotiations terminated.
On January 5, 1979 and January 29, 1979, the Union filed a series of grievances. These grievances arose when Fort Pitt, at the time it closed the plant, refused to honor certain obligations that the Union contended were due the employees under the 1975 Agreement. Fort Pitt settled some of the grievances, agreed that one was arbitrable, but contended that the six grievances that form the basis of this suit were not arbitrable under the 1975 Agreement. These six grievances address: (1) The failure to pay severance pay to the employees who were terminated when the plant was closed; (2) the refusal to pay vacation pay to the employees for calendar year 1978; (3) the cancellation of life insurance coverage for all retirees; (4) the improper deduction of social security benefits from pension benefits of retirees; (5) the cancellation or termination of life insurance coverage under the Pension Plan for persons retiring after March 3, 1978; and (6) the refusal to pay Supplemental Unemployment Compensation Benefits (SUB) to the terminated employees or to distribute the SUB fund when operations ceased.
On September 6, 1979, the Union filed suit in the United States District Court for the Western District of Pennsylvania to compel arbitration under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (1976). This suit was delayed pending settlement negotiations, which broke down in November 1979. Fort Pitt requested that the district court permit discovery for the limited purpose of resolving the issue of arbitrability. In response, the Union filed a motion for summary judgment. Fort Pitt filed a cross-motion for summary judgment on five of the six grievances. With respect to the grievance over severance pay, it filed a response that sufficient issues of material fact had been raised to preclude summary judgment. The district court granted the Union's motion for summary judgment, holding that all six grievances filed by the Union were arbitrable, and it ordered Fort Pitt to comply with the grievance and arbitration provisions of the 1975 Agreement.
Fort Pitt attacks the district court's decision on two grounds. First, it argues that Nolde Brothers, Inc. v. Local 358, Bakery & Confectionery Workers, 430 U.S. 243, 97 S. Ct. 1067, 51 L. Ed. 2d 300 (1977), does not control the disposition of this case because: (A) the 1975 Agreement, by clear implication, provides that the arbitration clause shall not survive termination; (B) the Union engaged in a prolonged strike after the 1975 Agreement expired; and (C) the parties bargained to impasse over the severance-pay provision. Second, Fort Pitt argues that even if the arbitration clause survives termination of the 1975 Agreement, each of the six grievances filed by the Union is not arbitrable under the 1975 Agreement.
In Nolde, the Supreme Court held that the arbitration clause of a collective bargaining agreement survives contract termination unless the parties indicate a contrary intent, either expressly or by clear implication. See 430 U.S. at 255, 97 S. Ct. at 1074. Thus, the parties must arbitrate claims that arise under the contract, but are based on events occurring after its termination. In Nolde, the parties had begun negotiations in May 1973 and the contract expired on August 27, 1973. Negotiations for a new contract continued until August 31, 1973, when the company permanently closed its plant in response to the union's threatened strike.
In holding that the arbitration clause survived contract termination, the Nolde Court emphasized the well-established labor policy favoring arbitration as a means of settling labor disputes. The Court noted that although contract termination changes the relationship between the union and the employer, many of the considerations underlying a decision to resolve ...