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United Steelworkers of America v. Crane Co.

decided: September 19, 1979.

UNITED STEELWORKERS OF AMERICA
v.
CRANE COMPANY AND ITS SUBSIDIARY, ACHESON MANUFACTURING COMPANY, APPELLANTS



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA D.C. Civil No. 73-1072

Before Adams, Rosenn and Higginbotham, Circuit Judges.

Author: Rosenn

Opinion OF THE COURT

In this case we must examine, under certain collective bargaining agreements, the extent of an employer's obligations for its employees' pensions, when the employer has closed its plant and terminated the pension plan. The United Steelworkers of America ("Union") brought suit under section 301 of the Labor Management Relations Act, 29 U.S.C. ยง 185 (1976), upon two claims: (1) that the Crane Company was reneging on its duty to pay for a particular class of pensions; and (2) that the company had paid less than its required contributions to the pension fund. The district court rendered judgment for the Union on both claims. On appeal by the company, we reverse in part and affirm in part.

I.

Commencing sometime prior to 1950, the Union represented certain employees at a Pennsylvania factory of the Acheson Manufacturing Co., which later became a subsidiary of the Crane Company (collectively, the "employer" or "Crane").*fn1

In 1950 the employer and Union established a pension plan. Article VII, section 2(B), of this plan limited the employer's liability for pension benefits:

The Pension benefits of the plan shall be only such as can be provided by the assets of the pension fund or by any insured fund, and there shall be no liability or obligation on the part of the Company to make any further contributions to the trustee or insurance company in the event of termination of the Plan. No liability for the payment of pension benefits under the plan shall be imposed upon the Company, the officers, directors or stockholders of the Company.

The 1950 Pension Plan provided for two classes of benefits: payments for former employees reaching 65 years of age and having 15 years of experience, and for incapacitated former employees having 15 years of experience.

A collective bargaining agreement signed in 1957 created the "deferred vested pension," which is at issue in this suit. The following provision for deferred vested pensions was carried forward without change in subsequent collective bargaining agreements, appearing as section 18(B)(4)(a) in the 1959, 1961, 1966, and 1969 contracts.

Notwithstanding any other provision of the Pension Plan, any employee who shall be laid off and not recalled within two years, or whose employment shall be terminated as a result of a permanent shutdown of the plant, department or subdivision thereof, and who at the end of two years or the date of his termination shall have reached his fortieth birthday and at such time shall have 15 or more years of continuous service, shall be eligible, upon making application therefor as specified herein, to receive a deferred vested retirement pension.

This pension was "deferred" in that the former employee with 15 years of continuous service would not be eligible for benefits until age 65, even though he might be discharged as early as age 40.

At the time of the 1957 Collective Bargaining Agreement, the 1950 Pension Plan had not been revised to reflect the creation of deferred vested pensions. Through amendments to the Pension Plan in 1962, the Union and the employer corrected this omission. The amended Pension Plan recognized deferred vested pensions, as well as other types of benefits not included in the 1950 Plan. Listing the priority of claims that might be made against the pension fund upon termination of the plan, the 1962 amendments placed the deferred vested pensions fifth. The amendments also incorporated, as section VII(C), a limitation of the employer's liability:

Neither the Trustee nor the Company nor the Pension Board, either as a board or as individuals, in any manner guarantees the Trustee fund from loss or depreciation. All payments of pensions as provided in this Plan shall be made solely out of the Trust Fund, and there shall be no liability on the part of the Company to make further contributions to the Trustee in event of termination of the Plan. Neither the trustee nor the Company nor the Pension Board, ...


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