Court Opinion

ID: 8913277
Source: CourtListenerOpinion
Date Created: 2022-11-27 03:55:57.591796+00
Date Added: 2024-06-11T17:08:44.172594
License: Public Domain

ROSENN, Circuit Judge,
dissenting.
I agree with the majority that the question of arbitrability is for the arbitrator and that the disputes are arbitrable. However, I perceive no rational basis for the arbitrator’s award of benefits to employees who were permanently terminated, rather than laid off, more than six months after expiration of the contract from which those benefits are alleged to flow. I therefore dissent from that portion of the majority opinion holding that the arbitration award draws its essence from the collective bargaining agreement and should be enforced.
I.
The Union and Employer entered into a collective bargaining agreement which terminated on June 30, 1977. Article XV of that agreement established a “Security and Severance Plan” which provided for payments to employees separated from employment due to layoffs for lack of work, retirement, permanent and total disability, or death. Article XV provides:
Article XV: Security and Severance Plan Effective July 1, 1974:
FORMULA:
1% of Average Annual Earnings times Years of Service, plus $30.00 times Years of Service. (Annual Earnings: Straight time hourly earnings, which shall exclude all pay premiums of whatever nature, for the twelve consecutive calendar months immediately preceding date of lay-off, retirement, or death, divided by the straight time hours worked, multiplied by 2,080 hours.
ELIGIBLE:
All employees upon completion of Two (2) Years Service. (All “Years Service” shall be based on the Plant’s Seniority Lists). PAYMENTS:
Laid-Off Employees (for lack of work only): After 14 calendar days on layoff, $50.00/week until either:
(a) Employee is recalled.
(b) Exhaustion of his amount accrued by Formula; provided, however, that the first twelve (12) weekly payments (if the employee is laid off that long) shall not be deducted from his amount accrued by Formula nor for those weeks for which the employee received State Unemployment Compensation.
(c) 52 weeks, whichever first occurs.
In the event of (c) and an amount accrued remains, the employee shall have the option of: the remaining amount continuing on accrual; or receiving the remaining amount accrued in a lump sum payment.
Payments shall be made without regard to:
(1) Any other benefit or payment received by the employee.
(2) His employment status except as covered in (a) above.
An employee laid-off, recalled before (b) occurs and subsequently laid off, shall have an accrued amount based on total years of service (figured to nearest complete calendar quarter) less total deducted payments received.
*872Pensioned Employees: At date of retirement under Company’s Retirement Plan, or on the date of his established eligibility for benefits under the Company’s Plan of Permanent and Total Disability Benefits, the employee shall have the amount accrued by Formula less total payment received, if any. Retirement benefits shall reflect only laid-off benefit payments deducted; however, the first twelve (12) weekly payments (if the employee is laid-off that long) shall not be deducted from his amount accrued by the Formula nor for those weeks for which the employee received State Unemployment Compensation.
Death of an Employee: Upon the death of an employee his designated beneficiary shall receive an amount determined by Formula based on the employee’s status at date of death ....
Employees separated for any reason other than lay-off, retirement, permanent and total disability or death shall not receive any payments.
After the plant closed in January 1978, following a six month strike, the Union filed a request with the Company for benefits under this provision on behalf of approximately 94 employees. The request was denied and, after the various proceedings detailed in the majority opinion, the Union won an arbitrator’s award, which was enforced by the district court. At no time did the Union offer any source for the employees’ entitlement to these benefits other than the above-quoted Article XV of the contract. The Company’s position throughout this dispute has been that the employees are not entitled to benefits because: (1) they were not laid, off for lack of work, but instead had been permanently separated from employment due to the closure of the Perth Amboy plant, and (2) even if the employees’ terminations could properly be classified as layoffs for lack of work, no right to security benefits ever arose because those “layoffs” did not occur until more than six months after the contract expired.
The arbitrator found that “the employees were not at work, presumably would not have accepted work even if made available unless a new contract with acceptable terms had been agreed upon and hence may be deemed to have contributed to or shared in some of the responsibility for the plant closing.” Nonetheless, he directed payment of benefits under Article XV because:
(1) Having concluded that the strike and plant closing were both apparently lawful economic actions, he believed it would be improper if either side gained a benefit or suffered prejudice as a result.
(2) He found it significant that, under the terms of the same contract, Federated Metals’ parent, ASARCO, had some months earlier closed a substantial part of its operations at Perth Amboy and had paid the benefits described in Article XV to those employees whose jobs were terminated and who were not retained “for certain continuing operations by Federated.” The arbitrator found “no significant difference” between the plant closing of ASARCO and that of Federated. He concluded that both operations were closed down essentially for economic reasons and that the employees of both had lost their jobs under similar conditions. Thus, he concluded that ASARCO’s application of Article XV to the earlier closing had “precedential effect on the closing of its subsidiary, Federated.”
Citing Ludwig Honold Manufacturing Co. v. Fletcher, 405 F.2d 1123 (3d Cir. 1969), the district court held that it could not say that the arbitrator’s award was in no rational way derived from the agreement. The district court did not address Federated Metals’ contention that the termination of employment due to permanent plant closure does not constitute a layoff for lack of work, the contractual prerequisite to invocation of Article XV. Nonetheless, it granted the plaintiffs’ motion for summary judgment and enforced the arbitrator’s award. It denied the Company’s motion for summary judgment.
II.
If these employees have a right to the benefits awarded by the arbitrator, it is *873undisputed that the right stems from Article XV. The interpretation of the article is for the arbitrator and he brings to the task his informed judgment. However, he is not free to romp wherever his fantasies take him in ascertaining the intentions of the parties. He is “confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice ... [and] his award is legitimate only so long as it draws its essence from the collective bargaining agreement.” United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960). Of course, he may look to other sources for guidance, but unless the arbitrator manifests a fidelity to his obligation, a court must refuse to enforce the award. Id. See Ludwig Honold Manufacturing Co. v. Fletcher, 405 F.2d 1123, 1128 (3d Cir. 1969).
Article XV is a fairly complex contract provision and a failure to analyze carefully its intended manner of operation accounts for what is, in my view, the erroneous decision reached by the arbitrator and approved by the district court. Although it is true, as the majority asserts, that Article XV “does not explicitly segregate security pay from severance pay,” maj. op., supra at 870,1 believe the two types of benefits are sufficiently dissimilar contractual concepts that they must be treated separately under the law. The distinction to be drawn between the two is that severance pay is “earned” during the employee’s length of service and security pay is not. In re Public Ledger, 161 F.2d 762, 773 (3d Cir. 1947).
Under Article XV, “severance pay” consists of a fund, the size of which is determined by use of the contractual formula in Article XV, which grows as an employee accumulates Years of Service. The article provides that an employee may draw upon his severance pay fund in only four situations. In the event of retirement, disability, or death, an employee may receive his severance pay fund in a lump amount. If an employee is laid off due to lack of work, he may draw weekly payments, in $50.00 increments, from his fund for those weeks in which he receives neither security pay, as described below, nor State Unemployment Compensation. No weekly payments may be drawn, however, more than a year after the layoff occurred and, within that year, payments may not be drawn if the employee has been recalled to work.
Security pay, on the other hand, does not vary in amount or availability according to an employee’s length of service. Any and all workers who meet the threshold requirement of two years’ service (also required for severance pay) receive security pay in the event they are laid off due to lack of work. Security pay also takes the form of $50.00 weekly payments, but is made only during the twelve weeks of layoff following the initial waiting period, and in those weeks in which the employee is receiving State Unemployment Compensation.
No one contends that these employees retired, died, or were permanently and totally disabled. Thus, they were not entitled to any benefits under Article XV unless they were laid off for lack of work. The question before us, then, is whether the arbitrator’s conclusion that these employees were laid off for lack of work is a rational application of the terms of the contract.
I first register my strong objection to the arbitrator’s implied acceptance of the Union’s argument that the closing of the plant constituted “lack of work” under the contract resulting in the employees’ loss of jobs. This is mere sophistry, particularly on this record in which it is undisputed that, had the workers ended their strike, the plant had orders to fill and work available.1 *874The arbitrator’s conclusion that the employees should suffer no detriment as a result of their lawful economic action — the strike — is a clear example of an arbitrator “dispensing] his own brand of industrial justice.” United Steelworkers of America v. Enterprise Wheel & Car Corp., supra, 363 U.S. at 597, 80 S.Ct. at 1361. The critical factor in resolving the case before him should have been what the parties intended when they agreed to include Article XV in their collective bargaining agreement. The arbitrator’s decision shows no analysis of the pertinent contractual provisions. He is free to bring his special expertise to bear on the issues, but if his conclusion does not “draw its essence” from the contract, we cannot enforce his award. The Perth Am-boy plant was closed because the Company could not reach an accord with the Union and that is why these employees lost their jobs. I have no hesitation in rejecting as not derived from the contract any conclusion of the arbitrator that interprets “laid off (for lack of work only)” to include permanent terminations of employment resulting from a strike-induced plant closing.
I also disagree with the conclusion of the majority that the arbitrator rationally concluded that these employees were “laid off.” In industrial relations, “layoff” is commonly used to describe a temporary suspension of an employee’s work that leaves the continuing employment relationship unaffected. Fishgold v. Sullivan Drydock and Repair Corp., 328 U.S. 275, 287, 66 S.Ct. 1105, 1112, 90 L.Ed. 1230 (1946).2 As the essence of Article XV discloses, “inherent in the term is the anticipation of recall.” CBS Inc. v. International Photographers of the Motion Picture Industry, Local 644, 603 F.2d 1061, 1063 (2d Cir. 1979). In connection with Michigan’s statutory unemployment compensation program, the Michigan Supreme Court has been called upon to define “layoff” and it too has iterated the essential element of temporary suspension of work or employment, not permanent separation. Thus, in General Motors Corp. v. Erves, 399 Mich. 241, 249 N.W.2d 41 (1976), the court concluded that a layoff “is a temporary dismissal by the employer which anticipates reemployment and therefore is distinguished from unemployment by reason of discharge, resignation, or other permanent termination.” Id. at 46 (emphasis supplied). Accord, Irwin v. Globe-Democrat Publishing Co., 368 S.W.2d 452, 455 (Mo. 1963).
There is a parallel between the case at bar and Irwin v. Globe-Democrat Publishing Co., supra. In Irwin, seventeen employees were awarded “dismissal pay” pursuant to a collective bargaining agreement between their union and the employer. During a strike by the St. Louis Newspaper Guild at its plant, the newspaper employer, the Globe-Democrat Publishing Co., sold all of its physical facilities to the St. Louis Post Dispatch and agreed to operate the plant for the latter upon the conclusion of the strike. Upon the termination of the strike plaintiffs offered to return to work but were advised that they were no longer employed by the Globe-Democrat. The plaintiffs contended they were entitled to “dismissal pay” under the collective bargaining agreement because there had been a layoff to reduce the work force. Like the Union in the case at bar, the plaintiffs in Irwin argued that the reduction in work force was necessitated by the newspaper’s sale of “the tools ‘necessary to’ ... ‘the printing of its newspaper.’ ” 368 S.W.2d at 454. The trial court agreed with this assessment.
On appeal, the Missouri Supreme Court observed that the term “layoff” had a well-defined meaning in the field of employment, that it did not mean termination of employment, but rather meant suspension of work or employment during a part or *875season of the year. It therefore held that an employee “laid off” did not have his employment status completely and finally terminated, that the termination of plaintiffs’ employment was permanent and that therefore plaintiffs had been discharged. Accordingly, the court reversed the award of “dismissal pay.”
Article XV itself clearly demonstrates that “layoff” was there used in the sense of a temporary separation from work. First, of course, the relevant provision of the Article anticipates a continuing relationship between the laid-off employee and the Company. Payments may be stretched out over the course of a year. Further, at the end of that year, the employee may leave funds “on accrual” with the Company, presumably to be later used in case of subsequent layoffs, or as severance pay should one of the three enumerated events come to pass. The provision also directs that payments should cease if the employee is recalled. Finally, even if the contractual language were to authorize a lump sum payment on permanent termination, the amount due the former employee under the “layoff” provision cannot be calculated until one year has passed. There is no way of knowing, at the time of separation, for how many of the coming weeks the employee will receive State Unemployment Compensation.3 Yet for each of these weeks, a “laid off” employee is entitled to $50.00 without having it set off against the formula amount.
What the arbitrator had before him was a total and permanent severance of employment, squarely within the ambit of the contractual prohibition that employees separated “for any reason other than layoff, retirement, permanent and total disability or death shall not receive any payment.” However, rather than analyze the contract to discover its intent, the arbitrator focused on the actions of ASARCO, Federated Metal’s parent company, when it closed a portion of the Perth Amboy works earlier in 1977. He considered “significant” the fact that “under the same contract and identical contract provision,” ASARCO made “security and severance payments” to those employees whose jobs ended and who were not retained in employment for certain continuing operations. Besides the obvious difference that the ASARCO contract was in force during the earlier closing of operations, which I shall discuss later, the arbitrator’s reliance on the parent company’s earlier action was improper. Although there was some evidence that the partial closure resulted from outmoded equipment and inadequate physical facilities, there is no indication that the affected employees were not actually placed on layoff status, subject to recall for the “continuing operations.” Nor is there any indication in the record that whatever benefits were distributed by ASARCO flowed from Article XV. As I have shown, the layoff benefit provision of the Article does not provide for lump sum payments or, in fact, any payments until at least two weeks have passed. If immediate lump sum payments were made, it was in patent disregard of the contract. It may well be that any benefits made available flowed less from the contract than from other considerations not apparent on this record. A holding that once an employer, regardless of the reasons, gratuitously grants benefits not provided for by contract, he may not thereafter deny other workers those benefits, may reward some employees at the moment, but in the long run may seriously damage their cause.
III.
Perhaps even more disturbing than the arbitrator’s conclusion that these employees were laid off for lack of work is his total lack of attention to the expiration of the collective bargaining agreement more than six months before the right to benefits allegedly accrued. Although the majority addresses this issue with the questionable statement that “whether the parties intend*876ed to allow the accrual of benefits after termination is a matter of contract interpretation, which in this case was to be decided by the arbitrator,” maj. op., supra at 870, I find it difficult to accept a conclusion that the arbitrator engaged in any contract interpretation to reach his result. Contract interpretation entails an analysis of language and a consideration of the circumstances under which an agreement was negotiated. Neither the arbitrator’s award nor his questions to counsel at the arbitration hearing indicate any recognition of the expiration issue. Although he rightly concluded, after proper analysis, that the duty to arbitrate survived, his award gives no indication that he engaged in similar analysis of the survivability of Article XV. The two issues are distinct and are controlled by different principles. Nolde Brothers, Inc. v. Local No. 358, Bakery & Confectionery Workers Union, 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977), created a presumption of survivability for arbitration clauses because such a rule significantly advances an important federal labor policy. See Steelworkers Trilogy, 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960). No such presumption applies to Article XV. Whether the substantive provisions of that Article survived contract termination depends solely upon the parties’ intentions and whether they are expressed in the contract. Had the arbitrator considered the issue of survivability in the context of the benefits provisions, as he did in connection with the issue of arbitrability, he would have found nothing whatsoever in the terms of the contract that showed the parties intended continuation of security pay after the termination of the contract.
The majority states that “whether the parties intended to allow the accrual of benefits after [contract] termination is a matter of contract interpretation, which in this case was to be decided by the arbitrator, and such accrual, in our view, is not foreclosed as a matter of law. See, e. g., Federated Metals Corp. v. United Steelworkers, 648 F.2d 856 (3d Cir. 1981) and cases cited therein.” Maj. op., supra at 870 (emphasis added). I am unable to agree that this is an accurate statement of the law or that the cases relied upon support it. According to Webster’s Third New International Dictionary, at 13 (1966), the primary definition of “accrue” is “to come into existence as an enforceable claim: vest as a right... . ” Thus, the majority would permit an expired contract to confer wholly new rights on parties long after the relationship created by the contract has been extinguished. I know no principle of contract law that supports such a result.
As I note in my concurrence in Federated Metals, the companion case on which the majority relies, the language to which this majority refers is dictum, because the court was not called upon to review the merits of the underlying pension and disability claims. Further, neither United Steelworkers of America v. Fort Pitt Steel Casting, 598 F.2d 1273 (3d Cir. 1979), nor Local No. 595, International Association of Machinists v. Howe Sound Co., 350 F.2d 508 (3d Cir. 1965), lend credence to the majority’s conclusion that rights may be accrued under an expired contract. In Fort Pitt, the company expressly obligated itself in the collective bargaining agreement to continue the employee’s health insurance coverage after contract termination. 598 F.2d at 1276. The case actually dealt with a specific continuing obligation which, by its own express terms, survived expiration of the underlying contract. The parties presently before the court were aware of this alternative. In Article X, section 10(f) they made a similar provision for continued health insurance coverage in the event of a strike. No such provision was made for security benefits.
In Howe Sound, notwithstanding the court’s inappropriate use of the term “accrue,” 350 F.2d at 511, it is clear from reading the case that the rights to holiday and pro-rata vacation pay “accrued” during the term of the contract. The holiday pay was sought for Thanksgiving Day, November 22, 1962. The claimants were employees who had been terminated when the contract expired on October 30,1962. They were entitled to holiday pay, however, be*877cause the contract provided that “[h]oliday pay shall be paid to employees .. . when such employee has worked within thirty (30) days of any such Holiday.” 350 F.2d at 510 n.l. Thus, the workers’ rights to holiday pay accrued under the contract on October 23, 1962 — during the life of the contract — even though the benefit was to be enjoyed after contract termination. Such a contractual arrangement is common and in accord with the law. See John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 555, 84 S.Ct. 909, 917, 11 L.Ed.2d 898 (1964).
In the district court the Company contended, as it does before this court, that security benefits are claimed on the assumption that there was a layoff in 1978 when the plant was closed and the employees were separated. At that time, the Company contends, the collective bargaining agreement was no longer in effect and there could be no entitlement under it to security pay. The district court found no merit in this contention on the ground, citing Local 7-644, Oil, Chemical and Atomic Workers International Union v. Mobil Oil Co., 350 F.2d 708 (7th Cir. 1965), cert. denied, 382 U.S. 986, 86 S.Ct. 563, 15 L.Ed.2d 474 (1966), that a termination of the employer-employee relationship does not “vitiate the continued service of an employee.”
The district court may be correct as an abstract matter of law, but the principle has no application to the facts of this case. The issue here is not whether an employee, who returns to work following an absence because of a strike, has suffered a break in service which adversely affects his seniority rights or accrued pension benefits. The question here is whether the opportunity to “earn” rights to benefits while on layoff, as distinguished from the right to enjoy benefits already earned and vested, survives contract termination. Inasmuch as that opportunity was purely a creation of the collective bargaining contract, it is extinguished when that contract ceases to be operative. On June 30, 1977, the collective bargaining agreement between these parties had conferred all the rights it was going to confer, imposed all the obligations it was going to impose. Thus, as we observed in Sun Oil Co. v. NLRB, 576 F.2d 553, 558 (3d Cir. 1978):
Except in limited circumstances not applicable here, Nolde Brothers v. Bakery and Confectionery Workers Union, 430 U.S. 243 [97 S.Ct. 1067, 51 L.Ed.2d 300] (1977), an employer is not bound by the terms of a collective bargaining agreement once that agreement has terminated.
The issues in this case bear a remarkable similarity to those in Owens v. Press Publishing Co., 20 N.J. 537, 120 A.2d 442 (1956). In Owens, the collective bargaining agreement established a right to severance pay when employees left the company for any reason other than gross misconduct. The amount of severance pay equalled one week’s pay per six months of service. The collective bargaining agreement, containing the severance pay clause, expired by its terms on August 22,1952. The claimants in the case were former company employees who had been separated from their jobs, for reasons other than gross misconduct, in the months of January, February and May of 1953. The claimants sought severance pay in an amount calculated using their entire length of service, including those months after the contract had expired.
The New Jersey Supreme Court held the former employees entitled to severance pay in amounts corresponding to their length of service as of August 22, 1952, when the collective bargaining agreement expired. In so holding, the court rejected the company’s argument that the pay was not due unless the separations came during the life of the agreement:
[T]he right to such pay can “arise” only during the subsistence of the contract so providing, and not after its termination; but once the right thus comes into being it will survive the termination of the agreement.
120 A.2d at 448. The court, however, also rejected the former workers’ claims that they had earned severance benefits after August 22, 1952. The court noted that
*878the right to separation pay was a creature of the collective bargaining agreement alone, a consensual undertaking limited to a fixed term; and it is fundamental in the law of contracts that upon the expiration of the period thus prescribed the agreement ceased to exist and its provisions had no in futuro force and effect.
Id. In the two quoted passages, the New Jersey court was announcing basic principles of law. Although Owens was not a review of an arbitration award, the principles of law set out above are of concern to us in determining whether the award presently before this court “drew its essence from the collective bargaining agreement.” See Ludwig Honold Manufacturing Co. v. Fletcher, 405 F.2d 1123, 1128 (3d Cir. 1969). See also International Union of United Brewery, Flour, Cereal, Soft Drink, and Distillery Workers of America v. Duke and Company, Inc., 373 F.Supp. 778 (W.D.Pa.), aff’d, 510 F.2d 969 (3d Cir. 1975) (rights and duties of parties arising out of employment relationship are strictly controlled by the terms of a collective bargaining agreement and duty to continue pension plan does not survive plant’s closing); Baker v. Fleet Maintenance Inc., 409 F.2d 551, 554 (7th Cir. 1969) (when collective bargaining agreement has expired by its terms, it will not support claims for post-expiration wrongful discharge).4
In the case at bar, each employee, as he accumulated years of service, accrued a right under Article XV to receive severance pay if he retired, became disabled, or died. This also entitled him to have those same funds distributed in weekly payments in the event of layoff. The right to that benefit could accrue only during the contract’s life and the right so accrued was limited. Article XV expressly conditioned its exercise on the occurrence of layoff, death, disability, or retirement. As pointed out in part II supra, I do not believe that any of these events occurred and, thus, the condition precedent to these employees’ exercise of their accrued rights has not been met.
Even assuming, however, that these employees could be considered to have been “laid off,” and thus entitled to exercise their accrued rights to severance pay, they were not entitled to an award of security pay. Article XV provides no mechanism by which an employee can accrue rights to security benefits. Thus, security benefits are no more than an expectancy under the contract and may be exercised as a right only at the time when the employee is laid off for lack of work. The events, therefore, that give rise to the right to security pay under Article XV must occur during the life of the contract. This requirement has not been ntet.
IV.
For the foregoing reasons, I conclude that the arbitrator’s award does not draw its essence from the collective bargaining agreement. I further conclude that these employees were not laid off for lack of work and are therefore not entitled to the benefits awarded by the arbitrator. Alternatively, I conclude that even if they were laid off, the employees had no accrued or vested right to security pay. Thus, the award should not be enforced.

. At the arbitration hearing the following exchange took place between counsel for the parties:
MR. RYAN (Company counsel): Would you consider, Emil, that there was sufficient work at the Perth Amboy operation of the Rod and Tube and lead products, assuming
we could have reached a satisfactory collective bargaining agreement?
MR. OXFELD (Union counsel): Sure. I will concede that. Of course. Sure there was work. As I said, in fact, I am sure there has been work at all times in ail the operations. Whether it was economically feasible *874is something we have no concern with because we don’t participate in that judgment.

. The Court in Fishgold quoted with approval the Oxford English Dictionary definition of layoff as “[a] period during which a workman is temporarily dismissed or allowed to leave his work; that part or season of the year during which activity in a particular business or game is partly or completely suspended; an off-season.” 328 U.S. at 287 n.ll, 66 S.Ct. at 1112 n.ll.

. In recent years, Supplemental Unemployment Benefit (SUB) plans have become popular in the automobile and steel industries. They provide employer-financed benefits to supplement state unemployment insurance benefits and Article XV is a variation of a SUB plan. See BNA LRX 916.

. These same principles led courts initially to reject claims that a duty to arbitrate disputes survived contract expiration. See, e. g., Proctor & Gamble Ind. Union v. Proctor & Gamble Mfg. Co., 312 F.2d 181 (2d Cir. 1962), cert. denied, 374 U.S. 830, 83 S.Ct. 1872, 10 L.Ed.2d 1053 (1963). The Supreme Court has, of course, since identified an important federal labor policy that operates to create a presumption that the parties intended arbitration clauses to survive contract termination. Nolde Bros., Inc. v. Local 358, Bakery & Confectionery Workers Union, 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977).
The Union relies on Nolde in support of its claim that security pay survives contract termination. As pointed out in the text, Nolde relied heavily on the strong federal policy in favor of arbitration in extending the life of the contract clause at issue in that case. No such federal policy operates to presume the survivability of security pay clauses. Nolde is relevant only to the preliminary question of arbitrability, an issue on which we have unanimously found in favor of the Union.