Question: Nolde Bros. Bakery's collective bargaining agreement with the Bakery & Confectionery Workers Union, Local 358, provided that any grievance between the parties was subject to binding arbitration. During negotiations over the renewal of the agreement, the union gave notice of its intention to cancel the existing agreement. Negotiations continued for several days past the termination date, and the union threatened to strike. The employer informed the union that it was permanently closing its plant. The employer paid the employees their accrued wages and vacation pay but refused to pay severance pay as called for in the collective agreement.
The employer argued that its duty to pay severance pay and its duty to arbitrate the claim for severance pay expired with the collective agreement. The union sued under Section 301 to force the employer to arbitrate the question of whether the employer was required to pay severance pay. How should the court decide the union's suit? Is the employer required to arbitrate the matter? Explain your answer. See Nolde Bros. v. Bakery & Confectionery Workers Local 358 [430 U.S. 243 (1977)].