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The Third Circuit’s Anti-Prejudice Holding in Allied Painting is Unpersuasive, Arbitrator Jaffe Rules.

Brian A. Pepicelli, Esq., bpepicelli@tuckerlaw.com, (412) 594-3953

Neil J. Gregorio, Esq., ngregorio@tuckerlaw.com, (412) 594-3911

On September 2, 2025, Arbitrator Ira F. Jaffe refused to invalidate a 14-year-old withdrawal liability assessment merely because the pension fund did not issue the assessment “as soon as practicable,” as required by 29 U.S.C. §1399(b)(1). Instead, Arbitrator Jaffe evaluated the employer’s timeliness challenge under the doctrine of laches, which requires the employer to establish prejudice from the delay.

The ruling is notable because it declined to follow Allied Painting & Decorating, Inc. v. Int’l Painters & Allied Trades Indus. Pension Fund, 107 F.4th 190 (3d Cir. 2024). In Allied Painting, the Third Circuit held that prejudice is categorically irrelevant in this context.

Arbitrator Jaffe found that Allied Painting is unpersuasive for two overarching reasons:

Allied Painting is “at odds with the reasoning of virtually every other court that has addressed” the same defense; and

Allied Painting conflicts with a separate line of Supreme Court decisions providing that when, as here, “a statute does not specify a consequence for noncompliance with statutory timing provisions, the federal courts will not in the ordinary course impose their own coercive sanction.”

Thus, Arbitrator Jaffe held that to succeed on its timeliness challenge, the employer must establish that it was prejudiced by the pension fund’s delay.

Key Takeaway: Outside the Third Circuit, arbitrators and courts will only follow Allied Painting to the extent that they find it to be persuasive. If they agree with Arbitrator Jaffe that Allied Painting is not persuasive, Allied Painting will not gain any meaningful traction in other jurisdictions.

A copy of Arbitrator Jaffe’s 39-page ruling is publicly available on PACER at Clear Channel Outdoor, LLC v. Int’l Painters & Allied Trades Indus. Pension Fund, 2:25-cv-15153, ECF 1-1 (D.N.J.). It is attached to the employer’s complaint to vacate (which the employer has since voluntarily dismissed without prejudice given that the arbitration proceedings remain ongoing). A copy of the ruling can also be provided upon request.

October 08, 2025

Tucker Arensberg

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The Third Circuit’s Anti-Prejudice Holding in Allied Painting is Unpersuasive, Arbitrator Jaffe Rules.

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