The fund blamed a backlog. The court wasn't buying it – and employers should take note
A pension fund waited eight years to demand $800,000 from two employers. A federal court just told it that was too long.
In a ruling issued March 3, 2026, the U.S. Court of Appeals for the Third Circuit handed a clear victory to two companies that had been chased for more than $800,000 in pension withdrawal liability – money a union pension fund waited eight years to ask for. The court's message was direct: drag your feet long enough, and you lose the right to collect.
The case centered on the International Painters and Allied Trades Industry Pension Fund, which had sought to hold RTI Restoration Technologies, Inc. and Industrial Maintenance Industries, LLC responsible for the pension withdrawal liability of a now-defunct company called Coating Technologies, Inc. CTI, as it was known, stopped making contributions to the fund when it shut down in 2013. The fund did not send its first payment demand to RTI and IMI until July 2021.
The connection between the companies was a man named Robert Gagliano. He had been an officer at CTI and was also tied to RTI and IMI, which were founded in 2011 and 2013. The fund argued the companies were effectively successors to CTI and should be on the hook for what it owed. RTI and IMI disagreed, saying they had never signed any agreement with the union and had no obligation to the fund.
What made the fund's position especially difficult to defend was the timeline. By 2013 – the same year CTI closed – the IUPAT Health and Welfare Funds had already sued CTI for delinquent contributions, settling that case in 2015. The union was in repeated contact with RTI and IMI between 2015 and 2017. The fund, by its own admission, had identified CTI as inactive on its internal tracking list by 2019. And yet it still waited until 2021 to send a demand. Gagliano, who might have been a key witness in any dispute over the merits, died in 2018 — during the fund's delay.
Under federal law governing multiemployer pension plans, a fund is required to notify an employer and demand payment "as soon as practicable" after the employer withdraws from the plan. The fund argued this was simply a flexible standard and that the companies had waived any right to challenge the timing by not pursuing arbitration. The court disagreed on both counts.
The Third Circuit ruled that the "as soon as practicable" requirement is not a technicality that can be argued around or forgiven with a good enough excuse. It is a mandatory condition that must be met before a pension fund has any legal right to collect in the first place. Because the fund failed to meet it, the court said, its claim never legally came to life – and there was nothing left to arbitrate.
For HR and benefits professionals, particularly those in industries where multiemployer pension plans are common, the ruling carries a practical takeaway. Employers who withdraw from a pension plan – or who are accused of being connected to a company that did – are not without recourse if a fund comes knocking years later. The law imposes real obligations on funds to act promptly, and courts are willing to enforce them.
The decision also reinforces a pattern emerging from the Third Circuit. In 2024, the same court ruled against the same pension fund in a separate case involving a twelve-year delay, establishing that diligence is not optional. This latest ruling makes clear that principle holds even when the delay is somewhat shorter and even when the fund claims its internal backlog was to blame.
For employers managing benefit obligations in unionized workplaces, it is a significant reminder that when it comes to pension liability, the burden to act promptly falls squarely on the fund – not on them.
