Berkshire Hathaway Settlement

This case involves the Acme Brick Company Pension Plan “(“Pension Plan”), which is a defined benefit pension plan, and the Acme Brick Company 401(k) Retirement and Savings Plan (“401(k) Plan”) (collectively the “Plans”).

Plaintiffs Judy Hunter, Anita Gray, and Bobby Lynn Allen filed a complaint on August 15, 2014 (later amended) alleging that Defendant Berkshire Hathaway Inc. (“Berkshire Hathaway” or “Defendant”) violated the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the terms of the Pension Plan and the 401(k) Plan by (a) causing Acme Building Brands, Inc. (“Acme”) to freeze accruals of benefits under the Pension Plan as of October 1, 2014, and (b) causing Acme to reduce the employer’s matching percentage of contributions to the 401(k) Plan between 2010 and 2013.

The District Court initially dismissed the complaint, but in 2016 the Fifth Circuit Court of Appeals reinstated the complaint against Berkshire Hathaway only. After litigating for several more years, the parties participated in a Court-ordered mediation before a nationally-known arbitrator, and reached a compromise with the mediator’s assistance.  Plaintiffs and Defendant signed a Class Action Settlement Agreement (the “Settlement Agreement”) on November 27, 2019. Judge Means granted final approval of the Settlement Agreement on May 13, 2020.

On May 13, 2020, the Settlement was finally approved on behalf of the following two Settlement Classes:

• The Pension Plan Settlement Class, consisting of all participants or former participants in the Acme Brick Company Pension Plan who were employed by Acme on October 4, 2014, together with their beneficiaries.
• The 401(k) Plan Settlement Class, consisting of all participants or former participants in the Acme Brick Company 401(k) Retirement and Savings Plan who contributed to an account with the 401(k) Plan at any time between January 1, 2010 and December 31, 2013, together with their beneficiaries. Excluded from the 401(k) Settlement Class are participants and former participants for whom the employer’s matching contribution between January 1, 2010 and December 31, 2013, was established by a collective bargaining agreement.

The Settlement resolves all claims against Defendant and applies to all members of the two Settlement Classes.

The Settlement extends the freeze date for the Pension Plan from October 4, 2014 to July 15, 2017 (so eligible participants in the Pension Plan will accrue up to an additional two years and ten months’ worth of benefits). The Settlement also provides for Seven Hundred Fifty Thousand Dollars ($750,000) to be paid proportionately to participants in the 401(k) Plan during 2010-2013.

The Named Plaintiffs and Class Counsel believe that this Settlement is in the best interest of the members of the two Settlement Classes.  As a result of the Settlement, the Settlement Classes release claims against Defendant, and certain related parties, that were or could have been brought in the case (these claims are defined in the Settlement Agreement).

The Court held a Fairness Hearing at the U.S. District Court for the Northern District of Texas on May 13, 2020 and considered the fairness of the proposed Settlement.  The Court considered arguments concerning the proposed Settlement’s fairness at that time and entered an order approving the Settlement.

Q: How do I know whether I am part of one of the Settlement Classes?

• You are a member of the Pension Plan Settlement Class if you are a participant or former participant in the Acme Brick Company Pension Plan and were employed by Acme on October 4, 2014, together with your beneficiaries.
• You are a member of the 401(k) Plan Settlement Class if you are a participant or former participant in the Acme Brick Company 401(k) Retirement and Savings Plan who contributed to an account with the 401(k) Plan at any time between January 1, 2010 and December 31, 2013, together with your beneficiaries. Excluded from the 401(k) Settlement Class are participants and former participants for whom the employer’s matching contribution between January 1, 2010 and December 31, 2013, was established by a collective bargaining agreement.
• You may be a member of both of the Settlement Classes.

Q: What does the Settlement provide?

• The Settlement extends the freeze date for the Pension Plan from October 4, 2014 to July 15, 2017 (so eligible participants in the Pension Plan will accrue up to an additional two years and ten months’ worth of benefits). See Section 6.1.2 of the Settlement Agreement for additional details regarding benefits to the Pension Plan Settlement Class.
• The Settlement also provides for Seven Hundred Fifty Thousand Dollars ($750,000) to be paid proportionately to participants in the 401(k) Plan during 2010-2013. See Section 6.1.3 of the Settlement Agreement for additional details regarding benefits to the 401(k) Plan Settlement Class. 

Q: How will the Settlement be distributed?

As of the Effective Date of Settlement, the accrued benefit of each member of the Pension Plan Settlement Class shall be adjusted pursuant to an amendment to the Pension Plan.  The 401(k) Plan Settlement Funds will be allocated using the formula detailed in the Settlement Agreement and allocated to the 401(k) Plan accounts of all 401(k) Settlement Class Members for the years 2010 through 2013.  Any 401(k) Settlement Class Member who no longer has an account in the 401(k) Plan will be contacted by Acme for disbursement instructions.

Q: How will the lawyers be paid?

The fees and expenses of Plaintiffs’ Counsel were approved by the Court and will be paid by Defendants separately from settlement.