FORT WORTH -- Two employees and a retiree of Fort Worth-based Acme Brick Co., including the company's chief financial officer, have sued the company and its parent, Berkshire Hathaway, alleging the company improperly reduced the company match on its 401(k) retirement plans and froze its pension plan.

The class action suit, filed Aug. 15 in U.S. District Court in Fort Worth, says Berkshire Hathaway, run by multi-billionaire Warren Buffett, broke a pledge it made when it acquired Acme with Justin Industries in 2000 not to reduce benefits in the company's retirement plans.

"Since that time, the employees have stuck with the company through good times and bad, in anticipation that their benefits under the Retirement Plans would ultimately compensate them fairly," the lawsuit says. "Now, almost 14 years later, Berkshire Hathaway has broken its promise."

Acme Brick's senior management on July 15 voted to make changes to the retirement plans urged by Buffett, Berkshire's chief executive officer, and Marc Hamburg, its chief financial officer. Otherwise "Berkshire Hathaway intended to divest itself of Acme as a subsidiary," the lawsuit says.

The 401(k) retirement plan has not been matched since 2010 at the agreed 50 percent level, but instead the company has matched employee contributions at a rate of 25 percent, the lawsuit says. At the time of the merger, the company's pension plan was over-funded by $60 million, the lawsuit says.

The lawsuit alleges that the changes to Acme's retirement plans violate the federal Employee Retirement Income Security Act, commonly known as ERISA. The lawsuit also asks for damages from Berkshire Hathaway for breaking its promise not to cause a reduction in benefits.

Acme has about 2,242 employees, of which 1,558 are in the pension plan and 1,010 in the 401(k), according to the lawsuit. Acme manufactures and sells brick and distributes other building products in 14 states, primarily in the south and southeastern United States.

Reached by telephone, Hamburg declined to comment on the suit, but issued the following statement: "The plaintiffs contend that the acquisition agreement by which Berkshire Hathaway acquired Acme 14 years ago required Acme to permit participants to accrue additional defined benefits forever, at the same rate that benefits were being accrued at the time of the acquisition, and to make additional 401(k) matches forever, at the same rate as the matches at the time of the acquisition. Acme strongly believes this interpretation of the acquisition agreements is clearly wrong and expects that its actions will be upheld by the courts."

Christopher Graver, an Arizona lawyer representing the plaintiffs, declined to comment on the lawsuit. But in a statement, he said: "Berkshire Hathaway made when it acquired Justin Industries."

The named plaintiffs are Judy Hunter, Acme's chief financial officer and a member of the committees that administer the retirement plans; Anita Gray, assistant controller at Acme; and Bobby Lynn Allen, a retired employee.

The move by Berkshire mirrors a trend in corporate America away from traditional defined benefit pension plans to defined contribution 401(k) plans. But Berkshire is a highly profitable company run by one of the world's richest men. In the second quarter, Berkshire reported a record profit of $6.4 billion, and Forbes magazine this year estimated Buffett's net worth at $67.4 billion.

Acme was founded in 1884 in Parker County and moved to Fort Worth in 1911. In 1902, one of its first big jobs was providing the brick for the Swift and Armour meat packing plants in the Fort Worth Stockyards, according to its website. It was acquired by Justin in 1968.

In 2007, it moved its headquarters from West Seventh Street to southwest Fort Worth. In 2007 and 2008, the company was forced to close some plants in the wake of the nationwide housing collapse, but production has since picked back up.

Under the retirement plans, Acme matched a percentage of an employee's contributions on an annual basis, up to 5 percent of the employee's salary. At the time of the merger, Acme's match was 50 percent. But beginning in 2006, Berkshire Hathaway began proposing reductions in its obligations to the retirement plans, including a "hard freeze" that would eliminate future accruals of benefits for pension plan participants and preclude future employees from participating, the lawsuit says.

The retirement plan committees fought the attempt to reduce the benefits and didn't hear anymore until 2012, when Acme "discovered" that its officers "mistakenly reduced" the 401(k) plan match to 25 percent in 2010 and 2011. Hamburg directed Acme not to return the match for 2012 and 2013, the lawsuit says.

The lawsuit does not quantify the amount of money employees have lost by not receiving the full match.

The lawsuit asks the court to declare that Berkshire Hathaway's promise.

The plaintiffs are asking the court to order Berkshire Hathaway to pay unspecified damages.

In March 2013, the company adopted a "soft freeze" whereby new employees could not participate in the pension plan. In January, Berkshire Hathaway again contacted Acme about reducing or eliminating benefits in the retirement plans, despite being told by lawyers that it would violating terms of the retirement plans.

The local retirement committees gave Berkshire Hathaway until June 27 to provide explanation why payments were not being made, according to the lawsuit.

Acme CEO Dennis Knautz met with Buffett and Hamburg in Omaha on June 25 for 90 minutes, during which he was given two ultimatums about how the plans should be changed, "that were not negotiable," the lawsuit says. Knautz could not be reached Friday for comment on the suit.

On Aug. 11, senior management agreed to one of those choices as an amendment to the pension plan: to the immediate "hard freeze" of the pension plan and to reinstate the 50 percent match for 2014, but that can be modified anytime after this year, the lawsuit said. Employees were notified of the changes a few days later.

In Fort Worth, Berkshire Hathaway also owns BNSF Railway, Justin Brands and TTI. Its stock, (ticker: BRK.A and BRK.B) are traded on the New York Stock Exchange.

Sandra Baker, 817-390-7727 Twitter: @SandraBakerFWST

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