Kost to settle class-action regarding overtime

SCRANTON – Kost Tire and Muffler has agreed to settle a class-action lawsuit filed by a former employee who alleged the company improperly calculated overtime payments that were due him and hundreds of other workers.

Brandon Malec of Larksville filed suit in May, alleging Kost calculated overtime pay based on an employee’s hourly rate without figuring into that calculation the commissions they earned for sales. He also alleged he was required to work through unpaid lunch breaks. Malec alleged both acts violated the Fair Labor Standards Act.

The proposed settlement, a copy of which was filed in federal court on Wednesday, calls for Malec to receive $2,500 to compensate him for bringing the case forward. Other employees, who are still being identified, will be eligible for a one-time payment that will be calculated by a company named by both parties to be the settlement administrator.

The settlement impacts persons who worked at Kost locations between July 1, 2005, and Aug. 30, 2007, who were paid overtime under the calculation method in dispute or who worked through unpaid lunch breaks.

All persons who may be entitled to payment will be contacted via mail by the settlement administrator, who will determine their eligibility and the amount of payment on a case-by-case basis.

The settlement states Kost continues to dispute the allegations and does not admit any liability. It says the company has agreed to settle the case because it believes the agreement is fair and reasonable and will avoid prolonged litigation.

The proposal was submitted by Malec’s attorney, Peter Winebrake of Dresher, and attorneys for Kost. It must approved by a federal judge before it takes effect.