Chestnut Petroleum Agrees to $1 Million Labor Settlement

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Chestnut Petroleum Agrees to $1 Million Labor Settlement

NEW YORK -- Chestnut Petroleum Dist. Inc., operator of 37 convenience stores throughout the Hudson Valley, Brooklyn and Long Island, N.Y., and New Jersey and Connecticut, has agreed to pay 767 employees a total of $900,000 in back wages -- plus a $100,000 penalty to the federal government -- to resolve a U.S. Department of Labor lawsuit that alleged violations of the federal Fair Labor Standards Act (FLSA).

An investigation by the department's Wage and Hour Division alleged that, in many workweeks between April 20, 2003 and May 28, 2006, employees at the various locations were paid less than the federal minimum wage and were not properly compensated for overtime hours worked. The investigation also claimed that the employers failed to keep required records that showed, among other things, the hours worked each day, total hours worked each week and rates of pay for many of the employees.

The FLSA requires that covered employees be paid at least the applicable minimum wage as well as one and one-half times their regular rate of pay for hours worked over 40 per week. The law also requires that accurate records of employees' wages, hours and other conditions of employment be maintained, according to the Labor Department.

The Labor Department filed suit against Chestnut Petroleum Dist. Inc. and its various locations in U.S. District Court for the Southern District of New York. Also named as defendants were: Salah "Sal" AlJamal, president of all the corporate defendants; Khalil "Cal" ElJamal, secretary of Chestnut Petroleum; Saleh "Sam" ElJamal, treasurer of Chestnut Petroleum; and Ahmad "Mickey" Jamal, a Chestnut Petroleum employer.

A consent judgment, signed on March 30, prohibits the defendants from committing future FLSA violations. The judgment orders the defendants to pay minimum wage and overtime back wages totaling $850,000 combined, plus interest, to the majority of the workers, and to pay $50,000 combined to two employees who were unlawfully fired. The defendants also must pay a civil money penalty of $100,000 to the Labor Department. The payments are to be made in 24 monthly installments beginning April 1.

Additionally, the court has ordered the defendants to expunge from their employment records all references to the actions taken against the two wrongfully-fired employees and to implement a compliance program designed by the Labor Department to ensure their future compliance with all requirements of the FLSA.

"This administration is committed to ensuring that workers are paid all of the wages they have earned," U.S. Secretary of Labor Elaine L. Chao said in a statement. "The $900,000 settlement in this case will provide workers the back wages they are owed and the $100,000 civil penalty is further incentive to properly compensate workers from now on."

The Wage and Hour Division's Albany district and Hudson Valley area offices conducted this investigation, and the suit was filed by the Labor Department's Regional Solicitor's Office in Manhattan.