Recently a NY federal judge ruled that the NYC Carwash law was illegal because it promoted unionization of carwashes.
In 2015, the NYC Council passed a law to regulate car wash businesses. The Council believed the law would protect low wage car wash employees who were being denied proper wages and tips by requiring carwash owners to carry bonds. Shops that had not unionized had to buy a $150,000 bond. Unionized shop owners only needed to purchase a $30,000 bond because workers would have stronger protections through a union.
A group of NYC car wash owners sued the city over the new law and alleged that it illegally favored unionized car washes.
Federal Court Ruling on Unionization and NYC Carwashes
A federal judge of the Federal District Court in Manhattan heard the case and ruled that the NYC law violated federal law because it favored unionization and “impermissibly intrudes on the labor-management bargaining process.” (The New York Times ) The United States Supreme Court had ruled on similar cases to this in the 1970s and 1980s.
The law would have affected the estimated 100 to 200 NYC carwash businesses, of which less than 10 percent are unionized.
Due to the lawsuit, the 2015 law had never gone into effect and awaited the court ruling.
The president of the union representing carwash workers said he would support one level of bond, valued at $150,000 for all carwash owners. These surety bonds ensured that workers would have money available in the event of wage theft.
Are You a Small or Medium-Sized Business Owner Facing Unionization?
If so, get legal advice and ensure you protect your rights. Stephen Hans & Associates is a New York law firm that assists business owners with employment and labor law issues. We have decades of experience helping businesses with unions and unionization issues.