A group of New York carwash owners has filed a lawsuit against the city, alleging that a law that officials say is meant to protect low-wage workers is illegally favoring unions.þþThe Association of Car Wash Owners, a group that represents about 90 washing operations throughout the city, filed its complaint Friday in Federal District Court in Manhattan. The lawsuit centers on new regulations that require owners of nonunionized carwashes to post a $150,000 surety bond before obtaining a license. Unionized operations would pay $30,000.þþMichael A. Cardozo, the lawyer representing the carwash owners, said the two-tier system was illegal, violating past decisions by the United States Supreme Court that limit local governments’ ability to favor or discourage collective bargaining. By making it less costly for those who have collective bargaining to obtain a license, the city law gave them a competitive advantage, Mr. Cardozo said.þþ“Governments can’t put their thumb on the scales of whether a company should unionize or not unionize,” Mr. Cardozo, a former top lawyer for the city, said. “You’re basically coercing them into entering a collective bargaining agreement.”þþNick Paolucci, a spokesman for the New York City Law Department, said, “We will review the complaint to evaluate the merits of their claims, but believe that the legislation is legally sound and serves to protect hard-working carwash workers.”þþThe law is the first major challenge to City Council’s overhaul of the carwash industry in favor of its low-wage workers, known as the Car Wash Accountability Act. Passed in June after several years of legal wrangling, the law prohibits employers from performing background checks before making a job offer and requires that they put up surety bonds to guarantee payouts if they are found guilty of underpaying employees.þþThe law drew large support from the Retail, Wholesale and Department Store Union and the advocacy organization Make the Road, two groups that have targeted the carwash industry in efforts to expand collective bargaining. But so far, few of New York’s roughly 200 carwash operations have unionized.þþThe law would change the balance on that, according to the complaint. The $150,000 surety bond — an amount paid for by a third-party insurance company that must be personally guaranteed by the carwash owner — would put undue burden on small carwash owners who did not unionize, the owners argued.þþMr. Cardozo gave the example of several small clients that would be unlikely to keep up with the requirement, like one called Zoom Car Spa on Atlantic Avenue in Brooklyn. The nonunion carwash has 16 employees, Mr. Cardozo said, and would soon feel pressure to enter a collective bargaining agreement.þþ“You would have to change your whole operation to avoid the law completely or go out of business,” he said.þþMr. Cardozo said he would be seeking an injunction from the court that would allow owners to not seek the bonds until the matter had been settled.þþRobin Levine, spokeswoman for Melissa Mark-Viverito, speaker of the City Council, who originally sponsored the regulations, defended the law as necessary to protect workers.þþ“Our legislation brings much-needed regulation to an industry that’s fraught with shameful wage theft and labor violations,” she said. “Our law protects both the consumers who patronize carwashes and the vulnerable, low-wage employees who work there.”þþSteve Rotlevi, who heads the carwash association and whose carwash is one of the plaintiffs, called the new laws “pure legislative extortion and special interest politics at its worst.” He added: “What the City Council and mayor did not only hurts our industry, it is an attack on the economy and all small businesses of this city.”þþThe carwash owners also received an unusual ally in Mr. Cardozo, who worked for former Mayor Michael R. Bloomberg as the city’s corporation counsel, the post that defends the city against similar legal challenges to its legislation. Mr. Cardozo said he was allowed to pursue the case because it was not a matter he handled during his tenure.þþ
Source: NY Times
