According to the New York Times, a federal judge has ruled that a city law to regulate carwash businesses violates federal law because it encourages unionization.535990119

Car Wash Unionization on Trial

Judge Alvin K. Hellerstein of Federal District Court in Manhattan, found that the city overstepped its bounds by requiring carwash owners to buy a special bond in two-tiered system: $30,000 for those whose workers were unionized or employers who agreed to monitoring, and $150,000 for all others.

The judge stated the law, “explicitly encourages unionization, and therefore impermissibly intrudes on the labor-management bargaining process.” Citing United States Supreme Court in cases dating to the 1970s and ’80s as precedence.

Single tier bond system?

Stuart Appelbaum, the president of the Retail, Wholesale and Department Store Union, said the goal was not to encourage unionization but to prevent “endemic wage theft within the carwash industry.” According to,  “The state’s minimum wage is $7.25 an hour, but 66 percent of the workers reported being paid less than that at times. Only five workers reported that they were paid the difference to make minimum wage if their earnings with tips were less than the legal rate.”

He said the bonds, known as a surety bonds, were to ensure that workers would have money available to them to collect if and when it was found that wages were kept from them.

Mr. Appelbaum said he would be happy with one level of bond — $150,000 for all carwash owners — and said the Law Department should “seek clarification” as to whether the judge’s decision meant that new legislation would be necessary to achieve that.

Judges Ruling

Comments by Ms. Mark-Viverito, and others on the Council during the process of adopting the legislation figured in the decision. Judge Hellerstein wrote that the legislative history demonstrated that the “central purpose” of the law, known as Local Law 62 or the Car Wash Accountability Act, was to illegally promote unionization. Somewhere around 100 to 200 carwashes operate in New York City; fewer than 10 percent are unionized.

A spokesman for the city’s Law Department expressed disappointment with Judge Hellerstein’s decision and said in a statement that it would be “evaluating next steps.” A spokeswoman for the City Council speaker, Melissa Mark-Viverito, issued a nearly identical statement.
Read the entire story here at the New York Times.