A New York City ordinance requiring car wash companies to post a higher surety bond if they do not sign a union bargaining agreement covering their employees is invalid because it unlawfully favors unionization, and therefore runs afoul of the National Labor Relations Act, a federal district court judge has ruled on May 26, 2017. Association of Car Wash Owners v. City of New York, No. 15 Civ. 8157.  The ordinance was signed by Mayor Bill de Blasio on June 29, 2015, and the lawsuit was filed in 2015 by the Association of Car Wash Owners representing 100 car washes within the City.

The Car Wash Accountability Law, also known as Local Law 62, required all car wash companies doing business in New York City to post a $150,000 surety bond in favor of employees. However, if a car wash signed a collective bargaining agreement or agreed to monthly audits of its pay practices by a third party, the bond would be reduced drastically to just $30,000! The bond was intended to cover possible employee wage complaints, customer complaints, or penalties imposed by the City.

Overturning the pro-union statute, the judge held the ordinance violated federal labor law by imposing a penalty on businesses that do not agree to enter into collective bargaining agreements with unions. Judge Hellerstein pointed out that some City Council members’ statements in support of the ordinance provided evidence against the City, since “the legislative history makes clear that a central purpose of Local Law 62 is to encourage unionization in the car wash industry.”

The court held that the local statute was preempted by the NLRA because “states may not legislate in opposition to a federal law.” The court held that the ordinance had the effect of “pressuring businesses to unionize, [which] is impermissible under the NLRA, as it inserts the City directly into labor-management bargaining.”

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Photo of Howard M. Bloom Howard M. Bloom

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues.

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues. He trains and advises executives, managers and supervisors on union awareness and positive employee relations, and assists employers in connection with union card-signing efforts, traditional union representation and corporate campaigns, and union decertification campaigns. He also represents clients at the National Labor Relations Board in connection with bargaining unit issues, objections and challenges, as well as unfair labor practice investigations and trials. Mr. Bloom also has been the spokesperson at countless first and successor contract collective bargaining negotiations, and regularly advises on collective bargaining agreement administration issues, including grievance/arbitration issues.

Mr. Bloom has appeared before the Massachusetts Supreme Judicial Court, the U.S. Court of Appeals for the District of Columbia, several U.S. District Courts, the National Labor Relations Board, the Massachusetts Labor Relations Commission, the Equal Employment Opportunity Commission and the Massachusetts Commission Against Discrimination.

Mr. Bloom speaks frequently to employer groups on a wide range of labor and employment law topics. He also has written extensively on labor and employment law for a variety of publications, including New England Business magazine, The Boston Globe and the Boston Business Journal. He also is editor of and a frequent contributor to the Jackson Lewis Labor & Collective Bargaining Blog.

While attending law school, he was the Executive Editor of The Advocate: the Suffolk University Law School Journal and President of the Student Bar Association.

Mr. Bloom is a diehard baseball fan. His first book, The Baseball Uncyclopedia: A Highly Opinionated Myth-Busting Guide to the Great American Game, was published in February 2006.

Photo of Philip B. Rosen Philip B. Rosen

Philip B. Rosen is a Principal in the New York City office of Jackson Lewis P.C. and a member of the Firm’s Management Committee. Mr. Rosen also leads the firm’s Labor Practice Group. He joined the Firm in 1979 and served as Managing…

Philip B. Rosen is a Principal in the New York City office of Jackson Lewis P.C. and a member of the Firm’s Management Committee. Mr. Rosen also leads the firm’s Labor Practice Group. He joined the Firm in 1979 and served as Managing Partner of the New York City office from 1989 to 2009.

Mr. Rosen lectures extensively, conducts management training, and advises clients with respect to legislative and regulatory initiatives, corporate strategies, business ethics, social media, reorganizations and reductions-in-force, purchase/sale transactions, sexual harassment and other workplace conduct rules, compliance with the Americans With Disabilities Act, wrongful discharge and other workplace litigation, corporate campaigns and union organizing matters, collective bargaining, arbitration and National Labor Relations Board proceedings. He has been quoted by the press on many labor matters, including the National Labor Relations Board’s recent initiatives on protected concerted activity and the proposed Notice Posting requirements.