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Federal Court Washes Away New York City’s Pro-Union Ordinance

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.”

Jackson Lewis P.C. © 2017

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Thomas M. Lucas, Jackson Lewis, complex labor litigation lawyer, disability management attorney
Office Managing Principal

Thomas M. Lucas is Office Managing Principal of the Norfolk, Virginia, office of Jackson Lewis P.C.

Mr. Lucas represents management exclusively in the full range of employment and labor law matters, including employment discrimination litigation and traditional labor law. He has represented corporate clients, including clients in the maritime, ship repair, manufacturing, healthcare and service industries, throughout the Mid-Atlantic Region and nationally for more than 30 years. Prior to entering private practice, Mr. Lucas...

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Ramsay C. McCullough, Jackson Lewis, Affirmative Action Counseling Lawyer, Employment Discrimination Attorney
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Ramsay C. McCullough is an Associate in the Norfolk, Virginia, office of Jackson Lewis P.C. His labor and employment counseling and litigation practice includes wage and hour laws, employment discrimination laws, the National Labor Relations Act, affirmative action and OFCCP counseling, white collar defense, False Claims Act and Qui Tam/Whistleblower defense, internal investigations, corporate governance and compliance issues, regulatory training, and asset recovery.

Mr. McCullough is an experienced trial attorney. He previously served as an Assistant United States Attorney in the Western District of Louisiana. During his tenure at the Department of Justice, Mr. McCullough served as the lead attorney for the Financial Litigation Unit, a member of the Financial Investigations Review Team, and an Asset Forfeiture & Money Laundering attorney. His duties included managing investigations and litigation involving employment discrimination, regulatory fraud, health care fraud, money laundering, and asset collection. In 2011, Mr. McCullough received the Health and Human Services’ Inspector General’s Integrity Award for his efforts in collecting over $300,000 in Medicare overpayments from over 20 twenty hospitals in Louisiana.

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Howard Bloom, Jackson Lewis, labor union attorney, unfair practice investigations lawyer, employment legal counsel, bargaining law
Principal

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...

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Philip B. Rosen, Jackson Lewis, Preventive Practices Lawyer, Collective Bargaining Attorney
Principal

Philip B. Rosen is a Principal in the New York City, New York, office of Jackson Lewis P.C. He is a member of the firm's Board of Directors and co-leads the firm's Labor and Preventive Practices 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-...

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