News from the Industry
L.A. sues eight carwashes for $6.6 million
Attorney General Edmund G. Brown Jr. has filed a $6.6 million lawsuit against eight carwashes owned by members of the Sikder family after an investigation revealed a “widespread pattern of worker exploitation,” unpaid wages and illegal business practices.
The lawsuit comes after a five-month investigation of the family’s carwashes in Fair Oaks, Folsom, Irvine, Laguna Hills, Laguna Niguel, Santa Monica, San Ramon and Venice.
Investigators interviewed more than 80 workers and found the carwashes routinely denied workers minimum wage and overtime, failed to pay wages owed to those who quit or were terminated, denied rest and meal breaks, and created false records of time worked
The Attorney General said carwashes required employees to report to work hours early and be available, unpaid, “until business picked up.” When workers were paid, many received paychecks that could not be cashed because of insufficient company funds. Additionally, the carwashes operated for years without licenses from the Labor Commissioner, which are required under California law.
The lawsuit seeks $6.6 million to pay back lost wages and civil penalties, and an injunction to prevent the defendants from committing similar violations in the future.
SBA shows increase in loan approval is for 2010
The Small Business Administration has increased the number of loans it approved in 2010 by about 30 percent over 2009’s totals.
The agency’s fiscal year ended Sept. 30 and it had approved nearly 55,000 small business loans, valued at about $16.84 billion. In 2009, the agency backed just over $13 billion, and in 2007, that amount was over $20 billion.
The increase from 2009 to 2010 is owed to last year’s stimulus plan, “which eliminated fees and increased the government’s maximum guarantee to 90 percent, up from 75-85 percent.”
“The stimulus provisions work,” said Tony Wilkinson, president and chief executive of the National Association of Government Guaranteed Lenders, a trade group in Stillwater, OK. Wilkinson said SBA loans are “the main avenue for small-business lending today,” adding that,“a number of borrowers in SBA programs today would have gotten conventional lending years ago.”
The stimulus provisions ended in May, although the Small Business Jobs Act allows the program to continue through the calendar year.
Carwash to pay more than $1.7M in back wages
Broadway Bridge Wash & Lube will pay more than $1.7 million for five years’ worth of underpaid wages. The settlement was conducted by the state Labor Department after an investigation showed the wash failed to pay its workers overtime wages and tips from 2003 to 2008.
Many staff members worked 72 hours a week and earned as little as $3.75 an hour, which was $3 below minimum wage at the time.
Broadway Bridge will also pay $215,000 in penalties to the Labor Department.
NASCAR partners with The Look Company
The NASCAR Car Wash Company (NCW) has entered an agreement with The LOOK Company to design, produce, deliver, install and maintain NCW’s proprietary brand in North America and the U.S. territories.
The NCW was introduced to The LOOK Company, a “global leader” in brand identity for high profile clients and sporting events, by MacNeil Wash Systems, which recently became a preferred provider to the company.
“We are extremely impressed with the professional image they bring to projects at every level, including the Winter Olympic Games in Vancouver, B.C.,” said Dan Dyer, NCW chairman and CEO. “The LOOK Company is clearly a leading-edge company comprised of ‘can do’ people who will be able to do justice to our work with the NASCAR brand, which is one of the most widely recognized and respected brands in the world. The LOOK team’s work to incorporate our sponsor programs will be crucial to NCW as well.”
NCW plans to have its first locations open in early 2011, and announced earlier this month that it had signed an agreement with a Utah operator to build 20-25 express tunnels.
Another bell to ring in North Carolina
Autobell Car Wash, the third largest conveyor carwash chain in the nation, has maintained a steady growth this year and is now celebrating the opening of its 61st location in Asheville, NC.
The full-service carwash is in place of the former Bob & Denise’s Classic Car Wash.
This is the first location in Asheville and the fifth in western North Carolina.
PC&D reported on Sept. 7 that the 60th Autobell location had opened in Charlotte, NC.
The carwash will be managed by David Robinson.
Charity washes here will need a permit
Residents of Toppenish, WA, who want to hold a fundraiser carwash will now have to apply for a permit five days in advance of the event.
The Toppenish City Council unanimously approved the measure, which comes with a $500 fine for those caught in violation, during a meeting on Oct. 11.
The ordinance also requires these charity washes to use biodegradable soap and hold the wash on grassy or permeable surfaces where runoff water can seep into the ground and not the city’s stormwater or sewer systems.
And while charities can apply for a free permit, any person holding a carwash for personal gain must acquire a business license, the ordinance states.
The new ordinance was motivated by police who were concerned for young people who hold charity carwashes at busy intersections, as well as by state efforts to educate the public on the dangers of runoff water from at-home and charity carwash events.
Market research shows c-store sales are up
Anew report from market research company The NPD Group shows that c-store traffic is up by 8 percent and sales by 11 percent in the second quarter of 2010, as compared to last year’s numbers.
NPD’s Convenience Store Monitor also showed gains in the average number of visits made in a 30-day period, which increased from 6.1 in the second quarter of 2009 to 6.4 in 2010.
The report monitors the consumer purchasing behavior of more than 49,000 c-store shoppers in the United States.
“Convenience and the need for grab and go will continue to be motivators for c-store visits, and after sharp visit declines in 2009, because of these continuing needs, we’re seeing visits rebound in 2010,” said David Portalatin, industry analyst for NPD’s c-store research. “Less-volatile gas prices are also helping the channel, although minimal growth in miles driven and competition from grab-and-go offerings from other retail channels still pose a threat to convenience stores.”
DHS cracks down on illegal hiring practices
The Department of Homeland Security is focusing its attention on employers in an effort to enforce immigration policies and collected penalties have risen dramatically as a result, according to a legal update from Gary W. Bethel of Littler Mendelson, a law firm exclusively devoted to representing management in employment, employee benefits, and labor law matters.
The October 2010 update said that DHS Secretary Janet Napolitano has indicated the department will focus on auditing employer’s I-9 documentation because “going after only workers doesn’t get at the source of the problem” of unauthorized immigration.
The legal update said DHS will target employers that knowingly hire undocumented aliens or mistreat workers and it has audited 2,785 employers since the Obama administration took office, levying about $6.4 million in fines.
The number of inspections is expected to continue to increase, and DHS data shows a 28 percent increase in inspections this fiscal year as compared to FY 2009, when only 1,444 inspections were conducted. In FY 2008, the department conducted only 503 inspections, and in FY 2007 that number was 254.
ICA expands WaterSavers criteria
The International Carwash Association (ICA) has expanded the criteria of the WaterSavers’ program in order to allow more carwashes to participate in the industry’s leading environmental recognition program.
WaterSavers already has more than 800 locations enrolled, and now carwashes which recycle water or meet actual water usage levels are able to participate. Further, the criteria for participants now include the use of a backflow protection device as an additional practice for protecting water quality.
WaterSavers was launched in 2009 as a way to promote the environmental benefits of professional carwashing to consumers and water regulators with the message, “professional carwashing has a positive impact on water quality and water efficiency.”
According to the Association, participating WaterSavers locations are also included in an online searchable carwash directory at icawatersavers.org.
“Those within our industry already know the environmental benefits of professional car washing,” said Eric Wulf, CEO of the ICA. “But, too many consumers and water authorities are unaware. Thanks to these new criteria, now more operators can participate in and benefit from our industry’s most successful consumer campaign. The more locations that participate, the greater our ability to raise awareness and influence behavior.”
“Being a WaterSavers member is an easy way to promote my business in the community and shows how we are committed to our environmentally friendly practices,” said John Richard, a WaterSavers member, of Bethel Park Rapid Wash. “These criteria changes are good for the industry as a whole, and will help spread the word on the eco-benefits of professional car-washing.”
The ICA encourages carwash operator members to see if they qualify and register their carwash today.
Shoot-out at carwash leaves 15 dead
Fifteen people, including carwash customers and employees, were shot dead at a carwash in Mexico City, and authorities believe drug gangs are responsible.
The day before the shoot out, three people were killed at another carwash in Guadalajara, Mexico, which is six hours outside Mexico City.
It is unclear as to why the gunmen targeted the carwash, but the story suggested that the carwash workers may have been spying on the drug gangs.
Osiel Cardenas, a convicted and now imprisoned drug lord, used to work at a carwash for local drug bosses.
The drug gangs La Familia, the Zetas and the Sinaloa cartel, are apparently involved in a turf war over land and criminal rackets.
A CNN International story is showed a video of the shooting aftermath. The story said hundreds of shell casings were found at the carwash and businesses and schools were closed as a result.