The New York Times (October 19, 2015) reports that the Association of Car Wash Owners, representing about 90 car washes in New York City, filed a suit against the city in Federal District Court in Manhattan challenging new regulations that require owners of nonunionized car washes to post a $150,000 surety bond before obtaining a license while unionized washes put up only $30,000.

The lawsuit is the first major challenge to the city council’s overhaul of the car wash industry in favor of its low-wage workers, known as the Car Wash Accountability Act. The Times reports that 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.

Michael A. Cardozo, the lawyer representing the car wash owners, characterized the two-tier surety-bond system as illegal and in violation of past decisions by the United States Supreme Court that limit local governments’ ability to favor or discourage collective bargaining. Mr. 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.

According to the newspaper, Steve Rotlevi, president of the association, called the new law “pure legislative extortion and special interest politics at its worst.” He is further quoted as follows: “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.”