Brooklyn, NY - January 25, 2017 - Attorney General Eric T. Schneiderman today announced a lawsuit against Brooklyn-based Tropical Breeze Car Wash for allegedly cheating over 150 minimum wage car wash workers out of more than $540,000 in wages and benefits. The Attorney General is seeking nearly $1.6 million in restitution, damages, and penalties.
The lawsuit was filed today in New York Supreme Court, Kings County against U.S. Auto Wash, L.L.C. d/b/a Tropical Breeze Car Wash (“Tropical Breeze”); its owner, Benno Gmuer; and its managers, Philip Gmuer and Gregory Gmuer. As the Attorney General’s complaint alleges, the company cheated over 150 car wash workers out of over $500,000 in wages and over $30,000 in benefits, and failed to pay its fair share of unemployment insurance and workers’ compensation contributions.
“Every worker deserves an honest day’s pay for an honest day’s work,” said Attorney General Schneiderman. “Yet we allege that Tropical Breeze Car Wash shamefully stiffed workers at every turn. We’re taking them to court and seeking to recover every penny of unpaid wages for these workers, plus damages and penalties for the company’s egregious conduct. Unscrupulous employers should hear our message loud and clear: if you exploit workers, we will see you in court – and make sure that you pay every worker every dollar they’re owed.”
“We are here today because of the abuses and the lack of respect that we experience. We have come together to stop this abuse not just in this car wash but in car washes across New York, and I thank Attorney General Schneiderman for bringing this important case,” said Gerardo Gomez, a worker at Tropical Breeze Car Wash.
This lawsuit is the latest case in the Attorney General’s ongoing effort to clean up the car wash industry in New York. To date, Attorney General Schneiderman has recovered more than $2.5 million for more than 1,000 workers at 26 separate car wash locations in New York. In total, Attorney General Schneiderman has won back more than $30 million in stolen wages for over 21,000 workers across New York since 2011.
“There is an epidemic of wage theft in the car wash industry, and today's action by Attorney General Eric Schneiderman shows exactly why we need strong enforcement to protect workers. The $1.6 million in restitution for lost wages and benefits and damages and penalties that the AG seeks in this case will help these workers and shine a light on bad practices. Wage theft is pervasive in the industry. Hard working carwasheros deserve to be paid a fair and legal wage – and that includes eliminating the tip credit, which encourages wage theft while allowing businesses to pay their workers a sub-minimum wage,” said Stuart Appelbaum, President, Retail, Wholesale and Department Store Union (RWDSU).
“At a time when exploitative employers are feeling increasingly emboldened by Trump’s hateful rhetoric, it is imperative that our State is taking a strong stance in defense of immigrant workers. Wage theft is a persistent and pervasive problem in New York, particularly in the car wash industry, with low-road employers cheating their immigrant workers out of millions of dollars in lawful wages and benefits each year. We commend the Attorney General for fighting to recuperate wages for the workers at Tropical Breeze Car Wash and for making clear to unscrupulous employers that their behavior will not be tolerated in New York,” said Deborah Axt, Co-Executive Director, Make the Road New York (MRNY).
An investigation conducted by the Attorney General’s office revealed that at least as early as January 1, 2012 and through at least January 1, 2018, Tropical Breeze allegedly routinely underpaid employees for hours they worked, including overtime hours, time spent waiting on-site for the car wash to open, and time deliberately cut from employees’ time cards. As alleged in the complaint, Tropical Breeze did not pay employees for an additional hour at minimum wage when the employees’ workdays exceeded 10 hours, in accordance with the spread-of-hours requirement. Tropical Breeze also allegedly failed to pay employees for at least four hours of work when employees reported to work but were sent home early, known as “call-in pay.” Additionally, Tropical Breeze denied workers reimbursement for mandatory uniforms and failed to provide employees with earned sick leave.
In addition to underpaying workers, the Attorney General’s lawsuit alleges that Tropical Breeze maintained misleading and deficient employee records, illegally managing two separate payroll systems: one for “on-the-books” employees, who constituted only about a third of the workforce, and another for “off-the-books” employees, who made up the majority of the staff. Tropical Breeze never provided information to any of its workers about their rate of pay, known as wage notices, and never provided information to its off-the-books employees about their weekly wages and relevant deductions, known as payment statements.
Finally, Tropical Breeze allegedly repeatedly filed documents with New York State that underreported its employee count and payroll expenditures in order to avoid paying full unemployment insurance contributions and workers’ compensation premiums. The Attorney General’s office is requesting the court to order Tropical Breeze to pay any outstanding fees and penalties after submitting corrected information to the State.
In total, the Attorney General’s office is seeking nearly $1.6 million in restitution, damages, and penalties, including six years of unpaid wages and benefits totaling $542,684 for approximately 150 employees; liquidated damages totaling $542,684 under the Labor Law; and over $475,000 in penalties for Tropical Breeze’s failure to distribute wage notices and payment statements as required by law.
During most of the period covered by the Attorney General’s investigation, the applicable minimum wage was between $8.00 and $9.00 per hour. New York’s minimum wage is currently $11.00 per hour in New York City. Overtime laws require employers to pay covered employees one and one half times an employee’s regular rate for hours worked beyond 40 hours in a given week.
The Attorney General’s Office is committed to protecting workers’ legal rights. To file a complaint, please contact the Office’s Labor Bureau at 212-416-8700 or visit www.ag.ny.gov/labor/complaint-form.
This case was handled by Special Counsel Sara Mark, Healthcare Bureau Deputy Bureau Chief Susan Cameron, previously in the Labor Bureau, Assistant Attorney General Ming-Qi Chu, and Volunteer Assistant Attorney General Tavi Unger, under the supervision of Labor Bureau Civil Enforcement Section Chief Mayur Saxena, with the assistance of Director of Research & Analytics Jonathan Werberg, former Director Lacey Keller and Data Scientist Meredith McCarron. The Labor Bureau is led by Bureau Chief ReNika Moore and Deputy Bureau Chief Julie Ulmet. The Executive Deputy Attorney General for Social Justice is Matthew Colangelo.