Auto Spa Express, a car wash on L.A.’s Sunset Boulevard, ran into business trouble when it failed to pay its employees or its mortgage. The mortgage holder foreclosed, took possession of the property and leased it to a new company.
Thus was born Sunset Car Wash, which had no idea it was about to be cleaned out. A court has ruled it must pay back wages and penalties owed to Auto Spa’s former employees.
The California Office of the Attorney General sued Sunset Car Wash, citing a quirk in the state labor code, which states that “any employer that is engaged in car washing and polishing” is a “successor in interest” liable for the unpaid wages of the previous employer. Sunset argued that it had no knowledge of any unpaid wages. The court was not persuaded and ruled it liable for the back wages.