The United States District Court for the Eastern District of Texas has permanently blocked a controversial Dallas ordinance that requires employers to provide paid sick leave benefits to certain employees. The permanent injunction went into effect on March 31, 2021.
Dallas becomes the third city in Texas to enact a paid sick leave ordinance, following the adoption of nearly similar laws in Austin and San Antonio. All three required covered private employers to provide certain paid sick leave benefits to employees based on hours worked within city limits. While the Austin and San Antonio laws were ordered before they took effect, legal challenges to the Dallas law were not prosecuted until it took effect on August 1, 2019. This ordinance was in effect for approximately eight months until March 30, 2020.federal court Preliminarily It barred the city from enforcing it during the litigation. Just over a year later, a court issued a decision earlier this week that permanently banned the law and barred the city from enforcing it in the future.
The federal ruling follows similar decisions by Texas state courts that blocked paid sick leave benefit ordinances in Austin and San Antonio from taking effect. The basis for all these decisions is the same. As a federal court held in Dallas, the city overreached by holding that the ordinance violated the Texas Minimum Wage Act and was therefore unconstitutional. Texas law prohibits local governments from requiring private employers to pay employees more than the state's minimum wage and preemptively invalidates ordinances that attempt to do so. Although the Texas Supreme Court has not yet addressed the specific question of whether such ordinances are legal (and, in fact, has refused to rule), the Third and Fourth Courts of Appeals Both had previously ruled those ordinances illegal. The court held that requiring paid sick leave benefits to employees while they are not working due to illness or other reasons is equivalent to requiring those employees to be paid higher “wages.” , and therefore such an ordinance would effectively increase the state's minimum wage for employers. In those jurisdictions. Federal courts followed this reasoning, holding that the Dallas ordinance superseded Texas law and was unenforceable.
The federal court's opinion is also notable for other views on the ordinance's impact on businesses. For example, the court found that if the ordinance had been in effect, the plaintiff's employer would have suffered irreparable harm because it would have been forced to bear certain costs associated with compliance, such as rising labor costs. I concluded that it was okay. Additionally, the court maintains the structure of government under the Texas Constitution by prohibiting local governments from issuing regulations that increase minimum wage requirements, thereby overriding public policy established by the Texas Legislature. It concluded that this was in the best public interest. minimum wage law.
Finally, this decision is significant because it is the first case in Texas to reach a final decision on the merits of this issue. So far, the Austin and San Antonio appeals have only addressed the question of whether the trial court should have issued a preliminary injunction while the case was pending. These appellate decisions do not formally end the case or make a final determination on the legality of the ordinances at issue. In contrast, the Dallas federal court decision ended the controversy by issuing a final judgment in favor of the challengers. The Dallas decision is the first on this point, but it likely foresees the same outcome with respect to the Austin and San Antonio cases.
The main points are clear. Local attempts to create mandatory paid sick leave benefits in the private sector in Texas are a dead end. Mandating these benefits in the Lone Star State would require changes to Texas law.Whether such legislation will be taken up during the current 87 years?th The fate of the Texas Legislature, which began on January 12, 2021, is uncertain.
What should Texas employers do now?
Employers should continue to monitor lawsuits challenging the Austin and San Antonio ordinances in case unforeseen developments cause these ordinances to go into effect. Without such action, his three paid sick leave ordinances in Texas would continue to be prohibited. Employers interested in considering their legal obligations and options for providing such benefits to Texas employees would be wise to regularly check with their employment attorney regarding this issue.
