Austin Paid Sick Leave Ordinance – Lawsuit Update

Several motions in the lawsuit challenging the Austin Paid Sick Leave Ordinance were heard in Travis County District Court, including the motion for a temporary injunction and Defendants’ motions to dismiss the case.  The court’s June 26, 2018, denial of the temporary injunction seeking to block the Ordinance produces an interesting three months before the challenged Ordinance’s effective date.

As background, the Ordinance establishes mandatory paid sick leave for employees who work at least 80 hours within Austin in a calendar year.  The ordinance is set to take effect on October 1, 2018, and will require businesses to provide up to 64 hours of paid sick leave to employees working over 80 hours per year within the City of Austin.  Under the Ordinance, leave may be used for the employee’s or a family member’s illness, injury, health condition or preventive care, or as necessary to deal with domestic abuse, sexual assault or stalking involving the employee or a family member.

In April 2018, a lawsuit was filed by the Texas Public Policy Foundation representing several plaintiffs, including the Texas Association of Business and the National Federation of Independent Business, and the Society of Human Resource Management, arguing that the paid sick leave ordinance violates the Texas Constitution and is preempted by state minimum wage law.  The plaintiffs also asked the court to block the ordinance from going into effect while the case is being heard.

Although the headline is the temporary injunction was denied on June 26, 2018, there is much more to the story.  Perhaps most importantly, the trial court’s denial of a temporary injunction motion to enjoin the Ordinance allows Plaintiffs time to file an appeal on the injunction motion to the Third Court of Appeals in Austin.  Procedural mechanisms will likely be used by Plaintiffs to get the dispute heard by the court of appeals before the October 1, 2018, effective date.  Indeed, on July 5, 2018, Plaintiffs challenging the Ordinance filed their Notice of Appeal.

It is also newsworthy that the trial court denied all of Defendants’ motions to dismiss the action.  This means that the trial court deemed Plaintiffs’ legal challenges to the Ordinance to have legal merit.  In other words, the legal challenges related to preemption, due process and constitutionality are valid and there is a basis to bring the litigation.  In addition, Plaintiffs succeeded in having Intervenor-Defendant Workers Defense Project dismissed from the case.

Expect more news in the coming months now that the temporary injunction motion is ripe for appeal.  In the meantime, Austin employers should continue to get organized by reviewing handbook policies, leave verification procedures, and employee time tracking mechanisms.  Remember, under the Ordinance, even an employer headquartered outside the Austin city limits must offer sick leave to its employees working in Austin.

 

Wilson Stoker is an employment law counselor with Cokinos | Young, who is Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization. Wilson helps businesses navigate employment law issues related to on hiring, promotion, discipline and termination by providing common-sense, proactive solutions.  Wilson has particular experience defending employers in lawsuits and agency investigations involving discrimination, harassment, retaliation, wage and hour and leaves of absence.  View bio.