Local NewsStatewide NewsTexas Supreme Court Denies Petition to Review Austin Paid Sick Leave Ordinance

The Austin City Council passed the ordinance in 2018 in a 9-2 vote and would have required employers to provide one hour of paid sick leave at the same rate as an employee’s normal hourly wage for every 30 hours worked.

The amount of paid sick leave was to be capped annually at 64 hours for employers with more than 15 employees and at 48 hours for employers with 15 or fewer employees.

Several businesses, the Texas Public Policy Foundation (TPPF), and Republican state officials opposed the ordinance as a violation of the Texas Minimum Wage Act (TMWA) and the Texas Constitution, arguing that the statewide laws preempt the powers of municipalities.

Because of the temporary injunction issued by the Third Court of Appeals, the ordinance has not gone into effect.

The district court initially denied the request for a temporary injunction from the businesses involved in the lawsuit, but that decision was reversed by the appellate court.

In their opinion issued in November 2018, the Third Court of Appeals ruled that the ordinance is unconstitutional since it violates the TMWA, which bars municipalities from regulating wages of private employers.

“[A]n employer subject to the Ordinance must pay employees who use sick leave for hours that they did not actually work,” wrote Chief Justice Jeff Rose. “The effective result is that employees who take sick leave are paid the same wage for fewer hours worked or, stated differently, that employees who take sick leave are paid more per hour for the hours actually worked.”

“Thus, under the plain language of the TMWA, the Ordinance establishes a wage,” said Rose.

Granting the temporary injunction, the appellate court remanded the case back to the district court to resume proceedings consistent with the new opinion.

But rather than returning to the district court, the city brought the appellate court’s decision to the Texas Supreme Court, where it was left pending for over a year until last week.

The decision from the Texas Supreme Court to deny review of the case effectively leaves the order from the appellate court in place.

Unless the city petitions the Texas Supreme Court to reconsider their denial within 30 days, the litigation is anticipated to continue in the district court, which would be required to rule on the request to issue a permanent injunction in light of the appellate court’s opinion that the ordinance is unconstitutional.

With the upper court declining to weigh in on the case, the constitutionality of other paid sick leave ordinances is still left to the lower courts to debate.

San Antonio and Dallas have passed similar ordinances, though both have also been caught up in lawsuits and are not currently being enforced.

The Dallas ordinance is facing a legal challenge in federal courts, while the San Antonio ordinance has been held up in a state district court with a trial date set for September 21, 2020.

San Antonio City Attorney Andy Segovia reportedly said that the “Texas Supreme Court’s decision to decline hearing of the City of Austin’s Paid Sick Leave case does not directly nullify San Antonio’s ordinance,” and that he would be discussing the “next steps” with the city council.

Opponents of the ordinance see the decision by the Texas Supreme Court as indicative of their view on the issue.

“Once again, Texas courts are unanimous that cities in Texas lack the lawful power to mandate paid sick leave that interferes with the ability of employers and employees to negotiate wages and benefits,” said Robert Henneke, the general counsel for TPPF. 

“Today’s denial by the Texas Supreme Court is a clear signal that cities across Texas should withdraw these unconstitutional ordinances.”