Dallas is the first Texas city to have implemented its paid sick leave law. A lawsuit stopped a similar ordinance in Austin from taking effect, and San Antonio delayed implementation of its law until December because of a legal challenge in state court.
The Texas Public Policy Foundation and Texas Association of Businesses last year sued Austin, the first city in Texas to pass mandatory paid sick leave. A state appeals court in November favored businesses’ argument that it violates the state’s minimum wage act.
Legal experts have said they expect the Texas Supreme Court to hear the Austin case.
Robert Henneke, an attorney with the Texas Public Policy Foundation who represents the two companies who sued Dallas, said the city attorney has yet to acknowledge the decision by the appellate court in Austin.
He said the motion to transfer the case to a different court is the city’s blatant attempt at “court shopping” to better the city’s chances. The court has until late August to decide on the transfer.
“The city continues to reject the only case law that exists in Texas on this issue,” Henneke said.
Two companies — ESI/Employment Solutions and Hagan Law Group LLP, which are based in Collin County — filed the federal lawsuit against the city two days before the ordinance was implemented Aug. 1.
The complaint argued that the city overreached in its regulatory power by including businesses that are headquartered outside Dallas but have employees who work within the city limits. It also contended that the ordinance violates the Texas constitution because it is inconsistent with the state’s minimum wage law.
The ordinance requires that private employees who worked in Dallas at least 80 hours in a year accrue at least one hour of paid sick leave for every 30 hours worked. The Dallas City Council in a 10-4 vote approved the paid sick leave ordinance in April after labor groups pushed the law.
Attorneys have said they expect the paid sick leave lawsuit to face a tough battle in federal court, largely because of the precedent set by the decision on Austin’s paid sick leave.
Texas Attorney General Ken Paxton also joined the businesses’ lawsuit against Dallas earlier this month.
Kent Rutter, an appellate lawyer based in Houston, said he thinks the city is looking for a better shot at success with a different judge. The case had been assigned to Judge Amos Mazzant, whom Rutter described as “fair but conservative.”
And the next one could either be equally as conservative or, if the city’s lucky, more sympathetic to employees without sick leave, Rutter said.
“They’re rolling the dice on a new judge,” Rutter said.
In response to the request for a preliminary injunction, Caso said it’s unlikely the companies that sued the city would face any repercussions of not complying with the law until April 2020, which is when the city will start to enforce the ordinance. Businesses can face up to a $500 fine if the city’s Office of Equity and Human Rights finds a violation.
Caso said ESI/Employment Solutions’ allegations of harm also “rely on numerous questionable or faulty assumptions” on the direct impacts the ordinance would have on the business.
The city also argued that the denial of the ordinance causes harm to the city which incurred costs to implement it, and the public. That harm outweighs any potential injury to the plaintiffs, the city attorney said.
As evidence, Caso included a study by the Institute for Women’s Policy Research, which relied on U.S. census data, that estimated about 300,000 workers don’t have paid sick leave.
The study concluded that number disproportionately affects people of color and low-income workers — two populations unlikely to work for an employer that offers sick leave.