Texas Appellate Court Deals Another Blow to San Antonio’s Sick Leave Ordinance

On March 10, 2021, the Texas Fourth Court of Appeals upheld a preliminary injunction against San Antonio’s divisive “mandatory sick leave” ordinance originally issued back in 2019. The ordinance has gone through several iterations, but the most recent incarnation, passed by an 8-to-3 vote in October of 2019 would have required companies and  nonprofits of all sizes operating within the city of San Antonio to provide 56 hours worth of earned paid sick leave per year to employees. The prior incarnation of the ordinance (which was put on hold in July of 2019) would have required businesses with more than 15 employees to accrue 64 hours of paid sick leave per year to each employee. For smaller employers (defined as employers with fewer than 15 employees), the amount would have been lower – 48 hours. Austin and Dallas have both passed similar ordinances. The revised ordinance, in any event, was challenged in court before it could take effect and an injunction was issued by the trial court in November 2019. Preemption The Fourth Court of Appeals rested its decision to uphold the injunction on preemption grounds, finding that the San Antonio sick leave ordinance was contrary to the Texas Minimum Wage Act. For the uninitiated, preemption is an extension of the doctrine that a lower political subdivision cannot overrule a higher politicial subdivision. So, if the state (or federal government) has passed a law on a subject, a city (or state, in the case of a federal law) cannot alter that law with its own law – those laws are “preempted” by the higher political body’s law. However, if the state (or feds) have not passed a law on a subject, then the city (or state) can freely legislate. The question with regard to preemption almost always comes down to: what is the exact scope of the law doing the preempting (and, accordingly, what is the scope of the preemption). Other Cities’ Sick Leave Ordinances: What Do They Tell Us? Perhaps most interestingly (and most worringly for supporters of the sick leave legislation), the reasoning put forward by the Fourth Court of Appeals in this case is strikingly similar to the reasoning put forward by the Third Court of Appeals when upholding a similar injunction against the City of Austin’s similar sick leave ordinance, handed down in November of 2018. That decision was appealed to the Texas State Supreme Court in March of 2019, and in June 2020, the Texas Supreme Court declined to hear the case. So, while the Texas Supreme Court has not officially issued an opinion on the subject, and while San Antonio city officials have not publicly stated whether they intend to appeal the Fourth Court of Appeals’s decision in this case to the Texas Supreme Court, one can’t help but wonder why the Texas Supreme Court would decline to hear Austin’s sick leave challenge, but then take San Antonio’s sick leave challenge one year later. Dallas’s ordinance met a similar (albeit preliminary) fate in federal district court. What’s a Business to do? So, while the show is certainly not over, the decisions are certainly not final, etc., it does seem like a very steep uphill battle for San Antonio, Austin, and Dallas. In this climate, what should a business do? Well, something like “do nothing, but do it carefully” – and by that I mean, you can sort of relax for the time being, but keep an eye on what the appeals courts do, just in case something changes.

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