On March 10, 2021, the Texas Fourth Court of Appeals upheld a preliminary injunction preventing San Antonio’s amended Sick and Safe Leave Benefits ordinance from taking effect since December 2019. In its decision, the appellate court held that San Antonio’s ordinance violates the Texas Minimum Wage Act. As detailed below, this decision is one in a line of decisions that has prevented these kinds of ordinances from taking effect across Texas over the last several years.
The City of San Antonio was the second city in Texas to enact a paid sick and safe leave benefits ordinance, following Austin’s enactment of such an ordinance two years earlier. San Antonio’s ordinance was scheduled to take effect on August 1, 2019, and would have required covered private employers to provide certain paid sick and safe leave benefits to employees based on hours worked within the city limits. The ordinance never took effect, however, because of litigation stemming from fierce opposition to requiring private employers to provide such benefits.
The Fourth Court of Appeals’ decision regarding San Antonio’s ordinance is consistent with its sister court’s ruling regarding the nearly identical ordinance in Austin. On November 16, 2018, the Third Court of Appeals held Austin’s ordinance was unconstitutional for the same reason, resulting in a preliminary injunction that likewise prevented the Austin law from taking effect. Observing the fate of the Austin ordinance, San Antonio officials amended their ordinance and delayed its effective date in an effort to overcome the same constitutional scrutiny that doomed the Austin ordinance. This attempt, so far, has failed.
San Antonio officials have not yet disclosed whether they will be appealing the decision to the Texas Supreme Court. The Texas Supreme Court refused last year to review the decision from the Third Court of Appeals regarding the Austin ordinance, suggesting that it is unlikely the high court would hear an appeal filed by San Antonio now.
While the Texas Supreme Court has yet to weigh in on this issue, two Texas appellate courts have now ruled that municipal ordinances requiring private employers to provide sick and safe leave benefits are unconstitutional, and one Texas federal district court has agreed with this conclusion. Dallas was the third Texas City to enact such an ordinance, and it similarly was met with staunch opposition and a lawsuit seeking to prevent its enforcement. The federal district court overseeing this lawsuit followed a similar path to its state court counterparts, and preliminarily enjoined Dallas’s ordinance from taking effect on March 30, 2020.
None of these lawsuits has concluded, and the decisions to date have all been preliminary in nature, but taken together, these decisions make clear the courts’ conviction that paid sick and safe leave ordinances (at least in their current form) violate Texas law, dealing a significant blow to the chances that these ordinances will ever go into effect. It seems that proponents of these laws will now need to turn to the legislature in hopes of carving out space within the Texas Minimum Wage Act to allow Texas cities to mandate these benefits in the private sector.
The 87th Texas Legislative Session began on January 12, 2021, but it is unclear what priority, if any, will be given to this issue of municipal paid sick and safe leave ordinances. Failure to act may very well close the door on sick and safe leave ordinances for good. Only time will tell.
What should Texas employers do now?
Employers should continue to monitor the three separate lawsuits challenging the ordinances in Austin, San Antonio, and Dallas. Although all three are currently enjoined, it would be wise to periodically check on the status of each ordinance.