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Court Strikes Down Austin’s Paid Sick Leave Ordinance

Earlier this year, the city of Austin became the first Texas city to join the growing number of localities throughout the nation passing legislation requiring employers to provide paid sick leave to their employees. 

However, this past Friday, November 16, 2018, the Austin-based 3rd Court of Appeals issued an opinion that will prevent the local ordinance’s enforcement. The Austin ordinance set out to provide employees who worked at least 80 hours for a single employer in a calendar year with one paid hour of sick leave for every 30 hours worked. The ordinance was set to go into effect on October 1, 2018, but a legal challenge brought by several local business-aligned groups and the state of Texas sought a temporary injunction to enjoin the ordinance from taking effect. 

In their challenge, the state and the local businesses argued that the ordinance should be struck because it unconstitutionally establishes a “wage” in conflict with the Texas Minimum Wage Act, which preempts “wages” established by local governments. The city of Austin alternatively argued that the ordinance established an employment benefit, not a “wage,” and was thus constitutional. Ultimately, the 3rd Court of Appeals sided with the state and the local businesses, holding that the ordinance violated the Texas constitution and was preempted by Texas’ minimum wage law. The Court of Appeals’ order also instructs the trial court to enter an injunction prohibiting the ordinance’s enforcement.

While this ruling is currently limited to the Austin ordinance that was at issue in that case, it could have a larger impact on challenges to existing or proposed paid sick leave laws nationally. As we’ve written several times before, at least nine states (Arizona, California, Connecticut, Maryland, Massachusetts, Oregon, Rhode Island, Vermont, and Washington) and numerous major U.S. cities (including Chicago, the District of Columbia, Los Angeles, New York City, Oakland, Philadelphia, Portland [Oregon], San Diego, and San Francisco) already have some form of paid sick leave laws on the books.

Employers throughout the country should remain vigilant of local paid leave law developments and consult with counsel as necessary to ensure they are complying with the minimum sick leave requirements in their places of operation.  

© 2020 Foley & Lardner LLP


About this Author

Michael Ryan, Employment Lawyer, Foley Gardere Law Firm

Michael Ryan is a labor and employment associate in Foley Gardere’s Houston office. His practice involves counseling employers on a wide-range of employment matters, including hiring and firing decisions, EEO and FLSA matters, enforcement of personnel policies, leave issues, accommodations, drug testing laws, classification of employees and other wage and hour matters, OSHA claims, safety regulations and governmental investigations. Michael represents clients of all sizes, including multinational corporations, local businesses and executives. He has represented clients in various sectors,...

Rachel Powitzky Steely Employment Lawyer Foley Gardere Law Firm

Rachel Powitzky Steely is recognized as one of the foremost female trial lawyers in Texas specializing in employment law. She was selected as one of the top 20 female trial lawyers by Texas Lawyer Magazine and the only labor and employment attorney to receive the honor. Rachel has been recognized as a Texas “Super Lawyer” for more than ten years in the specialty of employment litigation. She was also a finalist for the Houston Business Journal's Outstanding Business Leader in Professional Services and was selected for Who's Who in Energy. She is a former student investigator for the Wage and Hour Division of the U.S. Department of Labor and is Board Certified, Labor & Employment Law, by the Texas Board of Legal Specialization.

Rachel is an expert in the field of unfair competition litigation, including extensive experience representing clients in prosecuting and defending expedited proceedings seeking emergency injunctive relief related to non-competes, trade secret theft and embezzlement, which allows her to provide quick, strategic and efficient representation for employers and executives.

Rachel also has particular expertise in wage and hour litigation, and a wide variety of employment matters, including disability laws; discrimination, retaliation and harassment; executive agreements; OSHA and safety; terminations, hiring, layoffs and severance agreements. She maintains an active trial docket while also providing the necessary preventative counseling that allows clients to avoid costly litigation.

Rachel serves as vice chair for the firm's Labor & Employment Practice.