Dallas sick leave ordinance challenged in federal court

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paid sick leave

Two days before the City of Dallas was set to implement a mandatory paid sick leave ordinance for local businesses, two area businesses challenged the ordinance’s constitutionality in federal court.

Texas Public Policy Foundation, representing ESI/Employee Solutions, LP in Plano and Hagan Law Group LLC, in Allen, both outside the Dallas city limits, also filed a request for a preliminary injunction in the U.S. district court in Dallas.

TPPF also is representing plaintiffs who are challenging, in state court, a similar ordinance in Austin.

The lawsuit has an added significance, Henneke said, because both plaintiffs operate businesses outside of Dallas but have employees who do work in their Dallas offices, Rob Henneke, lead attorney in the lawsuit, told The Texas Monitor. The ordinance covers employees who work at least 80 hours a year at any other “facility, location, division, or job position with the same employer.” 

ESI/Employee Solutions estimated in the filing that the ordinance would cost it more than $300,000 a year. Hagan Law Group estimated the cost at $14,000 annually.

Henneke said attorneys for the city have given no word whether the city intends, in spite of the lawsuit, to begin enforcing the ordinance its city council approved in April.

Calls by The Texas Monitor to the city’s attorney’s office for comment Wednesday were not returned. Interim City Attorney Christopher Caso told The Dallas Morning News only that attorneys in his office are reviewing the lawsuit. 

In the case challenging Austin’s sick leave ordinance, passed in February 2018, a state appellate court ruled in November that the ordinance violates the Texas Minimum Wage Act and thus the Texas Constitution and issued a temporary injunction keeping the law from going into effect. The City of Austin is waiting to see if the Texas Supreme Court will hear its appeal.

San Antonio, which is also being sued for its sick leave ordinance by local business groups, has postponed a decision on implementing the ordinance until Dec. 1 in hopes that an outcome in TPPF’s Austin lawsuit will provide some legal direction. 

Dallas and San Antonio modeled their ordinances after Austin’s, which would require businesses with more than 15 employees to grant those workers as many as 64 hours or eight work-days of sick leave a year; businesses with fewer than 15 employees would have to provide 48 hours or six work-days a year.

Businesses in each of the three cities have complained that carrying out those mandates could close businesses and cost jobs. Local advocacy groups, backed by national labor organizations, contend that paid sick leave should be an employee right in Texas.

TPPF filed the Dallas lawsuit in federal district court to make the case that the sick leave ordinance violates several sections of the Bill of Rights: freedom of association in the First Amendment, equal protection under the Fourteenth Amendment, and the Fourth Amendment’s guarantee against unreasonable search and seizure. The seizure clause comes into play because the ordinance would allow the city to investigate payrolls to make sure sick leave benefits are being paid, Henneke said.

Jose Garza, one of the executive directors of the Workers Defense Project, with offices in Dallas, Austin and Houston, issued a statement to the news media condemning the Dallas lawsuit.

“This is a desperate 11th-hour attempt to rob 300,000 Dallas residents of the right to take a day off work when they get sick,” Garza said. “We support the city attorney’s effort to vigorously defend paid sick time and urge city council to stand with the people of Dallas who urgently need and expect to have paid sick time beginning on August 1.”

The ordinances demonstrate the pressure Texas city councils are under from “progressive, socialist, union-backed groups from out of state,” to pass local measures damaging to their business constituents, Henneke said.

“This is a way of kicking the can down the road,” Henneke said. “There is a desire on the part of these councils for the courts to make their decisions for them.”

Henneke said he has not yet asked the court for emergency relief to block the ordinance from taking effect Thursday. “It depends on what Dallas intends to do. Does Dallas stand down or does it double down and try to force this on businesses.

“It shows you the expansive reach of this paid sick leave ordinance,” he said.

Mark Lisheron can be reached at [email protected].

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