Lawsuit: Austin’s sick leave act violates state minimum wage law

Austin paid sick leave lawsuit

On behalf of businesses in Austin and across the state, the Center for the American Future filed suit today to strike down an Austin ordinance forcing businesses to provide paid sick leave for their employees.

The Center, a project of the conservative Texas Public Policy Foundation examining government overreach, is asking a district judge to issue a temporary injunction to prevent the ordinance from taking effect on its scheduled date, Oct. 1, and is asking for a hearing on May 29, Rob Henneke, the center’s director and general counsel, told The Texas Monitor prior to filing the lawsuit.

“This is an unprecedented exertion of power by the city of Austin,” Henneke said. “What we’re really seeing is cities like Austin out of control. It’s another example of passing an ordinance first and we’ll figure out the detail later. It’s an irresponsible way of setting city policy.”

Henneke said the suit was filed on behalf of organizations including the Texas Association of Business, the National Federation of Independent Business in Texas and the American Staffing Association, which has an office in Grand Prairie.

The lawsuit argues the ordinance passed by a 9-2 council vote on Feb. 16 is unconstitutional because it’s guaranteed eight work days (or 64 hours) of paid sick leave is a paid benefit that will force businesses to exceed the cap set by the Texas Minimum Wage Act, Henneke said.

The City Council, in establishing a government prerogative for the mandated sick leave with no economic impact study to support it, is in violation of the due course of law, Henneke said.

By exempting companies whose employees are organized as a union, the council majority, Henneke said, is in violation of the equal protection clause in the 14th Amendment to the U.S. Constitution.

The Constitution also protects the owners of Austin businesses from the powers the ordinance grants to the city to subpoena those owners to insure compliance with the ordinance, Henneke said.

“We have the highest concern that this be treated, not as a policy disagreement but as a government encroachment on the Constitution,” Henneke said. “We are not suggesting this ordinance can be made better. We are suing to get rid of the ordinance. It’s a gross overreach on the city’s part.”

Henneke said he was particularly troubled at how quickly the ordinance was passed and how little input the city solicited from the public. As The Texas Monitor reported at the time of its passage, the process took just 17 days, with even its proponents, including author, City Council member Greg Casar, admitting the city had little idea of the impact the ordinance would have on as many as 50,000 businesses.

Work Strong Austin, a progressive coalition, estimated 223,000 workers, or 37 percent of the city workforce, would benefit from the ordinance — estimates not substantiated with any data or study provided on its website or to the city.

Rebecca Melançon, executive director of the 800 business-strong Austin Independent Business Alliance, who publicly voiced opposition to the ordinance, told The Texas Monitor many businesses would either shut down, or their owners would lay off workers, adjust their current vacation and paid holiday plans, or drop plans for raises or benefits increases.

“The City Council ignored the outpouring of opposition from the business community,” Henneke said. “If you look at what happened at the hearing, opponents faced what was basically a mob taking over the chamber with the approval of Mayor Steve Adler.”

The ordinance is particularly threatening to temporary employee companies that could be stuck paying twice, once for the employee taking a sick day and again for the employee taking his or her place, Henneke said.

The suit does not address the City Council’s decision to have taxpayers fund the extension of paid sick leave to a city workforce of about 13,500 city employees, including more than 2,500 temporary employees.

Henneke told The Texas Monitor he and staff had spoken to state Rep. Paul Workman, R-Austin, who has said, depending on the outcome of the suit, that he intended to introduce a bill to overturn ordinance in the next session of the Legislature.

“We’re working along parallel paths,” Henneke said.


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