Attorneys for the City of Austin asked the Texas 3rd Court of Appeals Wednesday morning to lift its injunction blocking a paid sick leave ordinance, passed in February, from going into effect.
Rob Hennecke, an attorney for several of the state’s major business organizations, asked the panel of three justices to continue the stay until a lawsuit filed in April challenging the ordinance can be settled.
The appeals panel provided no timetable for a decision based on the arguments made by both sides on Wednesday. Hennecke said after the hearing he hoped the court would rule by the Thanksgiving holiday.
The appeals court in August granted an injunction requested by Hennecke, whose lawsuit contends the paid sick leave ordinance mandates an employee benefit preempted by the state’s minimum wage laws. The ordinance was to have gone into effect Oct. 1.
On Monday, the Greater Austin Chamber of Commerce filed an amicus brief, joining the Texas Association of Business and Attorney General Ken Paxton in arguing that the ordinance should be ruled illegal.
On Wednesday, Chief Justice Jeff Rose made clear that the appeals court would not weigh the policy merits of paid sick leave but only the legal questions involved.
Hennecke defended his legal contention of preemption Wednesday before the panel. He also asked justices to consider whether or not the subpoena powers required to insure compliance with the ordinance are punitive and in violation of the equal protection clause in the 14th Amendment to the U.S. Constitution.
Assistant City Attorney Paul Matula Wednesday told the panel the lawsuit was, itself, preemptive. Unless the law goes into effect, Matula said, Austin businesses will have no factual basis for contending it would result in burdensome regulatory and payroll costs.
“There was not significant evidence of probable imminent and irreparable damage,” he said. “It is not a very reliable estimate of reality.”
Justice David Puryear asked Matula if it wasn’t reasonable for business owners, in preparing for the new ordinance, to estimate what the costs might be and to contend that those costs might damage their businesses.
“Was there not significant evidence presented on the impact, on the steps necessary to prepare for the ordinance?” Puryear asked.
The panel also quizzed Matula on the city’s position on paid sick leave as an employee benefit. State law prohibits local governments from mandating benefits outside of its minimum wage guidelines.
Based on the grounds used by the city to pass paid sick leave, Justice Scott Field asked Matula if the city could, in theory, pass an ordinance requiring businesses to provide compensation for the additional cost to employees who work downtown.
The difference in that kind of compensation, Matula replied, is that it is payment for a service rendered. Sick leave is not payment for work, but for relief.
Henneke also asked the panel to consider that the Austin City Council passed its sick leave ordinance with an exemption for businesses with a collective bargaining agreement with an organized union.
As The Texas Monitor recently reported, national labor advocacy groups have supported much of the funding for the paid sick leave movement in Texas over the past year.
“The exception of unionized employees put those non-union businesses at a competitive disadvantage,” Henneke told the appellate panel.
Mark Lisheron can be reached at [email protected].