Attorney General Ken Paxton today filed an intervening plea in support of a lawsuit filed by The Center for the American Future to invalidate an ordinance mandating businesses provide paid sick leave passed in February by the Austin City Council.
Paxton filed his plea in intervention at the same time Gov. Greg Abbott announced he supported state legislative action, if necessary, to preempt ordinances like Austin’s that force businesses to follow city guidelines for paid sick leave.
As The Texas Monitor first reported, local business leaders complained they were steamrolled by a City Council that did not consider their input and created an ordinance that would result in a reduction in available jobs and the shuttering of businesses.
“These policies,” Abbott said in a statement provided to The Texas Monitor on Monday, “will be crushing, especially for small businesses, by imposing a heavy-handed mandate that will cause these small businesses to have to pay even more out of their own pockets. I believe it will lead to many small businesses having to shut down and will cause a reduction in employment opportunities for so many Texans.”
Paxton attached his plea to a suit filed by the conservative Texas Public Policy Foundation’s Center on behalf of the American Staffing Association, Burnett Staffing Specialists, HT Staffing, LeadingEdge Personnel and National Federation of Independent Business and Staff Force.
The lawsuit asks that a district judge issue a temporary injunction to block the ordinance, which is scheduled to take effect Oct.1. Rob Henneke, the center’s director and general counsel, is also asking for a court hearing before the end of May.
Paxton called the Austin ordinance, the first of its kind passed in Texas, “unlawful.” City councils in Dallas and San Antonio are debating whether or not to let voters decide on mandatory paid sick leave for their cities by referendum in November.
The plea filed by Paxton echoes the contention of Henneke and his clients that the ordinance violates state law by presuming to add to the compensation of workers under the Texas Minimum Wage Act, which is the sole responsibility of the Texas Legislature as outlined in the state Constitution.
“The Austin City Council’s disdain and blatant disregard for the rule of law is an attempt to unlawfully and inappropriately usurp the authority of the state lawmakers chosen by Texas voters and must be stopped,” Paxton said in a release issued this afternoon.
“When the Legislature enacted the Texas Minimum Wage Act, it intended to set a single, uniform policy for the entire state. The policy it set made no mention whatsoever of requiring employers to provide paid time off from work, What’s more, the law expressly preempts cities from passing a different law simply because they disagree with the judgment of our state’s elected representatives.”
Henneke’s lawsuit also contends the ordinance violates the equal protection clause in the 14th Amendment to the U.S. Constitution. The ordinance grants the city punitive subpoena powers, ostensibly to insure that businesses comply 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 told The Texas Monitor at the time the suit was filed. “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.”
“Small businesses are already drowning,” in regulation, Will Newton, Texas State Executive Directors for the National Federation of Independent Business, said in an Athens Daily review story last week. “Many mom-and-pop Austin businesses see this as a stab in the back.”
The ordinance is most likely to punish most severely, small and struggling businesses and young, old and marginally skilled employees, Carlos Carvalho, executive director, of the Center for Enterprise and Policy Analytics in the McCombs School of Business and Richard Lowery, associate Finance professor at the University of Texas wrote in an editorial for the Texas Tribune.
Johnny Taylor Jr., president of the Society for Human Resource Management said his organization supports the Center’s lawsuit. “This law further complicates the already complex web of local and state paid leave laws across the country,” he said. “The solution here is not another sick leave mandate — we need a nationwide solution that works for both employers and employees.”
At the start of 2018, eight states — Arizona, California, Connecticut (the first), Maryland, Massachusetts, Oregon, Vermont, and Washington — had passed statewide paid sick leave laws. Rhode Island’s law goes into effect on July 1, 2018.
The District of Columbia, New York City, Chicago, Minneapolis, Philadelphia and at least a dozen cities in New Jersey have at least some paid sick leave guarantees, according to a survey by the law firm Foley & Lardner.
Not unlike Texas, there has also been a strong pushback on local governments enacting mandatory paid sick leave. At least 18 states have passed laws preempting local rules including Florida, Michigan, Ohio, and Wisconsin, according to the Foley & Lardner survey.
Mark Lisheron can be reached at [email protected].