Austin Sick-leave Plan Challenged
Business coalition sues, calls rules ‘overreaching’ by government and ‘hard-hitting to small employers.’
The city’s new ordinance mandating that most private businesses in Austin provide paid sick leave to employees — heralded by supporters as the most progressive labor policy in Texas when it won approval two months ago — is facing a legal challenge to prevent it from ever taking effect.
Proponents of Austin’s sickleave rules, which are slated to begin Oct. 1, already faced the likelihood that some conservative state lawmakers would try to supersede the city’s authority by filing bills to overturn the new ordinance when the Legislature convenes again in January.
But a coalition of business organizations, including the Texas Association of Business and the National Federation of Independent Business, is aiming to render the rules toothless regardless. The group — with legal representation from the Texas Public Policy Foundation, a conservative think tank — filed a lawsuit in Travis County state District Court on Tuesday, seeking temporary and permanent injunctions against city enforcement.
“We needed to move quickly and stop any bleeding that might occur from this ordinance,” said
Jeff Moseley, chief executive of the Texas Association of Business, which is the state’s most powerful business lobbying group. “It’s overreaching (by the city government), and it’s hard-hitting to small employers.”
Work Strong Austin, an activist group that supported the ordinance, called the lawsuit frivolous and said the business groups involved in it are “seeking to undermine the democratic process and take away this basic human right and public health protection right from 223,000 working families” in the city.
The ordinance requires that most private Austin employers give each worker up to 64 hours — or eight full eight-hour workdays — of paid sick leave per year. Small businesses with 15 or fewer employees are required to meet a lower cap of 48 hours of paid sick leave per year, or six workdays.
Moseley and representatives of the other business organizations that signed on to the lawsuit said Tuesday that employers in the city are already expending resources gearing up for the Oct. 1 start of the new rules.
Among other legal arguments, their suit contends the ordinance violates the Texas Minimum Wage Act. The state law “explicitly prevents localities from requiring private employers to pay above” the federal minimum wage, the lawsuit says, but Austin’s municipal government will be forcing them to do so if the ordinance goes into effect because paid sick leave is a form of wages.
In addition, it contends the ordinance violates various elements of the Texas Constitution, including a “substantive due course of law” clause requiring that an economic mandate be underpinned by facts that support an overriding government interest.
“We don’t believe that the city of Austin can articulate a legitimate government interest” in enacting the sick-leave ordinance and can support it with data, said Robert Henneke, general counsel for the Texas Public Policy Foundation.
The ordinance was approved by the Austin City Council on a 9-2 vote in February, with Council Members Ora Houston and Ellen Troxclair in opposition.
Council Member Greg Casar, a proponent of the new rules, on Tuesday called paid sick leave “a common-sense approach to address our serious health and safety needs,” and he criticized the business groups for filing the lawsuit.
“If the big business lobby talked to anyone besides their expensive attorneys, maybe they would understand why working parents sometimes need to take a sick day,” Casar said in a written statement.
Austin Mayor Steve Adler was out of town Tuesday and unavailable for comment.
The business coalition is pushing for a May 29 hearing over its request for a temporary injunction to prevent enforcement of the rules.
Will Newton, state executive director of the National Federation of Independent Business, said many local employers consider the ordinance “a stab in the back” at a time when Austin already is becoming a city that’s too expensive in which to live or operate.
He also said the ordinance “negatively affects the Texas business climate overall, especially if other cities follow Austin’s lead.”
Some local lawmakers, including state Rep. Paul Workman, R-Austin, previously have said they’ll file legislation during the 2019 session of the Legislature to try to get the ordinance overturned — meaning the stage already was set for the sick-leave plan to be the latest flashpoint between liberal-leaning Austin and the Republican-controlled state government.
During last year’s session, the Legislature overturned the authority of Austin and other Texas cities to regulate ride-hailing companies, took away Austin’s ability to enact a new kind of fee on construction to help pay for some forms of housing and limited the rules Austin and other municipalities can put in place to protect trees.