If Pain, Yes Gain—Part 77: Court Approves Temporary Injunction of San Antonio Sick and Safe Leave Ordinance

Seyfarth Synopsis: On Friday, November 22, 2019, the trial court presiding over the San Antonio paid sick leave (“PSL”) lawsuit enjoined the City of San Antonio’s amended Sick and Safe Leave Ordinance (“SSLO”). While the SSLO is no longer scheduled to go into effect on December 1, 2019, a trial court hearing on the merits of a permanent injunction of the SSLO, an appeal of the trial court’s decision to temporarily enjoin the SSLO, or a decision from the Texas Supreme Court in the Austin PSL litigation all may impact the path of the SSLO in the coming weeks and months.

San Antonio became the second Texas municipality to pass a PSL ordinance in August 2018. Since that time both San Antonio, and more generally the State of Texas, have seen a continuous storm of Texas PSL developments. Here is a recap of notable PSL developments during this time, including the latest temporary injunction decision involving San Antonio.

August 2018: San Antonio passes original PSL ordinance; Texas Court of Appeals for the Third District (“Third District”) grants a request to enjoin the Austin paid sick leave ordinance's effective date, originally set for October 1, 2018.
November 2018: Bill that would preempt local PSL ordinances is introduced in Texas House of Representatives; Third District temporarily enjoins Austin PSL ordinance finding it violates the Texas Constitution because it is preempted by the Texas Minimum Wage Act (“TMWA”).
March 2019: City of Austin files petition with state Supreme Court appealing Third District’s decision.
April 2019: Bill that would preempt local PSL ordinances is under consideration in state Senate; City of Dallas becomes third Texas locality to pass a PSL ordinance.
May 2019: Despite gubernatorial support, passing through the state Senate, and being reported favorably out of Committee in the House, bills that would have preempted local PSL ordinances in Texas if passed, do not make the deadline for consideration on the House floor, and thus do not go to the Governor to sign into law.
July 2019: Several businesses and associations file a lawsuit seeking an injunction of the San Antonio ordinance’s August 1 effective date; The City of San Antonio agrees to voluntarily stay implementation of the PSL ordinance until December 1 stating that it would use the four-month delay to consider possible revisions to the PSL ordinance, and the court grants the stay, halting the August 1 implementation date and postponing the San Antonio PSL ordinance; A lawsuit is filed to enjoin the Dallas PSL ordinance two days prior to its August 1, 2019 effective date.
August 2019: Dallas PSL ordinance takes effect despite ongoing lawsuit to enjoin the ordinance.
October 2019: San Antonio adopts amended SSLO, allowing plaintiffs to renew their motion for a preliminary injunction of the ordinance.
November 2019: Plaintiffs’ motion to temporarily enjoin the SSLO is granted and a hearing on the merits of a permanent injunction is ordered as soon as possible.

San Antonio employers—and more generally Austin and Dallas employers—should keep in mind the following:

San Antonio: The court decision enjoining the SSLO does not explain the court’s reasoning and orders that a trial date be set to decide the case on its merits. Moreover, it is possible the City appeals the trial court’s decision to the Texas Court of Appeals for the Fourth District, and if so, that court may rely on the Third District’s rationale in invalidating the SSLO or come to a different conclusion as it is not bound by the Third District’s decision. Finally, any of these decisions could be appealed to a higher court. Thus, despite a temporary victory for San Antonio employers, it ultimately remains unclear whether the SSLO will take effect.
Austin PSL and Impact Across State: While the Texas Supreme Court has not decided whether it will hear the Austin PSL case, it has ordered the City of Austin and the Austin PSL ordinance’s business-opponents to file briefs on the merits. At this time, all merits briefing is to be completed by January 7, 2020. A Texas Supreme Court decision on the constitutionality of the Austin PSL ordinance would likely have statewide implications and thus impact the San Antonio PSL ordinance and related litigation, as well as the Dallas ordinance, which remains in effect despite an ongoing lawsuit to enjoin it. However, the current status of the case suggests a decision is at least several months away.

In light of the current state of affairs, here are some steps for employers to consider.

Monitor judicial developments involving the Austin, San Antonio, and Dallas paid sick leave ordinances; and
Continue to review existing sick leave policies and be prepared to either implement new policies or revise existing policies, as well as any related attendance, conduct, anti-retaliation, and discipline policies, in the event the SSLO or Austin PSL ordinance is ultimately upheld.

With the paid sick leave landscape continuing to expand and grow in complexity, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with the Texas PSL mandates and sick leave requirements generally. To stay up-to-date on Paid Sick Leave developments, click here to sign up for Seyfarth’s Paid Sick Leave mailing list.