A Dallas federal court has issued a preliminary injunction stopping the enforcement of the ordinance enacted by the City of Dallas last year that would have required many Dallas employers to provide paid sick leave to their employees (read our prior coverage of this ordinance here). Although the law went into effect last year, it was not scheduled to be enforced until April 1, 2020. With this order, the law cannot be enforced, pending final resolution of the case at some future date.
The court found that the plaintiffs in the case (two Dallas area employers and the State of Texas) had shown a substantial likelihood of succeeding on their claim that the paid sick leave ordinance is preempted by the Texas Minimum Wage Act (TMWA), which prohibits local laws that conflict with the TMWA. In reaching this decision the federal court specifically referenced the Texas Third Court of Appeals opinion that struck down Austin’s paid sick leave ordinance in 2018. The federal court agreed that by mandating payment to employees for services rendered in the form of paid sick leave, the Dallas law effectively established a “wage” in contravention of the TMWA. The court also found that there was a substantial threat of irreparable harm to the state, since it would be prevented from enforcing its own laws (i.e. the TMWA), and to the employers, as they would be forced to incur costs that they could not later recover from the city, which is immune from such claims under Texas law.
The court concluded that although its:
decision issues at a time when the American public and federal, state, and local authorities are confronted with the unprecedented public health crisis and economic upheaval caused by the Coronavirus Disease 2019 (“COVID-1”’) … policymakers at all levels of government are developing and implementing strategies to meet and balance the public health and economic concerns of their constituents.
The court went on to note:
on March 18, 2020, Congress enacted, and the President signed into law, the Families First Coronavirus Response Act (“FFCRA”) … which applies to private sector employers that employ fewer than 500 employees and some public sector employers, provides up to 80 hours of paid sick leave to workers who are ill, quarantined, or seeking treatment as a result of COVID-19, or caring for those who are sick or quarantined as a result of COVID-19. These provisions will be in effect until December 31, 2020.
For a comprehensive analysis of the Families First Coronavirus Response Act, including provision of sick leave for certain employees, please see our answers to these FAQs.