Austin Sick Time Ordinance Preempted, Appellate Court Rules

The Austin Earned Sick Time Ordinance is unconstitutional because it is preempted by the Texas Minimum Wage Act (TMWA), the Texas Court of Appeals, Third District, ruled on Friday. A state district court judge earlier this year said that the challenge to the Austin PSL ordinance had “the aroma of a good political blood fight,”

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The court’s ruling focused largely on whether the sick days required by the Austin ordinance were a “wage,” a term not defined in the TMWA. Relying on dictionary definitions to discern the “plain meaning” of that word, the court noted that the Austin Ordinance establishes a wage because it “increases the pay of those employees who use paid sick leave.”

The court explained that employees who use sick leave are paid a higher rate of pay for hours actually worked.  For example, the court noted, an hourly employee earning $10 per hour who works 15 hours per week for 50 weeks (750 hours total) will have earned $7500 for that work. If that same employee uses the 25 hours of sick leave earned during that period under the Austin ordinance, the employee’s hourly wage for hours worked would increase to $10.33.

The court concluded that since “the Ordinance increases the pay of those employees who use paid sick leave,” it is a “wage” under the TMWA and, for that reason, is preempted by that state law.

The court’s decision comes just a few days after a Texas  legislator pre-filed a bill to preempt local paid sick leave laws. My post on that pre-filing is here.

San Antonio is the only other Texas city to have enacted a PSL law. It is scheduled to be effective on August 1, 2019.

More Paid Sick Leave Turbulence in Texas

With a GOP trifecta–the governor is a Republican and both chambers of the legislature  have a Republican majority–one would not expect much PSL activity in Texas. But PSL turbulence continues in the Lone Star State and was on full display last week.

Last Friday, a Texas Court of Appeals enjoined the implementation of the Austin Earned Sick Time Ordinance pending the outcome of the legal challenge to it. The Austin Ordinance had been scheduled to go into effect on October 1, 2018. In reversing last month’s district court decision, the Court said that “enjoining the ordinance is necessary to preserve the parties’rights until disposition of the appeal.”

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In San Antonio, PSL proponents had collected enough signatures to have voters decide in November whether to adopt a PSL ordinance. On Thursday, the San Antonio City Council passed the PSL proposal, nullifying the ballot initiative.  The San Antonio PSL ordinance is scheduled to go into effect on August 1, 2019.

Here is where the GOP trifecta is a factor.  The Texas Legislature convenes in January 2019. It is widely anticipated that the legislature will consider a bill to prohibit political subdivisions from enacting a leave law. If enacted, such a law would likely negate both the Austin and San Antonio ordinances.

I suspect that San Antonio business interests are huddling this week to decide whether to file a challenge similar to that pending in Austin or sit on the sidelines and hope that the Austin ordinance (and, in turn, the San Antonio ordinance) will be negated by either the court or the legislature.

There’s more PSL turbulence in Texas, and more to come.

Equal Protection Challenge to Alabama Preemption Law Can Proceed, Court Says

The challenge to Alabama’s preemption law lives to fight another day, according to an Eleventh Circuit Court of Appeals decision last week. In 2016, the plaintiffs made various race-based challenges to the  Alabama Uniform Minimum Wage and Right-to-Work Act. That Act bars political subdivisions from requiring employers to provide employees with wages or “employment benefits,” including paid and unpaid leave, not required by federal or state law. The Alabama legislature enacted the law the day after the City of Birmingham’s passed an ordinance increasing the minimum wage within the city.  The state law voided that ordinance. The plaintiffs argued that the state law was unconstitutional and violated the Voting Rights Act. The defendants asked the court to dismiss the lawsuit.

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Last year, a federal district court rejected all of the plaintiffs’ challenges and dismissed the case. The Eleventh Circuit last week affirmed the dismissal of all but one of the challenges. Concerning the plaintiffs “equal protection” constitutional claim, the Eleventh Circuit held that the plaintiffs have plausibly alleged both that the MWA “burdens black citizens more than white ones” and that  it was enacted with a discriminatory purpose. The court remanded the equal protection claim to the district court for further proceedings.

The case is Marnika Lewis et al v.  State of Alabama et al. Docket No.17-11009 (11th Cir. July 25, 2018).

Paid Sick Leave Quarterly: 2Q 2018

The vast and complex patchwork of PSL laws added in 2Q a New Jersey law–the 10th PSL state–and an ordinance in Duluth, Minnesota. This summary includes:

Paid Sick Leave Laws Effective in Q2

Paid Sick Leave Laws Effective After Q2

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Paid Sick Leave Bills Introduced During Q2

  • None, though some introduced previously are still pending.

Paid Sick Leave Preemption Developments

Alabama: Marnika Lewis v.  State of Alabama et al. (11th Cir) (Case No.17-11009). Last year, a federal district court rejected challenges to the Alabama Uniform Minimum Wage and Right-to-Work Act, which bars political subdivisions from requiring employers to provide employees with wages or “employment benefits, ”including paid and unpaid leave, not required by federal or state law.   The plaintiffs have appealed to the U.S. Court of Appeals for the Eleventh Circuit, which heard oral argument on April 13, 2018.

New Jersey: The New Jersey Earned Sick Leave Law preempts the existing 13 municipal PSL laws within the state as well as any future local earned sick leave laws.  The state law is effective October 29, 2018,  at which time the 13 municipal laws will meet their demise, which will reduce by about a third the number of PSL laws nationwide.

Proposed federal bill: The Workflex in the 21st Century Act, introduced in the House of Representatives in November, would expand ERISA preemption to override the patchwork of paid sick leave laws for an employer which voluntarily adopts a written qualified flexible workplace arrangement” (QWFA) that provides the required minimum amount of “compensable leave” and offers employees at least one of the listed “workflex options.” The bill has been referred to U.S. House Committee on Education and the Workforce, which held a hearing on the bill on July 24, 2018.

Paid Sick Leave Litigation

 Challenges to state PSL laws

Massachusetts:  A railroad had argued that the Massachusetts Earned Sick Time Law (MESTL) was preempted by the Railroad Unemployment Insurance Act (RUIA), the Railway Labor Act and ERISA with regard to interstate rail carriers. The First Circuit held last June that the section of the MESTL dealing with benefits for an employee’s own medical condition was preempted by the RUIA. The court remanded the case to have the district court decide whether any other sections are preempted by the RUIA or the Railway Labor Act or ERISA and whether any sections of the MESTL survive as applied to interstate rail carriers. CSX Transportation, Inc. v. Healey  (1st Cir.  2017).

Massachusetts and Washington: The Massachusetts Earned Sick Time Law (MESTL) and Washington State Paid Sick Leave Act (WPSL) as applied to flight crew are unconstitutional and preempted by the federal Airline Deregulation Act (ADA), according to complaints filed by the Air Transport Association of America, an association of airline carriers.  The plaintiff claims these state laws violate the dormant Commerce Clause and the Fourteenth Amendment of the Constitution. The dormant Commerce Clause is an implicit restriction on the ability of state and local governments to impose an unreasonable burden on interstate commerce. The plaintiff also alleges that the Airline Deregulation Act (ADA) preempts the state PSL laws with regard to both flight crew and ground crew because they relate to a “price, route or service of an air carrier.”  Air Transport Association of America, d/b/a Airlines For America v. Maura Healey in her capacity as Attorney General of the Commonwealth of Massachusetts (D.MA)Air Transport Association of America, d/b/a Airlines For America v. The Washington Dep’t of Labor and Industries et al (W.D. WA).

Challenges to local PSL laws

Pittsburgh, PA: The Supreme Court of Pennsylvania will decide whether the City of Pittsburgh had authority to enact the Sick Days Act, which it enacted in August 2015. Last year, an appellate court affirmed a lower court’s decision that the city did not have the authority to enact it and invalidated the Act.  The lone dissenting judge said that Pittsburgh had the right to protect the health and safety of its residents and that the Sick Days Act  was an exercise of that right. The appeal will focus on an interpretation of the Home Rule Charter Law, which limits the City’s authority to regulate business “except as expressly provided by statutes….”  The briefing by the parties was completed on April 4, 2018. Pennsylvania Restaurant and Lodging Ass’n v. City of Pittsburgh and Service Employees Int’l Union, Local 32 BJ. (Pa. Supreme Court, 227 WAL 2017).

Austin, TX: A cadre of business interests had sued to enjoin implementation of the Austin Earned Sick Time Ordinance, which is scheduled to go into effect on October 1, 2018.  Noting that the case “has the aroma of a good political blood fight,” a state district court judge denied the injunction request. However, the plaintiffs might appeal the district judge’s decision or proceed to litigate the substance of their claims. The plaintiffs claim that the Austin Ordinance is preempted by the Texas Minimum Wage Law which requires employers to follow the federal minimum wage law, which does not require employers to pay for time not worked as the Austin PSL ordinance does. They also claim the ordinance violates the due process clause of the state constitution because the “articulated governmental interests are factually unsupported,” “…its mandates “have no rational connection to furthering those interests” and even if they did, the mandates are “so burdensome as to be oppressive in light of the alleged governmental interest.” They also argue that the Ordinance violates the state constitution’s equal protection clause because it allows employers and unions to modify the yearly cap in their labor contracts but does not afford non-union employers the right to modify the cap. Texas Ass’n of Business et al v City of Austin, Texas et al (D.Ct. Travis County 2018). 

Other Paid Sick Leave Developments To Watch

Albany County, NY: The County’s Paid Sick Leave Act was introduced in March and referred to the Legislature’s Law Committee. The Albany bill has the typical PSL architecture: employees accrue one hour of paid leave for every 30 hours worked, to an annual maximum of 72 hours for employers with at least ten employees, lesser and phased-in amounts for smaller employers except that employers with five or fewer employees would provide unpaid leave. The Law Committee is scheduled to consider the bill at a  July 23, 2018 meeting.

Cook County Earned Sick Leave Ordinance: Two Cook County municipalities that had previously voted to opt out of the County’s PSL ordinance revisited their decisions. In April, Western Springs opted in to the County PSL ordinance; Wilmette Village again voted to opt out of the County PSL ordinance.

Dallas and San Antonio, TX: PSL proponents in both cities have collected signatures to put the initiative on the November 2018 ballot.  In Dallas, PSL proponents submitted what they believed were a sufficient number of signatures to support the ballot initiative but city officials said recently that the number of valid signatures is   871 fewer than required. In San Antonio,  PSL supporters also submitted what they believed were sufficient valid signatures to support the PSL ballot initiative. The next step is for the City Council to decide whether to officially certify the issue for a ballot initiative.

Michigan: PSL proponents in Michigan have submitted what they believe are sufficient signatures to have voters decide in November whether to adopt a PSL law. Two business groups have filed challenges with the Board of State Canvassers concerning both the substance of the proposed ballot initiative and the validity of some signatures.

Westchester County, NY: The Westchester County Board of Legislators is considering a PSL bill that is substantially similar to the bill introduced but not passed last year. The proposed Earned Sick Leave Law has the typical PSL architecture: employees will accrue one hour of sick time for every 30 hours worked and may earn and use up to 40 hours in a year for itemized reasons. For employees of employers with at least 5 employees, the earned time is paid.  A public hearing has been set for September 17, 2018 at 7:30 p.m.

On Labor Day 2015, then-President Obama signed Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors, which requires certain government contractors to provide certain employees with paid sick leave. The EO applies to certain government contractors who enter into certain government contracts after January 1, 2017. While there has been speculation about the plight of EO 13706 in the Trump administration, no steps have yet been taken to negate it and, unless and until it is voided, the EO is in effect.

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All part of life’s rich paid sick leave pageant!

Injunction Denied in Austin Sick Time “Political Blood Fight”

Noting that the case “has the aroma of a good political blood fight,” a state district court judge yesterday denied the request of a cadre of business interests to enjoin implementation of the Austin Earned Sick Time Ordinance, scheduled to go into effect on October 1, according to a news report. The judge also ruled that the Texas Attorney General’s office could remain in the case as a plaintiff-intervenor but tossed the Workers Defense Project as a defendant-intervenor from the case, according to that report.

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The denial of the requested temporary injunction does not end the challenge to the Austin ordinance. The plaintiffs might appeal the district judge’s decision or proceed to litigate the substance of their claims.

PSL opponents are also anticipating a legislative fix. Texas Governor Greg Abbott has been vocal in his displeasure with local PSL laws (see here), raising the possibility that the legislature will enact a law preempting the Austin ordinance’ in its 2019 session. Texas preemption laws have recently banned local ride-share regulations, fracking bans and sanctuary cities.

There’s PSL-turbulence in the Lone Star State and plenty more to come. PSL proponents in Dallas and San Antonio hope to let voters decide in November whether to adopt a PSL ordinance.

Three More Intervene in Austin Sick Time Litigation

Add three more voices to be heard in the case challenging the Austin Earned Sick Time Ordinance. Last week, a workers’ rights organization, a restaurant and an electrician, together, intervened in the case and asked the court to dismiss the challenges to the ordinance.

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Last month, a cadre of business interests filed a lawsuit seeking to enjoin implementation of the ordinance, which is scheduled to go into effect on October 1, 2018.  They claim that the ordinance is preempted by the Texas Minimum Wage Act (TMWA) and violates various provisions of the state constitution. The TMWA requires Texas employers to pay employees a minimum wage established by the federal Fair Labor Standards Act (FLSA). The State of Texas has already intervened in the case, arguing only that the Ordinance was preempted by the TMWA. My prior posts on this PSL litigation are here and here.

Paid Sick Leave Quarterly: 4Q 2017

As we wrap up the last quarter of 2017, the vast and complex patchwork of PSL laws consists of more than 40 laws: 8 state laws, the District of Columbia, 2 county laws and about 30 municipal laws. My reports on the first three quarters of 2017 are here, here and here.  My 2017 fourth quarter PSL report is below.

In January, i will post a summary of 2017 PSL developments. In that post, I will also name the winner of the “2017 Paid Sick Leave Patchwork Award” to recognize the jurisdiction that has made the greatest contribution to the PSL patchwork in 2017. I suspect that most who follow this blog could guess the winner quite easily.

Paid Sick Leave Laws Effective This Quarter

Paid Sick Leave Laws Effective After This Quarter

  • New York City (amendment): New York City amended its Earned Sick Time Act to allow employees to use accrued time for reasons related to domestic violence. The law, now called the New York City Safe and Sick Time Law, is effective  May 7, 2018.
  • Rhode Island Healthy and Safe Families and Workplace Act (July 1, 2018).
  • Seattle, WA (amendment). On December 15, Seattle amended its Paid Sick and Safe Time Ordinance “to incorporate the more generous provisions of voter-passed, Washington Initiative 1433 establishing statewide paid sick leave.” Generally, where the state law is more generous than the Seattle ordinance, this amendment raises the ordinance standards to that state level. Among the changes, the Seattle ordinance now applies to employers with just one employee (it previously applied to employers with at least four employees); has expanded “family member” definitions; eliminates caps on the use of accrued time; and reduces the waiting period for use of accrued time from 180 to 90 days.  It is effective 30 days after enactment.
  • Tacoma, WA (amendment). Tacoma amended its PSL law to align it more closely with the Washington PSL law. The amendment is effective January 1, 2018.
  • Washington Law Establishing Fair Labor Standards by Requiring Employers to Provide Paid Sick Leave to Employees (January 1, 2018).

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Paid Sick Leave Bills Introduced This Quarter

Maryland: Governor Hogan recently proposed the Paid Leave Compromise Act, which would gradually reduce the size of an employer required to provide paid leave from fifty employees in 2018, to forty employees in 2019, to 25 employees in 2020 and subsequent years.  It would allow employees to use accrued time for any reason. The compromise bill is an attempt to avoid a January PSL showdown over the Governor’s veto last spring of a PSL bill passed by the General Assembly.

Albuquerque: Just ten weeks after voters narrowly rejected the Healthy Workforce Ordinance, on December 18, the Albuquerque Sick Leave Ordinance was introduced in the City Council. It has the typical PSL-ordinance architecture. The Ordinance would require employers with at least 50 employees to allow employees to accrue one hour of paid sick leave for every 40 hours worked, with a maximum accrual and use of forty hours annually, and carryover of up to forty hours of unused time.

Paid Sick Leave Preemption Developments

Alabama: Marnika Lewis v.  State of Alabama et al. (11th Cir) (Case No.17-11009). In February 2017, a federal court judge rejected challenges to the Alabama Uniform Minimum Wage and Right-to-Work Act, which bars political subdivisions from requiring employers to provide employees with wages or “employment benefits” not required by federal or state law.  An“employment benefit” includes paid and unpaid leave. The plaintiffs have appealed to the U.S. Court of Appeals for the Eleventh Circuit. Oral argument on the appeal is likely to be held in the first quarter of 2018.

Rhode Island: The Healthy and Safe Families and Workplace Act, passed in September, has a “uniformity” clause which prohibits municipalities from requiring employers to provide more paid sick and safe time than is required by this law.

Federal: The Workflex in the 21st Century Act, introduced in the House of Representatives in November, would expand ERISA preemption to override the patchwork of paid sick leave laws for an employer which voluntarily adopts a written qualified flexible workplace arrangement” (QWFA) that provides the required minimum amount of “compensable leave” and offers employees at least one of the listed “workflex options.” The bill has been referred to U.S. House Committee on Education and the Workforce. A subcommittee held a hearing on paid leave policies in December.

Paid Sick Leave Litigation

 Challenges to state PSL laws

Massachusetts: A railroad had argued that the Massachusetts Earned Sick Time Law (MESTL) was preempted by the Railroad Unemployment Insurance Act (RUIA), the Railway Labor Act and ERISA with regard to interstate rail carriers. The First Circuit held in June that the section of the MESTL dealing with benefits for an employee’s own medical condition was preempted by the RUIA. The court remanded the case to have the district court decide whether any other sections are preempted by the RUIA or the Railway Labor Act or ERISA and whether any sections of the MESTL survive as applied to interstate rail carriers. CSX Transportation, Inc. v. Healey  (1st Cir.  2017).

Challenges to local PSL laws 

Pittsburgh, PA: The Supreme Court of Pennsylvania has agreed to hear an appeal concerning the City of Pittsburgh’s authority to enact the Sick Days Act, which it enacted in August 2015. In May, an appellate court affirmed a lower court’s decision that the city did not have the authority to enact it and invalidated the Act.  The lone dissenting judge said that Pittsburgh had the right to protect the health and safety of its residents and that the Sick Days Act  was an exercise of that right. The appeal will focus on an interpretation of the Home Rule Charter Law, which limits the City’s authority to regulate business “except as expressly provided by statutes….”

Other Paid Sick Leave Developments To Watch

Austin, TX: The Austin City Council voted in September to consider requiring private employers to offer employees paid sick leave.  Austin has held three meetings to obtain the views of the community.  The city staff will submit a recommendation to the City Council for its consideration.

Duluth, MN: The Duluth Safe and Sick Time Task Force presented its report to the City Council on November 20. The majority recommendation has the typical PSL-ordinance architecture, though the task force lacked a consensus on an annual cap or carryover provisions. A second recommendation would require employers to have a written policy publicly available providing at least three days of PSL annually for full-time employees, a pro-rated amount for part-time employees.

Michigan: The state Board of State Canvassers has approved a petition to allow proponents of the Earned Sick Time Act to collect signatures to try to have the Act on the ballot in November 2018. Proponents have until early Spring 2018 to collect enough signatures.

Portland, ME. The mayor has presented his  proposed Earned Paid Sick Time for Workers Ordinance to the City Council. It has been referred to the Health and Human Services Committee “for further research and deliberation.” The ordinance has the typical PSL-architecture: employees working in Portland would accrue one hour of sick time for every 30 hours worked, to a maximum of 6 days annually. If enacted, the Ordinance would be effective July 1, 2018.

Spokane:  In response to voters having approved a state-wide PSL bill in November 2016, Spokane amended its PSL law to “sunset,” i.e., have no effect, upon the effective date of the state law, i.e., January 1, 2018.