Pittsburgh and Philadelphia: A Tale of Two Paid Sick Leave Laws

Why was Pittsburgh’s Paid Sick Days Act struck down by a court yet the Philadelphia PSL law has not even been challenged in court?  An Allegheny County judge struck down the Pittsburgh PSL ordinance in December pgh-america-2053302_12802015 after finding that the city did not have the authority to enact it under the Pennsylvania Home Rule Charter and Optional Plans law. That law prohibits Home Rule Charter municipalities from determining “duties, responsibilities or requirements placed upon business, occupations and employers,” with limited exceptions.  An appeal of the judge’s decision is pending.

The Allegheny Institute for Public Policy, a non-profit research and education organization, recently issued a “Policy Brief” entitled “Time for Pennsylvania to Rein Muliberty-bell-656871_1280nicipal Regulations on Business.” It notes that the Home Rule Charter law specifically exempts Philadelphia from its prohibitions and recommends that the Commonwealth remove that exemption and bar municipalities “from enacting regulations not expressly permitted by the state,” i.e., a type of preemption law.

The Policy Brief notes that the Senate is considering a preemption bill, SB 128, as I had noted here.  The Policy Brief opined, as did I in my post, that even if both chambers of the legislature were to pass SB 128,  the Republicans do not have sufficient numbers in the House to overturn Democratic Governor Tom Wolf’s likely veto.

Preemption, Preemption, Preemption of Paid Sick Leave Laws

We all know the primary rule when buying a home is location, location, location. Municipalities are learning that when it comes to considering a paid sick leave ordinance, the primary concern is preemption, preemption, preemption. Has its state “preempted,” or negated, its authority to enact a PSL ordinance? If yes, the municipality might want to reconsider whether to step into the paid sick leave arena.  If it enacts an ordinance nonetheless, litigation challenging the ordinance is almost inevitable.

I have posted about numerous PSL do-44167_1280preemption developments. Most recently, a federal judge in Alabama upheld the state’s preemption law, passed in response to the City of Birmingham’s enacting an increase in the minimum wage. The law preempts municipal sick leave laws as well. Missouri and Ohio have enacted preemption laws within the past three months. The Maryland paid sick leave debate includes the issue of whether a state law, if one were to be enacted, will preempt Montgomery County’s paid sick leave ordinance. Preemption bills are pending in Minnesota and Pennsylvania. Pittsburgh’s appeal of a judge’s decision that it did not have authority to enact its paid sick leave law is pending.

Cities oppose preemption laws for obvious reasons. The National League of Cities, an organization which advocates for cities, recently issued a comprehensive report about the preemption law trend, entitled City Rights in an Era of Preemption: A State-by-State Analysis, available here. It addresses numerous types of state preemption laws; the PSL section begins on page 8.

The “Preemption States” tab on the menu bar of my blog, as its name suggests,  lists the states that have enacted preemption laws. The list has grown since I created it just a few months ago.  More states will be added to the list. That is a near certainty.

South Carolina May Ban Local Paid Sick Leave Laws

South Carolina may join the growing list of states that prohibit political subdivisions from requiring employers to provide paid sick leave.  Senate Bill 218 would ban political subdivisions from requiring employers to provide employees an “employee benefit”, defined as “anything of value that an employee may receive from an employer in addition to wages.”  The list of examples of employee benefits includes paid sick leave and paid personal necessity leave.  No political subdivision of South Carolina has enacted a PSL law.

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As I have noted in a prior post, the political composition of a state legislature, and its status as a red or blue state, are significant factors in determining whether to enact a PSL law or, in this case, preemption of such a law. South Carolina was a red state last November, giving President Donald Trump 54.9% of the vote. The state government is a “trifecta: Governor Henry McMaster is a Republican and Republicans have majorities in both houses of the legislature. Based on the political makeup of the state government, it would be a reasonable bet that South Carolina will soon be added to my list of preemption states.

Newton’s Third Law of Motion and Paid Sick Leave

Sir Isaac Newton’s Third Law of Motion, or a variation of it, is at work with paid sick leave laws. The Third Law states that for every action, there is an equal and opposite reaction.

Let’s look at a few examples. I posted earlier this week about a federal court’s decision upholding Alabama’s preemption law, which bars political subdivisions from requiring employers to provide employment benefits or compensation not required by federal or state law. As I noted in that post, the initial “action” was the City of Birmingham’s passing an ordinance to increase the minimum wage. The State of Alabama’s “reaction” was to pass its preemption law, an opposite but superior reaction since states dictate the authority of its political subdivisions.

Then there is Minnesota. Two cities–Minneapolis and St. Paul–have enacted paid sick leave laws while a third, Duluth, is studying the issue. Legislators in the Minnesota House and Senate have introduced legislation to preempt a politician subdivision’s ability to require employers to provide any paid leave benefits beyond those required by federal or state law, i.e., a preemption law. The state’s superior reaction would void the two city ordinances and likely end the study in Duluth.

Will the Minnesota bill pass? Applying my less than scientific analysis, described here, it is unlikely to pass. Minnesota is a blue state, giving Secretary Clinton 49.6% of the votes last November. While Republicans control both the Senate and House of Representatives, Governor Mark Dayton is a Democrat. Assuming he would veto the bill, it would take two-thirds of each house to override his veto, a margin the Republicans do not have in either house. Bottom line: a preemption law is unlikely to get enacted in Minnesota. Continue reading

Race-based Challenge to Alabama Preemption Law Rejected

A federal court judge in Alabama last week rejected a variety of race-based challenges to the Alabama Uniform Minimum Wage and Right-to-Work Act, also known as House Bill 174 and Act 2016-18.  That law prohibited any political subdivision from requiring any employer to provide employees with any employment benefit or compensation not required by federal or state law and voided any existing requirements.  These types of laws are often referred to as preemption laws. Act 2016-18 was enacted in response to the City of Birmingham’s adoption of an ordinance to increase the city’s minimum wage.  Act 2016-18 voided that ordinance.

In prior posts, I have referred to this case as one related to paid sick leave laws because although the litigation focuses on the Birmingham minimum wage issue, Act 2016-18 prohibits political subdivisions from requiring employers to provide any employment benefit, which includes paid and unpaid leave which would seem to include paid sick leave.

Noting in his decision that “[p] laintiffs have painted this dispute as yet another chapter in Alabama’s civil rights journey,” District Court Judge David Proctor stated that their principal challenge to the law was that it transferred control over private sector employment from “municipal officials elected by a majority-black electorate to legislators elected by a statewide majority-white electorate.”  The plaintiffs also alleged that Act 2016-18 was enacted “with the intent of discriminating against the people who live and work in the City of Birmingham on the basis of race” in violation of the federal Voting Rights Act and numerous Constitutional amendments, including the Thirteenth Amendment, which outlaws slavery, and in violation of the “political process doctrine,” which bars states from altering “the procedures of government to target racial minorities.” The judge granted the defendants’ motion to dismiss in its entirety. Some claims were dismissed based on procedural issues such as sovereign immunity and standing while others were dismissed based on substantive law.

The case is Marnika Lewis v. Robert J. Bentley et al. USDC, Northern District of Alabama. Case No. 2:16-CV-690-RDP. Based on this decision, Alabama remains on my list of PSL preemption states.

Of Puppies, Wireless Cell Service, Bearbaiting and Paid Sick Leave in Ohio

I suspect you cannot even imagine how these topics relate to each other. Nor could I. Until I read Ohio Senate Bill No. 331, which passed both state legislative chambers and sits now on Governor Kasich’s desk, awaiting his signature or veto.

The bill’s initial purpose was to preempt local governments from regulating the purchase of puppies from high-volume dog breeders, often called puppy mills. Toward the end of the state legislative session, legislators larded up the bill with an olio of provisions. Recall my reference in an earlier post to Otto von Bismarck’s injunction to avoid watching sausage and law being made. This 57-page bill appears to be the product of master sausage makers.

Concerning the topics unrelated to PSL, those are for someone else’s blog. On the PSL issue, the bill has very broad preemption language. It states that unless required by federal or state law, matters relating to a laundry list of employment issues are “exclusively” the result of the employer’s policy or its agreement with its employees or its employees’ collective bargaining representative. The message to political subdivisions on these issues is unmistakable: do not even think about going there.

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Photo of Arlo

The taboo areas include “[w]hether an employer will provide employees with fringe benefits and the type and amount of those benefits.” A “fringe benefit” is “any benefit for which the employer would incur an expense,” including sick pay. Other off-limits areas include the minimum wage and various scheduling issues. Cleveland had been planning to vote on increasing the minimum wage in 2017. Including the scheduling issues is an obvious effort to squelch any municipality’s thought of passing a secure schedule ordinance, which a few cities nationwide have done recently.

Governor Kasich has much to consider in deciding whether to sign the bill. He may also want to consider seeking the comfort of his puppy (if he has one) as he ponders this. If he signs it or if he does not veto it within 10 days after it was presented to him, Ohio will join the list of preemption states on my blog’s menu bar. I will let you know.

Maryland To Consider PSL Law Yet Again; Preemption Battle Looms

Maryland Governor Larry Hogan has announced that he will propose a PSL law in the legislative session which begins in January. If enacted, Maryland’s will be the eighth state PSL law, joining Arizona, California, Connecticut, Massachusetts, Oregon, Vermont and Washington.

Describing it as “common sense” and balanced,” the Governor’s proposal appears to be an effort at compromise. It would require Maryland businesses with 50 or more employees to provide employees up to 40 hours of PSL annually. Tax incentives will encourage smaller employers to provide PSL, according to the Governor’s plan.  The press release from the Governor’s office is here.state-house-annapolis-md

Maryland has considered PSL bills for at least three years. Earlier this year, the Maryland House of Delegates approved a PSL bill that would require employers with 15 or more employees to provide up to 56 hours of PSL annually. That bill did not pass the Maryland Senate.

Maryland’s Montgomery County enacted a PSL law in 2015, which went into effect on October 1, 2016. That law requires all county employers to provide PSL. Those with at least five employees can cap PSL accrual at 56 hours per 12 month period; smaller employers can cap paid sick time at 32 hours and also provide 24 additional unpaid hours.

Whether a Maryland PSL law would preempt s Montgomery County’s law is likely to be the topic of vigorous debate. The Montgomery County Council has already expressed its view that the state law should not preempt the county law, according to one report.

A few states with PSL laws have addressed preemption of local PSL laws inconsistently. Oregon’s law specifically preempts other local PSL law and negated two local PSL ordinances. The Arizona and Washington laws, the two most recent state PSL laws, take the opposite approach. They both allow other governmental entities to enact more generous PSL ordinances.

Federal Preemption of State and Local Paid Sick Leave Laws

I relish preemption arguments.  I am not referring to the state preemption laws which preclude municipalities from enacting local labor legislation (and which you can find by clicking on “Preemption States” on my menu bar above).  I am referring to an argument by an entity that a claim under a state or local law cannot be brought against it, i.e., is preempted, because the law interferes with federal purposes and objectives.

My appreciation for preemption arguments began with a lecture when I was in law school on the importance of procedural arguments.  At the end of the lecture, the professor asked provocatively: what kind of lawyer are you if you need to get to the merits of an argument?  In my decades of employment law practice, I have tried in every case to avoid the merits. With some success. The tools available for doing so include conflict preemption, obstacle preemption, field preemption, express and implied preemption, and more.

A federal preemption defense is only worth considering in a very narrow range of cases. There have been very few preemption cases dealing with paid sick leave laws. In July 2016, a railroad argued that the Massachusetts Earned Sick Time Law was preempted by the Railroad Unemployment Insurance Act (RUIA), hammer-1707721_640-1the Railway Labor Act and ERISA.  The parties agreed that the court would address the RUIA argument initially. The federal district court judge noted that federal regulation of railroad labor standards has been “longstanding and pervasive,” dating back to 1938. The court concluded that the RUIA “reflects clear congressional intent that the RUIA preempt all state laws, including the [Earned Sick Time Law] that relate to sickness benefits for railroad workers.” CSX Transportation, Inc. v. Healey (D. MA, July 13, 2016).

A year earlier, a group of construction contractors whose employees were represented by labor unions argued that the Massachusetts Earned Sick Time Law was preempted by Section 301 of the Labor Management Relations Act because resolution of claims under the state paid sick law depended upon an interpretation of their collective bargaining agreements.  The federal district court judge rejected the contractors’ claim.  Labor Relations Division of Construction Industries of Massachusetts v. Healey (D.MA, July 9, 2015). The contractors appealed to the Court of Appeals for the First Circuit. That court heard oral argument on the appeal in mid-September, 2016 but has not yet issued an opinion.

Another employee leave preemption decision, though not specifically a paid sick leave law case, is the Sixth Circuit’s decision is Sherfel v. Newsom, 768 F.3d (6th Cir. 2014). There, Nationwide had an ERISA plan that provided STD, LTD and Your Time benefits for absences from work. Enforcing the Wisconsin Family and Medical Leave Act, the state required Nationwide to pay STD benefits to employees who did not meet the definition of “disabled” under its STD plan. Nationwide sued in federal court,  arguing that the Wisconsin FMLA was preempted by ERISA to the extent it required Nationwide to pay STD benefits to employees who were not STD-disabled under the terms of its plan. The district court judge agreed and the Sixth Circuit affirmed, holding that the state FMLA was “preempted in no less than five different ways: three of them express, two of them implied—and each of them an independent reason that compels us to hold the Act invalid as applied here.”

I anticipate we will see more federal preemption arguments made. For those seeking to avoid the merits of a claim, it is a handy tool to have available for the right situation.