Seyfarth Synopsis: On March 30, 2020, just two days before Dallas' paid sick leave ordinance was scheduled to begin full enforcement, a federal court in Texas granted a preliminary injunction prohibiting enforcement of the ordinance pending the outcome of further litigation and a possible appeal. Dallas employers should read on to see how this impacts your organization.
As we previously reported, Dallas' Earned Paid Sick Time Ordinance (the "Dallas Sick Time Ordinance") requiring employers to provide employees who work within the City of Dallas with 48 or 64 hours of paid sick leave per year, depending on size, took effect for most employers on August 1, 2019 with full enforcement to begin April 1, 2020. However, on March 30, 2020, the U.S. District Court for the Eastern District of Texas Sherman Division (the "Court") granted a preliminary injunction order striking down the Dallas Sick Time Ordinance on state constitutional grounds and prohibiting enforcement of the law.
Relying upon a similar decision from the Texas Third Court of Appeals related to the City of Austin's own paid sick leave ordinance, the Court granted a preliminary injunction ordering that "no officer, agent, servant, employee, attorney, or other person in active concert with the City of Dallas may enforce the Paid Sick Leave Ordinance against any business or entity pending the resolution of this case."
The Court acknowledged that the decision comes at a time "when American public and federal, state, and local authorities are confronted with the unprecedented public health crisis and economic upheaval caused the Coronavirus Disease 2019." But the preliminary injunction ruling concludes ultimately that the decision cannot be made by city governments and that "[t]he state of Texas, through its constitutional structure and statutory law, has committed that public policy decision to the Texas Legislature."
What Does This Mean for Dallas Employers?
Employers who have not already made policy changes and have not begun implementation of the Dallas Sick Time Ordinance are not required to make any changes or proceed with implementation at this time, unless they choose to do so voluntarily. There may be other laws at play, however, including the recently-enacted federal Families First Coronavirus Relief Act (click here for information about the FFCRA) which may fill a paid sick leave gap left behind by the recent preliminary injunction.
Employers who have already changed policies and started implementing the Dallas Sick Time Ordinance may continue to do so voluntarily. They may also choose to suspend implementation, subject to necessary policy changes and prior communications to affected employees. However, employers seeking to remove paid sick leave benefits should first seek legal counsel.
As the paid leave landscape continues to expand, companies should reach out to their Seyfarth contact for solutions and recommendations on addressing compliance with specific PSL and paid time off laws and on PSL requirements generally. To stay up-to-date on paid leave developments, click here to sign up for Seyfarth's Paid Sick Leave mailing list.
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