On the eve of the first day of enforcement for the Dallas Paid Sick Leave law, Judge Sean Jordan of the U.S. District Court of the Eastern District of Texas issued a temporary injunction stopping application and enforcement of the law. So what does this mean for companies with employees that were subject to the Dallas Paid Sick Leave law? Until the lawsuit in the Eastern District court is resolved at trial, the City of Dallas is prohibited from enforcing the sick leave law. Employers currently can operate as if the law was never enacted. That said, the court only issued a “temporary” injunction, so theoretically at trial the court could find that the City of Dallas’ law does not violate any federal or state constitutions and allow the City of Dallas to enforce its sick leave law. Trial is currently scheduled for March 2021.
In reality, the Eastern District court likely will not have to deal with this issue at trial, because the Texas Supreme Court should reach a decision on the enforceability of the Austin Paid Sick Leave law well before March 2021. Judge Jordan in his preliminary injunction relied heavily on the fact that this is a state issue and he has no reason to disagree with the decision reached by the Austin court of appeals (i.e., a decision that held Austin’s law violates state constitutional laws). In essence, Judge Jordan is allowing the Texas Supreme Court to determine whether or not the Austin court of appeals is correct. Assuming the Texas Supreme Court confirms that the city paid sick leave law is illegal, Dallas’ Paid Sick Leave law would also be illegal.
If you are an employer that updated its sick leave policy to comply with Austin, Dallas, or San Antonio, you can consider reverting back to your previous policy. There is a very low probability that the Texas Supreme Court will find in favor of the cities. However, if you did already change your policy, changing back may cause confusion with your employees so that may factor into keeping the policy in place and waiting for a final decision from the Texas Supreme Court. That decision should come before the end of the year. We will keep you updated.