Court Halts Austin Anti-Business Ordinance - Texas Scorecard

Austin City Council should really start reading state statute if it wants any of the ordinances it passes to actually go into effect.

In February, Austin passed an ordinance that would mandate private employers provide a minimum of 6 days of paid sick leave for their employees every year. Local businesses decried the move, saying it would hurt small businesses and cause them to have to lay off workers.

In response to the city’s incursion on private business’ liberty, Texas Public Policy Foundation, in conjunction with other business groups, filed a lawsuit in a Travis County District Court arguing the ordinance was illegal under state law.

When the district court refused to halt the mandate, TPPF appealed to the Third Court of Appeals where a three-judge panel ordered a temporary stay on the implementation and enforcement of Austin’s anti-business policy. It was originally slated to go into effect October 1st.

After the ruling, Rob Henneke, general counsel and litigation director for TPPF’s Center for the American Future, joined Austin’s businesses in a sigh of relief, saying:

“Without this stay, Austin business owners would be forced to incur significant costs implementing the requirements of the ordinance while its legality was in serious doubt.”

The appeals court will now decide if the policy violates the Texas Minimum Wage Act, which prohibits municipalities like Austin from regulating the wages of private employees. Since mandated paid sick leave changes the effective minimum wage—by mandating the same pay for less work—city ordinance is likely pre-empted by state law.

The city’s policy will be on hold while the case proceeds to briefing in the appellate court. TPPF’s brief is due in the court in September and a decision on the merits of the case can be expected late this year or early in 2019.

Taxpayers should demand that their state legislators fight to ensure liberty and prosperity for all Texans by preventing rogue local governments from enacting anti-business ordinances that threaten Texas’ vibrant economy and low-regulatory environment.