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Legal Update Article

Judge’s Decision Halts Dallas from Enforcing Paid Sick Leave Ordinance

Texas employers no longer must provide paid sick leave to their employees in Dallas following the decision of U.S. District Court Judge Sean D. Jordan. ESI/Employee Solutions LP et al. v. City of Dallas et al., No. 4:19-cv-00570 (E.D. Tex. Mar. 30, 2020). The decision was released two days before enforcement of the Dallas Paid Sick Leave Ordinance would have commenced.

In the federal lawsuit challenging the legality of the Ordinance, the court granted the plaintiffs’ motion for preliminary injunction, prohibiting the enforcement of the Ordinance against businesses pending resolution of the litigation. Concurrently, the court’s order also denied, in substantial part, the City of Dallas’ separate motion to dismiss the case.

The Ordinance went into effect on August 1, 2019, for employers with at least six employees, but the city delayed enforcement, except for violations of the anti-retaliation provision, until April 1, 2020. (For details of the Ordinance, see our article, Paid Sick Leave in Dallas and San Antonio Effective August 1.)

In granting the temporary injunction, Judge Jordan held that the plaintiffs established a substantial likelihood of success on their claim that the Ordinance is preempted by the Texas Minimum Wage Act and, therefore, unenforceable under the Texas Constitution.

Judge Jordan acknowledged that the decision “issues at a time when the American public and federal, state, and local authorities are confronted with the unprecedented public health crisis and economic upheaval caused by Coronavirus Disease 2019 (“COVID-19”).” But, he concluded, under Texas law, the public policy issue of whether the government should impose paid sick leave requirements on private employers is a decision for the Texas legislature.

The court’s decision follows  similar rulings issued in Texas state-court lawsuits challenging the paid sick leave ordinances enacted in the cities of Austin and San Antonio, both of which remain enjoined and are not currently being enforced by the cities. Paid sick leave is now on hold everywhere in Texas.

Please contact a Jackson Lewis attorney with any questions about this case.

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