City of Austin’s paid sick leave law clears its first legal hurdle


Judge denies business groups’ request for injunction, but case likely headed to appeals court.

The ordinance mandates all employers in Austin offer paid sick leave.

Talk of legislators possibly nullifying city ordinance arises during arguments in courtroom.

Austin’s paid sick leave ordinance will remain on the books, at least for now.

On Tuesday, state District Judge Tim Sulak denied a request for a temporary injunction from a coalition of business interest groups who challenged the law passed in February. But his ruling was far from one-sided in favor of the city and the advocacy groups defending the ordinance.

Sulak tossed the Workers Defense Project from the case, ruling that the group had no standing to intervene as a defendant in the suit. The judge also ruled that the Texas attorney general’s office, which believes the city’s ordinance violates state law, can remain a plaintiff in the case.

“This case, as you said, has the aroma of a good political blood fight,” Sulak said, referring to comments by Paul Matula, the attorney representing the city.

Implicit throughout the hearing was that no matter the outcome, the 353rd District Court will not have the final say on the ordinance, set to take effect Oct. 1. Robert Henneke, general counsel for the Texas Public Policy Foundation — a conservative think tank representing the plaintiffs — said he will appeal the injunction. That legal move will shift the case four blocks north of the Travis County Courthouse to the Texas 3rd Court of Appeals on 14th Street.

“This is definitely a win for our clients,” said Beth Stevens, an attorney with the Texas Civil Rights Project, which sided with the defendants.

On the second day of the hearing in Sulak’s courtroom, the plaintiffs — the Texas Association of Business, the National Federation of Independent Business and the American Staffing Association — sought to show that the paid sick leave ordinance would have an immediate negative impact on Austin employers once it takes effect. On Monday, the court heard from Austin City Council Member Ellen Troxclair, who voted against the ordinance.

Annie Spilman, a lobbyist with the National Federation of Independent Business, testified Tuesday that a broad coalition of businesses had expressed “sheer panic” in regard to ordinance, but she refused to identify any of them, saying the firms feared residents might boycott them for opposing the law.

The ordinance requires small businesses with 15 or fewer employees to offer up to 48 hours of paid sick time — or six full eight-hour workdays. All other private employers will be required to provide up to 64 hours of paid sick leave.

Kelly Hudson, owner of the temp agency LeadingEdge Personnel, told the court that the paid sick leave ordinance would cut about $100,000 from his expected $600,000 annual profit. Hudson was unable to provide a specific breakdown but said costs would rise from having to reprint training materials and possibly hire a staffer to track sick leave for the 400 or more temporary workers that might qualify for it.

Matula said a courtroom was not the proper place to strike down the law.

“There is a place where these fights are supposed to be fought. It is about two blocks east of here in a beautiful granite building,” Matula said, referring to the Capitol.

During a cross-examination of the lobbyist for the National Federation of Independent Business, Matula wondered aloud whether the strategy behind the case was to stall implementation of the ordinance long enough that state lawmakers could pass a law to pre-empt it.

Immediately after the City Council passed the ordinance, state Rep. Paul Workman, R-Austin, had announced he would work to pass legislation to invalidate it.

“Part of the strategy here is for Rep. Workman to file and pass a bill that says, ‘City of Austin you can’t pass a law like that,’” Matula said.

Spilman, who said she has worked with lawmakers to draft legislation making it illegal for cities to regulate sick days, disagreed with Matula’s premise about the plaintiffs holding up the ordinance in court until the Legislature could render it null during the 2019 session.

“This is not a response to what the city is doing,” Spilman said. “It just so happens that the city is doing this.”

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