Two days before the Dallas paid sick leave ordinance goes into effect, two companies filed suit against the City challenging the ordinance. Attorneys with the Texas Public Policy Foundation, which represents these companies in the lawsuit, sent the City a letter last week, demanding that the City of Dallas follow San Antonio’s lead and delay the implementation of its almost identical ordinance until December 1. In a twist, the lawsuit was filed in the U.S. District Court for the Eastern District of Texas, Sherman Division. The plaintiffs are Collin County employers who are allegedly impacted by the ordinance because they have Dallas employees covered by the ordinance.

So where does this leave Dallas employers? That is currently unknown. It appears that, unlike the San Antonio city attorney, the Dallas city attorney was unwilling to enter into an agreement postponing the effective date of the ordinance. But in light of this federal lawsuit and as more Dallas area civic organizations begin putting pressure on the City to delay the ordinance, that position could soften. Right now, it appears that this is headed for a hearing which may, or may not, take place before August 1. Until then, employers with Dallas employees need to assess whether they want to take a wait and see approach, particularly in light of the fact that the City of Dallas has announced in its recently issued FAQs it will not enforce the ordinance until April 1, 2020, except in cases involving retaliation.

We will continue to keep you updated on this issue.