Court Opinion

ID: 4342367
Source: CourtListenerOpinion
Date Created: 2018-11-16 17:23:35.09111+00
Date Added: 2024-06-11T14:21:16.514282
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                       NO. 03-18-00445-CV

 Appellants, Texas Association of Business; National Federation of Independent Business,
   American Staffing Association; LeadingEdge Personnel, Ltd.; Staff Force, Inc.; HT
  Staffing Ltd. d/b/a The HT Group; The Burnett Companies Consolidated, Inc., d/b/a
Burnett Specialists; Society for Human Resource Management; Texas State Council of The
   Society for Human Resource Management; Austin Human Resource Management
 Association; Strickland School, LLC; and The State of Texas//Cross-Appellants, City of
         Austin, Texas; and Spencer Cronk, City Manager of The City of Austin

                                                  v.

 Appellees, City of Austin, Texas; Steve Adler, Mayor of The City of Austin; and Spencer
   Cronk, City Manager of The City of Austin//Cross-Appellees, Texas Association of
 Business; National Federation of Independent Business, American Staffing Association;
 Leading Edge Personnel, Ltd.; Staff Force, Inc.; HT Staffing Ltd. d/b/a The HT Group;
 The Burnett Companies Consolidated, Inc., d/b/a Burnett Specialists; Society for Human
    Resource Management; Texas State Council of The Society for Human Resource
            Management; Austin Human Resource Management Association;
                     Strickland School, LLC; and The State of Texas

    FROM THE DISTRICT COURT OF TRAVIS COUNTY, 459TH JUDICIAL DISTRICT
        NO. D-1-GN-18-001968, HONORABLE TIM SULAK, JUDGE PRESIDING

                                           OPINION

               This is an interlocutory appeal from district court orders in a suit challenging the City

of Austin’s paid-sick-leave ordinance. The Texas Association of Business, et al. (collectively, the

“Private Parties”), and later the State of Texas as intervenor, sued the City of Austin and its city

manager, Spencer Cronk (collectively, the “City”), asserting that the paid-sick-leave ordinance is

unconstitutional and seeking temporary and permanent injunctive relief. The City challenged the
district court’s jurisdiction, arguing that the claims against it are neither ripe nor viable and that the

State lacks standing to intervene. The district court denied both the application for a temporary

injunction and the City’s jurisdictional challenges. Based on our determination that the district court

has jurisdiction over the claims asserted against the City and our holding that the City’s paid-sick-

leave ordinance violates the Texas Constitution because it is preempted by The Texas Minimum

Wage Act, we will reverse and remand for issuance of the requested temporary injunction and for

further proceedings consistent with this opinion.

                                             Background

                In February 2018, the City of Austin enacted an ordinance that would, stated

generally, require private employers to provide paid sick leave to their employees. See Austin, Tex.

Ordinance No. 20180215-049 (Ordinance). Under the Ordinance, Austin employers must “grant an

employee one hour of earned sick time for every 30 hours worked.” Id. § 4-19-2(A). The sick leave

accrues as soon as the employee begins working and must be made available for use either

immediately or after 60 days of employment, depending on certain circumstances of employment.

See id. § 4-19-2(B–D). An employer must pay the “earned sick leave in an amount equal to what

the employee would have earned if the employee had worked.” Id. § 4-19-2(J). The Ordinance caps

the sick leave an employee may accrue at either 48 or 64 hours per year, depending on the

employer’s size. See id. § 4-19-2(F–G). The Ordinance purports to give the City the authority to

subpoena employers’ records for compliance purposes, see id. § 4-19-7(a), and employers that

violate the Ordinance face civil and criminal penalties, see id. §§ 4-19-6(C)(1) (up to $500 fine for

each violation), 4-19-7(B) (Class C misdemeanor). The Ordinance was scheduled to take effect on

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October 1, 2018, but this Court granted a temporary stay pending resolution of this appeal. See

Texas Ass’n of Bus. v. City of Austin, No. 03-18-445-CV, 2018 WL 3967045, at *1 (Tex.

App.—Austin Aug. 17, 2018, no pet.) (mem. op.).

                The Private Parties—five companies with Austin employees and six business

associations—filed a declaratory-judgment action against the City asserting that the Ordinance

was facially unconstitutional—i.e., that the Ordinance, by its terms, always operates

unconstitutionally—because it is preempted by the Texas Minimum Wage Act (sometimes TMWA),

and because it violates the Texas Constitution’s due-course-of-law, equal-protection, association,

and warrantless-search clauses. See Tex. Const. arts. XI, § 5 (mandating that no city ordinance “shall

contain any provision inconsistent with the Constitution of the State, or of the general laws enacted

by the Legislature of this State”); § 3 (guaranteeing equal rights to all), 9 (prohibiting “unreasonable

searches or seizures”), § 19 (prohibiting deprivation of “life, liberty, property, privileges or

immunities . . . except by the due course of the law”), § 27 (guaranteeing “right, in peaceable

manner, to assemble together for their common good”); Tex. Labor Code §§ 62.001–.205 (the

TMWA); see also Tenet Hosps. Ltd. v. Rivera, 445 S.W.3d 698, 702 (Tex. 2014) (“A facial

challenge claims that a statute, by its terms, always operates unconstitutionally.”) (citing United

States v. Salerno, 481 U.S. 739, 745 (1987)). As relief, the Private Parties sought temporary and

permanent injunctions prohibiting the City from enforcing the Ordinance.

                The State intervened in the Private Parties’ suit, asserting only a preemption claim.

As relief, the State asked for a declaration that the Ordinance is preempted by the TMWA and a

permanent injunction against the Ordinance’s enforcement. The State also joined the Private Parties’

application for a temporary injunction.

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                The City responded by filing, among other pleadings, a plea to the jurisdiction as to

the Private Parties and a motion to strike the State’s intervention. In support of its plea to the

jurisdiction, the City asserted that the Private Parties lacked standing and that their claims were not

ripe for adjudication because they had not yet suffered any injury from an Ordinance that was not

yet in effect. The City also argued that governmental immunity barred the Private Parties’ claims

because the claims were not viable as a matter of law. Specifically, the City argued that the

preemption claim is invalid because the Ordinance is consistent with minimum-wage laws.

Similarly, in its motion to strike the State’s intervention, the City argued that the State lacked

standing and that its claims were not yet ripe for adjudication because the State had not suffered an

injury. The City also argued that the State’s preemption claim was not viable as a matter of law

because the Ordinance did not conflict with the TMWA and, thus, was barred by governmental

immunity.

                After a hearing on the competing motions, the district court denied the application

for temporary injunction. It is from this interlocutory order that the Private Parties and the State now

appeal. The district court also denied the City’s plea to the jurisdiction and motion to strike, and the

City cross-appeals from these interlocutory orders.

                                      The City’s Cross-Appeal

                We begin, as we must, with the City’s cross-appeal because it challenges the district

court’s subject-matter jurisdiction. See Crites v. Collins, 284 S.W.3d 839, 840 (Tex. 2009) (noting

that jurisdictional questions must be addressed before merits). In its first cross-issue, the City argues

that it was error for the district court to deny its plea to the jurisdiction because the Private Parties’

                                                    4
claims are not ripe for adjudication and because the Private Parties pleaded facially invalid claims

that are, as a result, barred by governmental immunity. In its second cross-issue, the City challenges

the district court’s failure to grant its motion to strike the State’s intervention, arguing that the State’s

preemption claim, like the Private Parties’ preemption claim, is not viable and that, even if it were,

the State lacks standing to join in the Private Parties’ claim.

Standard of review

                Whether a trial court has subject-matter jurisdiction is a matter of law that we review

de novo. See Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226–28 (Tex. 2004);

Texas Nat. Res. Conservation Comm’n v. IT–Davy, 74 S.W.3d 849, 855 (Tex. 2002). In performing

this review, an appellate court does not look to the merits of the case, but considers only the

pleadings and evidence relevant to the jurisdictional inquiry. See Miranda, 133 S.W.3d at 227;

County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002). When a plea to the jurisdiction

challenges the pleadings, as it does here, the trial court must construe the pleadings liberally in favor

of the pleader. Miranda, 133 S.W.3d at 226. If the pleadings do not allege facts sufficient to

affirmatively demonstrate jurisdiction, but the pleading defects are curable by amendment, the issue

is one of pleading sufficiency and the pleader should be afforded an opportunity to amend. Id. at

226–27.

Ripeness of Private Parties’ claims

                The Private Parties have raised facial challenges to the Ordinance’s constitutionality,

arguing specifically that the Ordinance is preempted by the TMWA; that it violates the due-course-

                                                     5
of-law, equal-protection, and association clauses; and that it constitutes a unconstitutional

warrantless search. On cross-appeal, the City argues that because the Ordinance has not yet gone

into effect, the Private Parties’ claims are not ripe. We disagree.

               Ripeness is an aspect of the justiciable controversy that is required before the judicial

branch is constitutionally empowered to resolve a dispute. See Patterson v. Planned Parenthood of

Hous. & Se. Tex., Inc., 971 S.W.2d 439, 442–43 (Tex. 1998) (observing that ripeness and other

justiciability doctrines derive in part from separation-of-powers principles and the constitutional

prohibition against advisory opinions). “To constitute a justiciable controversy, there must exist a

real and substantial controversy involving genuine conflict of tangible interests and not merely a

theoretical dispute.” Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. 1995) (quoting

Bexar–Medina–Atascosa Ctys. Water Control & Improvement Dist. No. 1 v. Medina Lake Prot.

Ass’n, 640 S.W.2d 778, 779–80 (Tex. App.—San Antonio 1982, writ ref’d n.r.e)). Ripeness is

“peculiarly a question of timing”—specifically, whether the facts have developed sufficiently that

a plaintiff has incurred or is likely to incur a concrete injury. Perry v. Del Rio, 66 S.W.3d 239,

249–51 (Tex. 2001) (quoting Regional Rail Reorganization Act Cases, 419 U.S. 102, 140 (1974)).

Ripeness is thus said to be lacking where the case involves “uncertain or contingent future events

that may not occur as anticipated, or indeed may not occur at all.” Patterson, 971 S.W.2d at 442

(quoting 13A Charles A. Wright et al., Federal Practice & Procedure § 3532, at 112 (2d ed. 1984)).

A justiciable interest in an ordinance requires “some actual or threatened restriction under that

statute.” Texas Workers’ Comp. Comm’n v. Garcia, 893 S.W.2d 504, 517–18 (Tex. 1995)

(discussing the related concept of standing and citing Pennel v. City of San Jose, 485 U.S. 1, 7–8

                                                  6
(1988) (to have standing to challenge a statute, a plaintiff “must demonstrate a realistic danger of

sustaining a direct injury as a result of the statute’s operation or enforcement”)).

               A justiciable controversy exists in this case. The Private Parties allege that Austin’s

City Council has passed an Ordinance, that the Ordinance imposes paid-sick-leave requirements on

certain employers in Austin, and that the Private Parties include Austin employers that will be

subject to the terms of the Ordinance. Accepting the truth of these statements, which the City does

not dispute, the Private Parties would be required by law to grant their employees paid sick leave as

specified by the Ordinance immediately upon its effectiveness, and the City would likely enforce the

Ordinance against the Private Parties. See Miranda, 133 S.W.3d at 226 (directing that, in

considering plea to jurisdiction, we construe pleadings liberally in favor of plaintiffs, look to

pleaders’ intent, and accept as true factual allegations in pleadings). The likelihood of the Ordinance

being enforced once effective, along with the probability that the Private Parties would comply by

granting paid sick leave to their employees, is a sufficient threat of actual injury to satisfy the

justiciability requirement for challenging a statute or ordinance—i.e., demonstration of a realistic

danger of sustaining a direct injury as a result of the statute’s operation or enforcement. See Pennel,
485 U.S. at 7–8 (concluding that plaintiff’s pleadings established that members would likely be

harmed by operation and enforcement of ordinance); see also City of Laredo v. Laredo Merchants

Ass’n, 550 S.W.3d 586, 590 (Tex. 2018) (considering and resolving constitutional preemption

challenge to city ordinance where suit was filed before ordinance’s effective date). Accordingly, we

hold that the claims are ripe for adjudication.

                                                  7
State’s standing

               The State intervened in the Private Parties’ suit to claim that the Ordinance is

unconstitutional because it is preempted by the Texas Minimum Wage Act. On cross-appeal, the

City contends that the district court lacked jurisdiction over the State’s suit because the State lacks

standing to sue the City on this issue. We disagree.

               Standing, like ripeness, is a threshold issue that implicates subject-matter jurisdiction

and, like ripeness, emphasizes the need for a concrete injury for a justiciable claim to be presented.

See Patterson, 970 S.W.2d at 442. Unlike ripeness, which examines when an action may be brought,

standing focuses on the question of who may bring an action. See id.; see also Raines v. Byrd,

521 U.S. 811, 818 (1997) (“The standing inquiry focuses on whether the plaintiff is the proper party

to bring this suit, . . . although that inquiry ‘often turns on the nature and source of the claim

asserted’ . . . .”). Judge-made criteria regarding standing do not apply when, as here, the Texas

Legislature has conferred standing through statute. See In re Sullivan, 157 S.W.3d 911, 915 (Tex.

App.—Houston [14th Dist.] 2005, orig. proceeding) (examining standing conferred by Family

Code). In statutory-standing cases, the analysis is a straight statutory construction of the relevant

statute to determine upon whom the Texas Legislature conferred standing. Id. (citing Texas Dep’t

of Protective & Regulatory Servs. v. Sherry, 46 S.W.3d 857, 859–61 (Tex. 2001)).

               The State asserts that the plain language of the UDJA entitles it to intervene in the

Private Parties’ declaratory-judgment action:

       In any proceeding that involves the validity of a municipal ordinance or franchise, the
       municipality must be made a party and is entitled to be heard, and if the statute,

                                                  8
       ordinance, or franchise is alleged to be unconstitutional, the attorney general of the
       state must also be served with a copy of the proceeding and is entitled to be heard.

Tex. Civ. Prac. & Rem. Code § 37.006(b) (emphases added). There is no dispute that the Private

Parties’ suit “involves the validity of a municipal ordinance”—it asserts that the Ordinance is invalid

because it is preempted by the TMWA—and that the Private Parties’ pleadings allege that the

Ordinance is unconstitutional on various grounds, including preemption. Thus, as even the City

concedes, the State, through the attorney general, is “entitled to be heard” in this proceeding.

               Even so, the City argues that “entitled to be heard” does not grant the State standing

to intervene is such cases, but instead allows the State to file an amicus brief. But anyone who

follows the applicable procedural rules can file an amicus brief with a court. See Tex. R. App. P.

11 (requirements for submitting amicus brief to appellate court). To that extent, the City’s proposed

construction renders the phrase “entitled to be heard” meaningless. See Texas Lottery Comm’n v.

First State Bank of DeQueen, 325 S.W.3d 628, 635 (Tex. 2010) (“We presume the Legislature

selected language in a statute with care and that every word or phrase was used with a purpose in

mind.”); Columbia Med. Ctr. of Los Colinas, Inc. v. Hogue, 271 S.W.3d 238, 256 (Tex. 2008) (“The

Court must not interpret the statute in a manner that renders any part of the statute meaningless or

superfluous.”). More importantly, however, when used in a legal context as it is here, the word

“heard” does not simply mean “to [be] listen[ed] to and consider[ed],” American Heritage

Dictionary of the English Language 810 (5th ed. 2011) (defining “hear”), it suggests the ability to

appear in court and present evidence and argument—i.e., to be a party, see, e.g., Black’s Law

Dictionary 481, 836 1267, 1398, 1625, 1736 (10th ed. 2014) (defining “day in court” as “right and

                                                  9
opportunity, in a judicial tribunal, to litigate a claim, seek relief, or defend one’s rights . . . [and the]

right to be notified and given an opportunity to appear and be heard when one’s case is called”;

defining “heard and determined” as “(of a case) having been presented to a court that rendered

judgment”; defining “ex parte trial,” under entry “proceeding,” as “trial in which only one side of

the case is heard, usu. because the opposing party is not present”; defining “opportunity to be heard”

as “chance to appear in a court or other tribunal and present evidence and argument before being

deprived of a right by governmental authority”; in definition of “standing” referencing “no authority

that I have found introduces the term [standing] with proper explanations and apologies and

announces that henceforth standing should be used to describe who may be heard by a judge”

(quoting Joseph Vining, Legal Identity 55 (1978)); defining “ex parte proceeding,” under “trial”

entry, as “proceeding in which not all parties are present or given the opportunity to be heard”). And

consistent with this notion, courts have consistently understood the State’s “entitle[ment] to be

heard” to mean the right to intervene in the litigation as a party. See Texas Dep’t of Trans. v. Sefzik,

355 S.W.3d 618, 622 (Tex. 2011) (per curiam) (citing section 37.006(b) for proposition that “the

state may be a proper party to a declaratory judgment action that challenges the validity of a

statute”); City of Austin v. Travis Cent. Appraisal Dist., 506 S.W.3d 607, 612 n.3 (Tex.

App.—Austin 2016, no pet.) (State intervened as a defendant under section 37.006(b)); Texas Bd.

of Chiropractic Exam’rs v. Texas Med. Ass’n, 375 S.W.3d 464, 473 (Tex. App.—Austin 2012, pet.

denied) (“[T]he Attorney General . . . intervened on behalf of the State of Texas to defend against

each side’s alternative constitutional claims” and “filed pleadings attacking those claims.” (citing

Tex. Civ. Prac. & Rem. Code § 37.006(b)). Accordingly, we hold that the State had standing to

intervene in this proceeding.

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Viability of claims

               As noted, both the Private Parties and the State pleaded that the City’s Ordinance

violates the Texas Constitution because the TMWA preempts the Ordinance. The Private Parties

also pleaded violations of the due-course-of-law, equal-protection, right-of-association, and

warrantless-search clauses. According to the City, which does not dispute any of the underlying

factual assertions, the district court lacks jurisdiction over these claims because they are not viable

as a matter of law and, as such, are barred by governmental immunity. See Honors Acad., Inc. v.

Texas Educ. Agency, 555 S.W.3d 54, 61–68 (Tex. 2018) (affirming dismissal of constitutional claim

on sovereign-immunity grounds where parties asserting a claimant lacked vested property rights);

Andrade v. NAACP of Austin, 345 S.W.3d 1, 11 (Tex. 2011) (sovereign immunity retained unless

plaintiff has pleaded viable claim of violation of constitutional right). We disagree.

       Preemption claims

               The preemption claims are viable for the reasons explained below in our analysis of

the district court’s denial of the application for temporary injunction.

       Due-course-of-law claim

               The City argues that the Private Parties’ due-course-of-law claim is not viable, and

thus barred by governmental immunity, because the Private Parties “did not allege they are unable

to pursue their occupation owing to the Ordinance” and because the Private Parties “failed to plead

that the Ordinance was not arguably rationally related to a legitimate governmental interest.” See

Patel v. Texas Dep’t of Licensing & Regulation, 469 S.W.3d 69, 87 (Tex. 2015) (establishing

standard for as-applied challenge to economic regulation under due-course-of-law provision);

                                                  11
Miranda, 133 S.W.3d at 226–27 (holding that in review of plea to jurisdiction challenging the

pleadings, courts must determine whether pleader alleged facts affirmatively demonstrating trial

court’s subject-matter jurisdiction). But in their pleadings, the Private Parties asserted that Patel

requires consideration of whether a statute “is so burdensome as to be oppressive,” see Patel, 469
S.W.3d at 87, and they also allege that they will suffer burdens under the Ordinance, including

incurring significant extra costs, scheduling problems, budget implications, and loss of

competitiveness. Further, the Private Parties asserted in their pleadings that “the City has no

governmental interest in mandating paid sick leave,” and in support of that assertion, the Private

Parties explained that although the City had made several “findings” in support of adopting the

Ordinance, none of the purported interests are legitimate as to the City because the FLSA and the

TMWA already address those interests. Construing their pleadings liberally in their favor and

looking toward their intent, we hold that the Private Parties have alleged sufficient facts to

affirmatively demonstrate the district court’s jurisdiction. See Miranda, 133 S.W.3d at 226–27.

        Equal-protection claim

                The City argues that the Private Parties’ equal-protection claim is not viable because

they “failed to plead allegations showing that the Ordinance” is not rationally related to a legitimate

government purpose. See First Am. Title Ins. Co. v. Combs, 258 S.W.3d 627, 639 (Tex. 2008)

(“[U]nless a classification ‘jeopardizes exercise of a fundamental right or categorizes on the basis

of an inherently suspect characteristic,’ the law will be upheld as long as it is rationally related to a

legitimate state interest.”) (quoting Nordlinger v. Hahn, 505 U.S. 1, 10 (1992)). But as noted above

in our discussion of their due-course-of-law claim, the Private Parties asserted in their pleadings that

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“the City has no governmental interest in mandating paid sick leave,” and in support of that

assertion, they explained that, despite the City’s “findings,” none of the purported interests is

legitimate as to the City because the FLSA and the TMWA already address those interests.

Construing the pleadings liberally in the Private Parties’ favor and looking toward their intent, we

hold that the Private Parties have alleged sufficient facts to affirmatively demonstrate the district

court’s jurisdiction. See Miranda, 133 S.W.3d at 226–27.

        Warrantless-search claim

                The City argues that the Private Parties’ warrantless-search claim is facially invalid

because they “failed to allege that an administrative subpoena issued under the Ordinance was not

subject to pre-compliance review,” see City of Los Angeles v. Patel, 135 S. Ct. 2443, 2453 (2015)

(“The Court has held that absent consent, exigent circumstances, or the like, in order for an

administrative search to be constitutional, the subject of the search must be afforded an opportunity

to obtain precompliance review before a neutral decisionmaker.”), and because the Private Parties

“failed to sufficiently allege that the [subpoena provision of the] threatened irreparable injury to

vested property rights,” see State v. Morales, 869 S.W.2d 941, 943–44 (Tex. 1994) (to overcome

general prohibition against civil challenge to penal statute, litigant must allege that penal statute is

unconstitutional and “threatens irreparable injury to vested property rights”). A review of their

pleadings, however, shows that the Private Parties have alleged that the Ordinance is not subject to

precompliance review, and they support that claim by asserting that the Ordinance does not provide

the means or opportunity to challenge a subpoena issued under the Ordinance because it does not

allow for a judicial challenge or judicial oversight. Relatedly, the Private Parties also emphasize that

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the Ordinance creates a criminal offense if a person fails to comply with a subpoena issued under

the Ordinance. Construing their pleadings liberally in their favor and looking toward their intent,

we hold that the Private Parties have alleged sufficient facts to affirmatively demonstrate the district

court’s jurisdiction. See Miranda, 133 S.W.3d at 226–27.

                Regarding the irreparable-harm issue, we note initially that the Private Parties argue

in their pleadings that the Ordinance is not a penal statute because the City has filed documents that

make clear that the provisions of the Ordinance will not be enforced by criminal prosecution but by

agency adjudication. To that extent, they did not need to “allege” irreparable injury to vested

property rights. See id. If, however, the Private Parties are seeking to challenge the Ordinance as

a penal statute, we agree that they have failed to assert sufficient facts to affirmatively demonstrate

the district court’s jurisdiction on this matter, but because their pleadings do not affirmatively negate

jurisdiction, the Private Parties must be given the opportunity to replead if they so choose. See id.

(“If the pleadings do not contain sufficient facts to affirmatively demonstrate the trial court[’]s

jurisdiction but do not affirmatively demonstrate incurable defects in jurisdiction, the issue is one

of pleading sufficiency and the plaintiffs should be afforded the opportunity to amend.”).

        Right-of-association claim

                The Private Parties alleged in their pleadings that the Ordinance violates their

constitutional right of association because it conditions a government benefit—the ability to

modify the sick-leave cap under a collective-bargaining agreement—on a business’s and employee’s

exercise of their right to associate—or, in this case, right to not associate by not joining a union. The

City, in its final viability issue, argues that the Private Parties’ freedom-of-association claim is

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facially invalid because (1) “the activity that they claim implicates a right of freedom of

association—the right not to permit a unionized work force—is insufficiently expressive to trigger”

constitutional concerns; (2) the Private Parties failed to assert in their pleadings that they were

relying on their employees’ associational rights rather than their own; (3) even if the Private

Parties had done so, the Private Parties lacked standing to raise the rights of their employees; and

(4) the Private Parties “have not pleaded that the Ordinance burdens their associational rights.”

We disagree.

               The Private Parties’ pleadings specifically assert that the Ordinance violates their

freedom of association under the Texas Constitution, see Tex. Const. art. I, § 27, because the

Ordinance discriminates between unionized employees and the Private Parties’ employees. In

support of their claim, the Private Parties asserted in their pleadings that they have the right under

the Texas Constitution not to associate—i.e., not to be a unionized employer operating with a

collective-bargaining agreement—but that the Ordinance violates this right because it allows only

unionized employers operating with a collective-bargaining agreement to “modify the yearly cap”

of paid sick leave, while denying this right to non-unionized employers. The Private Parties’

pleadings also assert that their employees are not subject to a collective-bargaining agreement.

Construing their pleadings liberally in their favor and looking toward their intent, we hold that the

Private Parties have alleged sufficient facts to affirmatively demonstrate the district court’s

jurisdiction. See Miranda, 133 S.W.3d at 226–27.

               Except for its challenge to the Private Parties’ failure to allege irreparable harm in

connection with its warrantless-search claim, which we remand to give the Private Parties an

opportunity to replead, we overrule the City’s cross-issues.

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                          The Private Parties’ and the State’s Appeals

                The Private Parties and the State appeal from the district court’s denial of their

request for a temporary injunction, arguing that the district court abused its discretion in denying the

injunctive relief because the Ordinance is preempted by the TMWA as a matter of law and because

the Ordinance will irreparably harm the Private Parties and the State.1

Standard of review

                The purpose of a temporary injunction is to preserve the status quo pending trial on

the merits. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). The “status quo” is the

“last, actual, peaceable, noncontested status which preceded the pending controversy.” In re Newton,

146 S.W.3d 648, 651 (Tex. 2004) (orig. proceeding) (quoting Janus Films, Inc. v. City of Fort

Worth, 358 S.W.2d 589, 589 (Tex. 1962)). “To obtain a temporary injunction, the applicant must

plead and prove three specific elements: (1) a cause of action against the defendant; (2) a probable

right to the relief sought; and (3) a probable, imminent, and irreparable injury in the interim.”

Butnaru, 84 S.W.3d at 204.

                Whether to grant or deny a temporary injunction is within the trial court’s sound

discretion. Id. A reviewing court should reverse an order granting injunctive relief only if the trial

court abused that discretion. Id. The reviewing court must not substitute its judgment for the trial

court’s judgment unless the trial court’s action was so arbitrary that it exceeded the bounds of

       1
         The Private Parties also challenge the denial in connection with their other constitutional
claims, but we need not address those claims given our resolution of the preemption claim in their
favor. See Tex. R. App. P. 42.1.

                                                  16
reasonable discretion. Id. However, to the extent the district court’s ruling rests on questions of

law, whether in the context of an abuse-of-discretion analysis or otherwise, we review those

determinations de novo. Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding)

(observing that a court has no “discretion” to misinterpret or misapply the law).

Cause of action

               The first requirement to be entitled to a temporary injunction is to plead and prove

a cause of action against the defendant. See Butnaru, 84 S.W.3d at 204. The City contends that the

Private Parties and the State cannot meet this requirement because their claims are not ripe, they lack

standing to sue, and they cannot overcome the City’s governmental immunity. But we resolved these

same jurisdictional issues against the City in our discussion above of the City’s cross-appeal. As

such, there is no jurisdictional bar to this temporary-injunction element. Further, because we

conclude, as explained below, that the TMWA preempts the Ordinance, the Private Parties and the

State have conclusively established that they have a cause of action against the City.

Probable right to relief sought

               The second requirement for a temporary injunction is to plead and prove a probable

right to relief. See id. The State and the Private Parties argue that they meet this requirement

because the TMWA preempts the Ordinance as a matter of law. The City contends that we cannot

analyze the preemption issue on appeal because it goes to the merits of the underlying claims. See

Davis v. Huey, 571 S.W.2d 859, 861–62 (Tex. 1978) (“[T]he merits of the underlying case are not

presented for appellate review. Appellate review of an order granting or denying a temporary

                                                  17
injunction is strictly limited to determination of whether there has been a clear abuse of discretion

by the trial court in granting or denying the interlocutory order.”). But in the case before us,

resolution of the question of whether the Private Parties and the State have met the probable-right-to-

relief requirement as to their statutory-preemption claim depends solely on questions of law—i.e.,

the statutory-construction questions of whether the TMWA expressly preempts municipal action and

whether the municipal action at issue, here the Ordinance, falls within the TMWA’s ambit. See City

of Laredo, 550 S.W.3d at 593–94 (discussing review of challenged ordinance). Stated differently,

for the district court to determine that the Private Parties and the State failed to plead and prove that

they have a probable right to recovery on their statutory-preemption claim, the district court must

have concluded that the TMWA does not preempt the Ordinance. That is a legal question that the

district court has no discretion to get wrong. See Walker, 827 S.W.2d at 840 (observing that a court

has no “discretion” to misinterpret or misapply the law). Accordingly, we must address the merits

of the statutory-preemption claim to determine whether the district court abused its discretion in

denying the temporary injunction.

                Home-rule municipalities, such as the City of Austin, possess the “full power of local

self-government” and look to the Legislature not for grants of authority, but only for limitations on

their authority. BCCA Appeal Grp., Inc. v. City of Houston, 496 S.W.3d 1, 7 (Tex. 2016) (citing

Tex. Loc. Gov’t Code § 51.072(a)). But the Texas Constitution prohibits city ordinances from

“contain[ing] any provision inconsistent with the Constitution of the State, or of the general laws

enacted by the Legislature of the State.” Tex. Const. art. XI, § 5(a); City of Laredo, 550 S.W.3d at

592. While home-rule cities have all power not denied by the Constitution or state law, and thus

                                                   18
need not look to the Legislature for grants of authority, the Legislature can limit or withdraw that

power by general law. City of Laredo, 550 S.W.3d at 592. The mere “entry of the state into a field

of legislation . . . does not automatically preempt that field from city regulation.” Id. (cleaned up).

Rather, “local regulation, ancillary to and in harmony with the general scope and purpose of the state

enactment, is acceptable.” Id. (cleaned up). Absent an express limitation, if the general law and

local regulation can coexist peacefully without stepping on each other’s toes, both will be given

effect or the latter will be invalid only to the extent of any inconsistency. Id.

               In this case, legislative intent in the TMWA to preempt local law is clear. First, the

TMWA expressly prohibits municipalities from regulating the wages of employers that are subject

to the federal minimum-wage requirements of the Fair Labor Standards Act (FLSA)2: “Th[e TMWA]

and a municipal ordinance or charter provision governing wages in private employment . . . do not

apply to a person covered by the [FLSA].” Tex. Labor Code § 62.151. Further, and of more

significance to this appeal, the TMWA explicitly provides that “the minimum wage provided by

[the TMWA] supersedes a wage established in an ordinance . . . governing wages in private

employment.” Id. § 62.0515(a) (emphasis added). The issue for us then is to determine whether the

City’s Ordinance falls within the TMWA’s ambit; specifically, whether the Ordinance establishes

a “wage.” To decide that, we look to the statutory text and the ordinary meaning of its words. See,

e.g., Molinet v. Kimbrell, 356 S.W.3d 407, 411 (Tex. 2011) (“The plain meaning of the text is the

       2
          The FLSA applies, stated generally, to employers whose “annual gross volume of sales
made or business done” is greater than $500,000. See 29 U.S.C. §§ 206(a) (setting minimum wage
for enterprises “engage[d] in commerce”), 203(s)(1)(A)(ii) (enterprise is “engaged in commerce” if
its “annual gross volume of sales made or business done” is greater than $500,000).

                                                  19
best expression of legislative intent unless a different meaning is apparent from the context or the

plain meaning leads to absurd or nonsensical results.”).

               The TMWA does not define “wage” so we must give that word its ordinary meaning.

See City of Laredo, 550 S.W.3d at 594 (“To decide [preemption issue], we look, as usual, to the

statutory text and the ordinary meaning of words.”). “Wage” refers to a “payment to a person for

service rendered . . . . The amount paid periodically, esp. by the day or week or month, for the labour

or service of an employee, worker, or servant.” Compact Oxford English Dictionary 693 (2d. ed.

1989); see Webster’s Third New Int’l Dictionary 2568 (2002) (defining “wage” as “a pledge or

payment of usu. monetary remuneration by an employer esp. for labor or services”). Thus, under the

plain language of the TMWA, the City’s Ordinance falls under the TMWA’s ambit if it establishes

the payments a person receives for services rendered.

               The Ordinance establishes the payment that a person receives for services rendered

to an employer. The Ordinance requires that employers provide one hour of paid sick leave for

“every 30 hours worked.” Ordinance § 4-19-2(A). This means that an employer subject to the

Ordinance must pay employees who use sick leave for hours that they did not actually work. The

effective result is that employees who take sick leave are paid the same wage for fewer hours worked

or, stated differently, that employees who take sick leave are paid more per hour for the hours

actually worked. This is best illustrated using an example offered by the State in its appellate brief:

       A part-time, hourly employee, who makes $10 per hour and who works an average
       of 15 hours a week for 50 weeks (a total of 750 hours) earns $750 for that work.
       Under the Ordinance, that employee will have earned 25 hours of sick leave over the
       course of the 50 weeks. If that employee uses all that earned sick leave, she will have
       earned $250 for time she did not work, making her actual hourly wage $10.33 (total

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       yearly pay with paid sick leave of $7,750 divided by 750 total hours worked). Stated
       differently, she will receive $250 more than she would have received without the
       Ordinance for the same number of hours work.

In sum, the Ordinance increases the pay of those employees who use paid sick leave. Thus, under

the plain language of the TMWA, the Ordinance establishes a wage.

               The City argues that the Ordinance does not establish a wage because “wage” means

only compensation for services and it cannot include fringe benefits such as paid vacation and paid

sick leave. In support of its argument, the City cites to the 1969 edition of the American Heritage

Dictionary of the English Language—purportedly the current edition at the time of the Legislature’s

1970 adoption of the TMWA—which defined “wage” as “payment for services to a workman;

usually remuneration on an hourly, daily, or weekly basis or by the piece.” American Heritage

Dictionary of the English Language 1440 (1st ed. 1969). The City also points to the 1933 edition

of Black’s Law Dictionary—purportedly the current edition at the time of Congress’s adoption of

the FLSA—which defined “wage” as “compensation given to a hired person for his or her services

. . . . Agreed compensation for services by workmen, clerks or servants . . . whether they be paid by

the hour, the day, the week, the month, the job or the piece.” Wage, Black’s Law Dictionary (3d ed.

1933). According to the City, these definitions establish that “wage” means a payment regularly

made to compensate the worker for his or her services or labor but not the type of paid sick leave

granted by the Ordinance. But these definitions simply establish, as we conclude above, that “wage”

generally refers to payment or compensation for work done or services rendered. These definitions

do not, however, necessarily preclude the inclusion of paid sick leave in the meaning of “wage.”

More importantly, under the terms of the Ordinance, employees who earn and take paid sick leave

                                                 21
will be paid more than employees who work the same hours without paid sick leave. Stated

differently, employees who take sick leave will receive more pay per hour than actually worked.

Thus, the Ordinance establishes a wage.

                The City also argues that one of the Private Parties has “implicitly conceded” that the

Ordinance is not preempted by the TMWA. Whether that is true or not, only the Texas Legislature,

not a private party in a lawsuit, controls preemption. See City of Laredo, 550 S.W.3d at 593

(discussing constitutional prohibition against ordinances that are inconsistent with constitution or

state law—i.e., preemption—and noting that Legislature has authority to preempt local laws).

                We hold that the Texas Minimum Wage Act preempts local regulations that establish

a wage, that the Ordinance establishes a wage, and that, accordingly, the TMWA preempts the City’s

Ordinance as a matter of law, thus making the Ordinance unconstitutional. See Tex. Const. art. XI,

§ 5 (mandating that no city ordinance “shall contain any provision inconsistent with the Constitution

of the State, or of the general laws enacted by the Legislature of this State”); see also City of Laredo,
550 S.W.3d at 593. As such, the Private Parties and the State have conclusively established a

probable right to the relief sought on their preemption claim.

Probable, imminent, and irreparable injury in the interim

                The final requirement to be entitled to a temporary injunction is to show “a probable,

imminent, and irreparable injury in the interim.” Butnaru, 84 S.W.3d at 204. An injury is

irreparable if the injured party cannot be adequately compensated in damages or if the damages

cannot be measured by any certain pecuniary standard. Id.

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                The State asserts that its sovereignty will be irreparably harmed if the Ordinance is

allowed to go into effect. We agree. The plain language of the TMWA preempts the Ordinance and,

as result, the Ordinance violates the Texas Constitution’s mandate that no city ordinance “shall

contain any provision inconsistent with the . . . general laws enacted by the Legislature of this State.”

Tex. Const. art. XI, § 5. The “inability [of a state] to enforce its duly enacted [laws] clearly inflicts

irreparable harm on the State.” Abbott v. Perez, 138 S. Ct. 2305, 2324 n.17 (2018).

                The Private Parties contend that they will be irreparably harmed if the Ordinance goes

into effect because they will incur costs that cannot be recovered. Specifically, the Private Parties

contend, and the City has conceded, that they will have to expend time, effort, and money to prepare

for the Ordinance going into effect. And once the Ordinance goes into effect, the Private Parties will

have to grant the paid sick leave and, when employees use that sick leave, will have to operate their

businesses with fewer employees at times while paying higher wages. But if the Private Parties are

successful in their challenge to the Ordinance, they cannot recover damages from the City because

of governmental immunity from liability and there are no other sources of recovery for these costs.

                We hold that both the Private Parties and the State have established that they will

suffer irreparable harm from the Ordinance.

                Based on our determination that the Private Parties and the State pleaded and proved

a preemption cause of action against the City, a probable right to the relief sought under that

preemption claim, and a probable, imminent, and irreparable injury in the interim, we hold that the

district court abused its discretion in denying the parties’ application for temporary injunction. See

Butnaru, 84 S.W.3d at 204. Accordingly, we sustain the Private Parties’ first issue and the State’s

                                                   23
first and second issues. Having done so, we need not address the Private Parties’ second issue,

which challenges to the district court’s admission of certain evidence.

                                            Conclusion

               We reverse that part of the district court’s order denying the City’s plea to the

jurisdiction with respect to the Private Parties’ warrantless-search claim, remand to give the Private

Parties the opportunity to replead that claim, and affirm the remainder of the order denying the

City’s plea to the jurisdiction. We affirm the district court’s denial of the City’s motion to strike

the State’s intervention. We reverse the district court’s order denying the Private Parties’ and the

State’s application for a temporary injunction and remand this case to the district court with the

instruction that it grant the requested temporary injunction and for further proceedings consistent

with this opinion.

                                               _________________________________________
                                               Jeff Rose, Chief Justice

Before Chief Justice Rose, Justices Puryear and Field

Affirmed in Part, Reversed and Remanded in Part

Filed: November 16, 2018

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