Also Bigger in Texas: The State’s Preemption of Local Ordinances

Local governments considering workplace regulations, environmental protections, and myriad other policies in Florida and Texas are poised to face new limits and litigation risks under the latest broadly crafted preemption bills.

Bills awaiting the signatures of Gov. Ron DeSantis (R) in Florida (SB 170) and Gov. Greg Abbott (R) in Texas (HB 2127) would bolster businesses’ and individuals’ power to sue to challenge local ordinances. They would also require city and county governments to produce a business impact analysis before passing many types of laws.

The measures bring an expansion of the perennial state-local power struggle, which often but not always features Republican-majority state legislatures limiting the policy reach of Democrat-led city and county commissions. For years, statehouses have focused preemption efforts on a specific policy area at a time, such as minimum wage or gun control, playing an annual game of whack-a-mole.

But this year’s Florida and Texas bills impose restrictions across a wide range of policies, granting cities limited exceptions for traditional local powers such as setting their budgets, zoning laws, and fire safety codes.

“We’ve seen stuff across the state of Texas that was unlike anything we’ve seen before,” said Annie Spilman, state director for the National Federation of Independent Business, referencing the plethora of ordinances Texas cities have passed or considered. Among them are Dallas proposals to ban landscaping companies from using gas-powered equipment and to require banks to disclose lending activity data to the city government.

With the preemption legislation this session, “we weren’t as narrow as we have been in previous sessions, because we’ve just seen it get worse and worse,” she said.

Worker advocates and other left-leaning opponents nicknamed the Texas measure the “Death Star” bill for its sweeping power to destroy local ordinances, including some aimed at protecting workers from heat-related illness and injuries on the job. Business groups, however, contend laws like this help save small businesses and other employers from a patchwork of local regulations that make it difficult and expensive to stay afloat.

Five-Year Campaign

Texas state lawmakers and business groups have pushed for five years for stronger preemption of local laws, Spilman said. The impetus of the effort came in 2018 when Austin mandated that businesses provide paid sick leave to their workers, followed soon after by Dallas and San Antonio. Business groups fought those laws in court and won on the premise that the Texas law preempting minimum wages also blocked employee benefit mandates.

Proposals to rein in local ordinances failed in 2019 and 2021 in the Texas legislature, which holds full sessions only in odd-numbered years. The bills failed partly due to pushback from LGBTQ advocates who feared the preemption measures would erase local anti-discrimination laws.

Further east, this isn’t Florida’s first attempt either at a broadly written preemption measure. The Republican-led state legislature passed a bill in 2022 to let businesses sue and win damages for the estimated lost profits resulting from their compliance with a local law.

DeSantis vetoed it, and the bill state lawmakers passed this year doesn’t carry the threat of local governments paying out millions in damages.

The preemption efforts are driven by a combination of business interests and ideological motives, said Yannet Lathrop, a senior researcher and policy analyst at the National Employment Law Project, which tracks and opposes preemption of local worker protection laws.

“We know that corporations have an interest in making sure that local ordinances are not successful,” Lathrop said, particularly for “progressive, pro-worker policies.”

Under the Florida legislation, local governments have to suspend enforcement of a new ordinance pending the outcome of litigation alleging that it’s preempted by state law. In the Texas measure, cities and counties are specifically blocked from imposing ordinances or regulations that fall under the state codes covering agriculture, labor, business and commerce, finance, insurance, and natural resources.

The Texas legislation also waives cities’ and counties’ governmental immunity from lawsuits under the preemption law.

State lawmakers’ fight to control policymaking also extends to limiting voters’ ability to change state law through citizen-initiated ballot measures. One such effort is headed to voters in Ohio, where the legislature approved a resolution (SJR 2) to require 60% voter approval for future constitutional amendments instead of a simple majority. That question is scheduled for a vote in an August special election, but opponents are suing to force rescheduling it to a general election date. A similar proposal fell short in the Missouri legislature this year.

The Ohio proposal is driven partly by a multi-state push for ballot measures protecting abortion rights, as well as efforts at placing a minimum wage increase question on Ohio ballots in 2024.

Wage Law Preemption

States preempting local laws is nothing new, and the affected policy areas are seemingly infinite. Twenty states have blocked local governments from banning natural gas lines in new home construction. Most states preempt local gun control measures, and a handful including Florida have taken especially aggressive approaches, enacting possible fines or removal from office for local lawmakers who pass them.

Local minimum wages and other labor laws are some of the most commonly preempted types of policies.

Twenty-six states preempt local governments from passing their own minimum wages, according to research from the Economic Policy Institute. Louisiana passed the first minimum wage preemption in 1997, and Florida and Texas each enacted the same restriction in 2003.

Many of those states also preempt local paid leave mandates, ordinances regulating employee scheduling, and prevailing wage requirements. Thirty-eight states preempt local regulation of gig economy work such as ride-share drivers for Lyft Inc. and Uber Technologies Inc., in most cases blocking cities from requiring that drivers be treated as employees instead of independent contractors.

Workplace law preemptions are most common in states with GOP-majority legislatures, but a few blue or purple states such as Colorado and Oregon also have limited local governments’ ability to set minimum wages.

“When you have more conservative lawmakers at the state level and more progressive lawmakers at the local level trying to pass pro-worker policies, then you will see the states react,” Lathrop said.

The reach of states’ preemption laws has often been the subject of litigation, as with the lawsuits over Austin, Dallas, and San Antonio paid sick leave laws. In Florida, the City of Miami Beach unsuccessfully argued in court that the state’s preemption of local minimum wages conflicted with the state constitution after the city passed a higher local wage floor in 2016.

Wages and other workplace mandates “are important enough that they should be vetted at the state level with a bipartisan, bicameral process,” Spilman said. “You are starting to see a lot more pieces of this” preemption legislation, “because you’re starting to see a lot more active local bodies stepping outside their traditional regulatory roles.”

To contact the reporter on this story: Chris Marr in Atlanta at cmarr@bloombergindustry.com

To contact the editors responsible for this story: Genevieve Douglas at gdouglas@bloomberglaw.com; Laura D. Francis at lfrancis@bloomberglaw.com