Legislative Update: Texas Limits Local Governments’ Authority to Regulate and Passes the CROWN Act

The State of Texas infrequently regulates the workplace. This summer, however, Texas enacted two notable workplace laws about which employers should be aware.

Texas Regulatory Consistency Act

On June 13, 2023, Governor Greg Abbott signed House Bill 2127, the Texas Regulatory Consistency Act (the “Act” or “H.B. 2127”), which amends various Texas statutory codes, including the Labor Code, and preempts local lawmaking in various statutorily governed areas to assert Texas’s “sovereign regulatory powers.” Referred to by its opponents as the “Death Star Bill,” the Act is slated to take effect on September 1, 2023, and effectively prevents cities and counties from passing local ordinances beyond the scope of existing state laws in numerous fields of regulation, including labor and employment, agriculture, and finance.

Local ordinances potentially subject to the Act’s preemptive invalidation include Austin’s anti-discrimination law providing for inclusion of gender identity as a protected class, Austin’s Fair Chance Hiring Ordinance, and ordinances enacted in Austin in 2010 and Dallas in 2015 mandating rest breaks for workers in the construction industry, among others. 

Marking a profound shift from Texas’ prior approach to local governance, which granted extensive autonomy to local governments, the Act increases state control and limits local governments’ authority to take action. Whereas Texas’ constitution prohibits cities from enacting laws that are “inconsistent with” the constitution or laws passed by state legislators, the Act may go further by prohibiting cities and counties from enacting laws that are not inconsistent with state laws and/or address issues that the state legislature does not address. Given its broad language, it is difficult to predict which local ordinances the Act will invalidate when it takes effect. In the short term, local governments may be less inclined to pass ordinances, fearing the Act’s preemptive effect.

Notwithstanding the September 1 effective date, pending litigation may impede the Act’s implementation. On July 3, 2023, the City of Houston officials filed a lawsuit against the State of Texas challenging H.B. 2127, arguing that it violates the state constitution and weakens the cities’ and counties’ authority to self-govern. Specifically, the lawsuit claims that the Act conflicts with the portion of the constitution that allows cities to enact their own laws and that its premise requires a voter-approved constitutional amendment. Houston has asked a state court for an expedited declaration voiding the Act, creating the possibility that the court will temporarily stay or permanently block H.B. 2127’s enforcement.

Even if the Act takes effect, it remains unclear which local Texas ordinances it would preemptively invalidate. Epstein Becker & Green, P.C. will continue closely monitoring developments in this area as the September 1, 2023 effective date approaches. In the meantime, when drafting or revising employment policies, employers should continue to consider state laws, as well as local city and county ordinances impacting workplaces.

Texas’ CROWN Act

On May 28, 2023, Texas joined a growing number of states to enact the Creating a Respectful and Open World for Natural Hair Act (the “CROWN Act”), as Governor Abbott signed House Bill 567 into law. While some Texas cities, such as Austin, already have municipal versions of the CROWN Act, Texas is the 21st state to prohibit discrimination based on hairstyle or natural hair color associated with an individual’s race, ethnicity, and cultural identity on a state-wide level in Texas workplaces, schools, and housing policies. As we’ve previously explained, CROWN Act legislation is intended to protect from discrimination individuals with hairstyles associated with race, such as dreadlocks, afros, and braids. The CROWN Act amended Chapter 21 of the Texas Labor Code by adding Section 21.095.

The CROWN Act takes effect on September 1, 2023, making it illegal in Texas to discriminate or adopt a personal appearance or grooming policy that discriminates of the basis of an employee’s hairstyle or hair texture commonly associated with race. 

This is an excellent time for Texas employers to review and evaluate their workplace policies, including equal employment opportunity, anti-discrimination, and grooming/dress code/personal appearance policies to ensure that they are consistent with the new law in prohibiting discrimination on the basis of hair texture or hairstyle associated with race. It is also advisable to review this new law with managers and supervisors to ensure compliance with the CROWN Act in the workplace.