Opinion ID: 2361414
Heading Depth: 1
Heading Rank: 4

Heading: Unemployment compensation claim.

Text: In Board of Education of Covington v. Gray, Ky.App., 806 S.W.2d 400 (1991), the Court of Appeals held that the findings and conclusions reached in unemployment compensation proceedings are not res judicata and do not give rise to a claim of offensive collateral estoppel with respect to subsequent judicial proceedings arising out of the same incident. Id. at 403. We agree. The Restatement (Second) of Judgments § 83(3) (A.L.I.1982) provides that [a]n adjudicative determination by an administrative tribunal does not preclude relitigation in another tribunal of the same or a related claim based on the same transaction if the scheme of remedies permits assertion of the second claim notwithstanding the adjudication of the first claim. The Commentary to Section 83(3) explains that the principle applies whether the issue is claim preclusion (res judicata) or issue preclusion (collateral estoppel). Id., Comment a. Furthermore, the issue before the unemployment commission was not whether Berrier was wrongfully discharged in violation of KRS 337.999(14)(a), but only whether she was involuntarily terminated without good cause. KRS 341.370. Thus, there could be no claim of res judicata because there was no identity of issues. Newman v. Newman, Ky., 451 S.W.2d 417, 419 (1970); Williams v. Central Concrete, Inc., Ky. App., 599 S.W.2d 460, 461 (1979). Berrier asserts, however, that the unemployment referee's decision collaterally estopped Bizer from asserting that she was terminated for cause. Even if we were inclined (and we are not) to reject the principle enunciated in the Commentary to the Restatement (Second) of Judgments § 83(3), supra, collateral estoppel applies only if the party against whom it is sought to be applied had a realistically full and fair opportunity to litigate the issue, Sedley v. City of West Buechel, Ky., 461 S.W.2d 556, 559 (1970), and if principles of justice and fairness would be served by its application. City of Covington v. Board of Trustees of the Policemen's and Firefighter's Ret. Fund, Ky., 903 S.W.2d 517, 522 (1995). As pointed out in Board of Education of Covington v. Gray, supra , the informal procedures utilized in unemployment compensation proceedings do not afford any party a full, true opportunity to litigate issues, or even encourage any meaningful participation in the process. Id. at 403. Bizer was not even represented by counsel at the referee's hearing on Berrier's claim for unemployment compensation. An unemployment compensation hearing is designed to adjudicate promptly a narrow issue of law, and to grant a limited remedy to an unemployed worker. The use of an unemployment compensation decision to bind the parties in a subsequent . . . action . . . would be wholly inappropriate, and would frustrate the underlying purpose of . . . collateral estoppel. If findings entered at an unemployment compensation hearing may be used to establish the employer's liability . . . in a subsequent lawsuit, the employer would have a strong incentive to use its superior resources consistently to oppose a discharged employee's claim for unemployment benefits. Issues presented . . . will be contested strongly, and the hearings will become lengthy and more detailed, and will no longer be suited to the prompt resolution of unemployment compensation claims. Judicial economy would be frustrated, rather than improved, as many unemployment compensation hearings become forums in which claims for unlawful or unconstitutional discharge are tried. Id. (quoting Salida School District R-32-J v. Morrison, 732 P.2d 1160, 1165 (Colo. 1987)).