Opinion ID: 2834302
Heading Depth: 2
Heading Rank: 1

Heading: Preclusive Effect of TWC Orders

Text: Igal maintains that res judicata cannot apply to his suit in a court of law because the Legislature intended Section 61 to provide an alternate, and not an exclusive, remedy. He also argues that because he is not required to appeal void judgments issued by an agency without jurisdiction, his unsuccessful prosecution of an administrative claim should not bar him from bringing a common law claim for the same transaction in state court. Brightstar responds that the court of appeals correctly applied res judicata because TWC had jurisdiction over the claim and rendered a final decision on the merits. Certainly in courts of law, a claimant generally cannot pursue one remedy to an unfavorable conclusion and then pursue the same remedy in another proceeding before the same or a different tribunal. Res judicata bars the relitigation of claims that have been finally adjudicated or that could have been litigated in the prior action. See Barr v. Resolution Trust Corp. , 837 S.W.2d 627, 628 (Tex. 1992). For res judicata to apply, the following elements must be present: (1) a prior final judgment on the merits by a court of competent jurisdiction; (2) the same parties or those in privity with them; and (3) a second action based on the same claims as were raised or could have been raised in the first action. Daccach , 217 S.W.3d at 449 . Thus, a party may not pursue a claim determined by the final judgment of a court of competent jurisdiction in a prior suit as a ground of recovery in a later suit against the same parties. Tex. Water Rights Comm’n v. Crow Iron Works , 582 S.W.2d 768, 771–72 (Tex. 1979). In short, res judicata precludes parties from relitigating claims that have been finally adjudicated by a competent tribunal. See Barr, 837 S.W.2d at 628 . We have not previously decided if res judicata applies to a final TWC decision. We have, however, held that to further the public policy discouraging prolonged and piecemeal litigation, the administrative orders of certain administrative agencies bar the same claims being relitigated in the court system. Westheimer ISD v. Brockette , 567 S.W.2d 780, 787, 789 (Tex. 1978) (applying the doctrine of res judicata to a ruling of the Texas Commissioner of Education); see also Coalition of Cities for Affordable Util. Rates v. Pub. Util. Comm’n , 798 S.W.2d 560, 563, 565 (Tex. 1990) (applying res judicata to a Public Utilities Commission ruling). Similarly, the United States Supreme Court has held that when an administrative agency is acting in a judicial capacity, res judicata bars subsequent litigation following the agency’s decision. United States v. Utah Constr . & Mining Co. , 384 U.S. 394, 422 (1966), superseded by statute , Contract Disputes Act of 1978, 41 U.S.C. §§ 601– 613. “When an administrative agency is acting in a judicial capacity and resolve[s] disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose.” Id. The Supreme Court later reaffirmed the “long favored application of the common-law doctrines of collateral estoppel (as to issues) and res judicata (as to claims) to those determinations of administrative bodies that have attained finality.” Astoria Fed. Sav . & Loan Ass’n v. Solimino , 501 U.S. 104, 107 (1991). Many states have adopted the Supreme Court’s three-pronged approach. [8] In addition to the federal courts and courts of other states, Texas courts of appeals have cited Utah Construction & Mining ’s three-part test in holding that res judicata bars relitigation of claims previously finally determined by an administrative agency. See, e.g. , Tricon Tool & Supply, Inc. v. Thumann , 226 S.W.3d 494, 511 (Tex. App.—Houston [1st Dist.] 2006, pet. denied); Ex parte Serna , 957 S.W.2d 598, 601 (Tex. App.—Fort Worth 1997, no pet.). The Court of Criminal Appeals has also used this approach in assessing the effect of administrative decisions on future court proceedings. See State v. Aguilar , 947 S.W.2d 257, 259 (Tex. Crim . App. 1997) (citing Ex parte Tarver , 725 S.W.2d 195, 199 (Tex. Crim . App. 1986)). In deciding wage claims under Section 61, TWC acts in a judicial capacity. The parties had an adequate opportunity to litigate their claims through an adversarial process in which TWC finally decided disputed issues of fact. Res judicata , therefore, will generally apply to final TWC orders. The fact that the Payday Law provides an alternative remedial scheme to the common law does not prevent res judicata from applying to TWC orders. Both courts and administrative agencies may provide remedies for injuries actionable under the common law. The Legislature intended the Payday Law to provide employees with a vehicle for relief when a traditional lawsuit proved too arduous. See Holmans v. Transource Polymers, Inc. , 914 S.W.2d 189, 192 (Tex. App.—Fort Worth 1995, writ denied). Typically, a statutory remedy is cumulative of the common law remedy, unless the statute denies the right to the common law remedy. Id. We agree with the court of appeals in this case that “[t]he Payday Act is not an employee’s sole and exclusive remedy for a claim based on past wages but is rather an alternative remedy that is cumulative of the common law.” 140 S.W.3d at 823. Payday Law actions do not abrogate common law claims against employers for an alleged failure to pay compensation. Rather, TWC offers an alternate means to the same remedy. Igal argues that under our holding in Cash America International, Inc. v. Bennett , res judicata does not preclude claimants from relitigating TWC claims in state court. 35 S.W.3d 12, 16 (Tex. 2000). The holding in Bennett was based on the Texas Pawnshop Act’s provision of alternate, concurrent remedies to certain common law claims. Id . at 14. We explained that “[t]he Legislature expressly left pledgors free to ‘seek a remedy in court’ if they are dissatisfied with the Commissioner’s determination or if the Commissioner does not make a timely determination.” Id. at 17 (citing Act of May 27, 1999, 76th Leg., R.S., ch . 1399, § 7, 1999 Tex. Gen. Laws 4724, 4726 (now codified at Tex. Fin. Code § 371.167( a))). Importantly, in that case, the Legislature had amended the relevant section of code to read “if the pledgor does not accept the commissioner’s determination, the pledgor may seek a remedy in court.” Tex. Fin. Code § 371.167( a). Although this amendment was not applicable to the case, the Court found it instructive in assessing the Legislature’s intent. The Labor Code does not provide Igal with any such recourse. Igal also argues that the court of appeals erred in its reliance on Holmans for the holding that res judicata applies to Igal’s claim. 914 S.W.2d at 189. In that case, the claimant filed a common law debt action to recover unpaid sales commissions and expenses. Id . at 190. He then filed an administrative wage claim with the Texas Employment Commission (TEC). [9] Id. The preliminary wage determination indicated that the employer owed the claimant over $25,000 in unpaid commissions. Id. However, prior to the final determination, the claimant withdrew his administrative claim to pursue common law relief. Id. The employer moved to dismiss the common law claim for failure to exhaust administrative remedies. Id. The court of appeals reversed, holding that the claimant could pursue his common law claim because he withdrew his wage claim before the agency made a decision. Id. at 194. The court reasoned that [s] hould a claimant choose to file a claim under the [Payday Law], utilize its remedial scheme, and appeal the final administrative order, then the claimant is properly required to abide by the statute’s provisions. We do not, however, construe the Payday Law as preempting a claimant, such as appellant, from choosing to pursue his claim as a common-law action in the courts of this state. Id. at 193. Accordingly, once a claimant who has alternate proceedings at his disposal to obtain relief available under the Payday Law pursues an administrative claim to a final decision, he forgoes his common law claims. To pursue a common law remedy for the same wages as sought in his payday claim, a claimant must withdraw his administrative claim before the agency issues a final decision. See id .; see also Tricon Tool & Supply, Inc. , 226 S.W.3d at 511 (claimant barred by res judicata when he failed to withdraw his administrative claim before agency decision became final). Because Igal did not withdraw his administrative claim prior to TWC’s final determination, res judicata will bar his claim if TWC’s order is considered final for the purposes of res judicata .