Igal v. Brightstar Information Technology

• Citation: 250 S.W.3d 78
• Decision Date: 02 May 2008
• Docket Number: No. 04-0931.,04-0931.
• Parties: Saleh W. IGAL, Petitioner, v. BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. and BRBA, Inc., Respondents.
• Court: Supreme Court of Texas

250 S.W.3d 78

Saleh W. IGAL, Petitioner, v. BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. and BRBA, Inc., Respondents.

No. 04-0931.

Supreme Court of Texas.

Argued January 25, 2006.

Decided May 2, 2008.

Original Dissenting Opinion December 7, 2007.

Charles W. Sartain, Looper Reed & McGraw, Dallas, Wade Caven Crosnoe, Thompson Coe Cousins & Irons, L.L.P., Austin, TX, for Petitioner.

Anne Marie Finch, Godwin Pappas Langley Ronquillo, LLP, Houston, TX, for Respondent.

Amy Warr, Alexander Dubose Jones & Townsend, LLP, Rance L. Craft, Office of the Attorney General, Austin TX, for Amicus Curiae.

Justice WAINWRIGHT delivered the opinion of the Court as to Parts I, II, III, IVA, IVB2, and V, in which Justice GREEN, Justice JOHNSON, Justice WILLETT, and Justice McCOY^* joined, and an opinion as to Part IVB1, in which Justice GREEN, Justice JOHNSON, and Justice WILLETT joined.

In 1989, the Legislature amended the Texas Payday Law to create an administrative procedure for a claimant to file a wage claim with the Texas Workforce Commission (TWC). In this case, we consider for the first time whether TWC's final adjudication denying recovery of wages precludes the subsequent filing of a common law wage claim for the same wages in state court. We hold that when a claimant pursues a wage claim to a final adjudication before TWC, res judicata bars the claimant from later filing a lawsuit for the same damages in a Texas court of law.

I. Factual and Procedural Background

In 1989, Saleh Igal began working for BRBA, Inc. In April 1998, Igal executed an employment agreement with BRBA. Prior to the execution of the employment agreement, Brightstar Information Technology Group, Inc. acquired BRBA and assumed BRBA's obligations under the agreement. Igal alleges that Brightstar then terminated his employment without cause on January 19, 2000, entitling him to post-termination salary. Eighteen months later, on July 17, 2001, Igal filed a wage claim with TWC, asserting a violation of his employment agreement and claiming unpaid wages, bonuses, and benefits from May 2000 to January 2001. A TWC hearing officer dismissed his claim in a preliminary wage determination order. On October 5, 2001, Igal requested a hearing on that determination. On November 27, 2001, December 27, 2001, and February 14, 2002, a TWC appeals tribunal conducted hearings on Igal's appeal, which included appearances by counsel and witness testimony for both sides. On February 19, 2002, TWC issued its decision, concluding that Igal's claim failed on the merits and that TWC lacked jurisdiction because Igal filed his claim more than 180 days after his wages became due for payment. TWC notified the parties that the decision would become final fourteen days after its issuance unless one of the parties filed a motion for rehearing or sought judicial review of its decision.

In lieu of filing a motion for rehearing with TWC or seeking judicial review of TWC's decision, Igal sued Brightstar and BRBA in a Texas district court for breach of contract and declaratory judgment. Brightstar and BRBA moved for summary judgment, arguing that TWC's final decision barred Igal's claims through res judicata, or alternatively, that Igal failed to exhaust his administrative remedies. The trial court granted the motion for summary judgment, holding that res judicata barred Igal's claims. The court of appeals affirmed the trial court, holding that TWC had jurisdiction over Igal's claims because the 180-day filing limitations period was not jurisdictional and that res judicata barred Igal's breach of contract claims. 140 S.W.3d 820. We affirm the court of appeals and hold that the filing limitations period of Section 61.051, while mandatory, is not jurisdictional and that res judicata attaches to TWC's final administrative decision.

II. Payday Law

In 1915, the Legislature enacted the first Texas Payday Law, requiring certain types of employers to promptly and regularly pay employees the full amount of wages due.¹ At present, it requires private employers² of all types and sizes to pay wages owed to employees³ in full, on time, and on regularly scheduled paydays. TEX. LAB.CODE § 61.011. Originally, employees pursued unpaid wage claims in court, if at all. In 1989, the Legislature authorized the Texas Employment Commission (now part of TWC) to receive and adjudicate complaints for failure to pay wages owed. Act of May 31, 1989, 71st Leg., R.S., ch. 1039, § 3.01, 1989 Tex. Gen. Laws 4172, 4213-16 (current version at TEX. LAB.CODE §§ 61.051-.067). This amendment gives employees the option of filing in court or with TWC to recover unpaid wages. TEX. LAB.CODE § 61.051(a) ("An employee who is not paid wages as prescribed by this chapter may file a wage claim with the commission.") (emphasis added). Although there are no statutory limitations on the amount a wage claimant may pursue at TWC, typically the claims are too small to justify a lawsuit.⁴ According to TWC, it receives approximately 20,000 wage claims per year for initial decision, and about 18% of those claims are appealed to TWC's appeals tribunal yearly.

TWC's procedures are designed to resolve claims expeditiously and inexpensively, and it uses abbreviated mechanisms of an adversarial judicial process to adjudicate wage claims. For example, TWC's rules provide for issuance and enforcement of subpoenas for witnesses and documents, representation by counsel, and issuance of decisions of TWC's appeals tribunals in writing. See 40 TEX. ADMIN. CODE §§ 815.18, 821.45(c). The Legislature has granted TWC broad authority to enforce its decisions. See TEX. LAB.CODE §§ 61.019 (making the failure to pay wages a felony), 61.020 (authorizing the attorney general to seek injunctive relief against repeat offenders), 61.081 (making a final TWC order an administrative lien on all of an employer's property), 61.091 (granting TWC the authority to levy the employer's bank account). Aggrieved parties may appeal the initial Commission preliminary wage determination order to a TWC appeals tribunal, and, after exhausting administrative remedies, appeal the Commission's final order to a court of competent jurisdiction. Id. § 61.062(a).

III. Jurisdiction

Res judicata does not apply when the initial tribunal lacks subject matter jurisdiction over the claim. See Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430, 452-53 (Tex.2007). Consequently, we must first address whether TWC had subject matter jurisdiction over Igal's claim.

Igal argues that TWC dismissed his claim because it had no jurisdiction pursuant to section 61.051 of the Texas Labor Code. He maintains that the court of appeals erred by expanding TWC's jurisdiction beyond the Legislature's intention, as expressed in Section 61.051. Igal argues that because TWC lacked subject matter jurisdiction, TWC's decision could not preclude his subsequent lawsuit.

The Legislature establishes the jurisdiction of administrative agencies. Igal claims Subsection 61.051(c) limits TWC's jurisdiction. Subsection 61.051(c) of the Texas Labor Code states that "[a] wage claim must be filed not later than the 180th day after the date the wages claimed became due for payment." Igal performed his last services for BRBA on January 19, 2000. Two days later, Brightstar informed him that his work group had been discontinued, leaving him without a position at the company. Igal was paid through April 2000 but claimed that because Brightstar terminated him without cause, he was entitled to compensation under his contract through January 19, 2001. He filed his wage claim with TWC on July 17, 2001, seeking wages from May 2000 through January 19, 2001. In its decision, TWC stated:

The Commissions' jurisdiction extends back only 180 days from the filing of the wage claim. Any pay owed to the claimant would have been due well before the beginning of the Commission's jurisdiction in this case. Therefore, the wage claim was not timely filed and is dismissed.

Before this Court, Igal argues that he took TWC at its word that it did not have jurisdiction and therefore filed his wage claim in district court. He contends that the court of appeals expanded TWC's jurisdiction beyond the 180 days the Legislature intended.

In support of his argument that the 180-day filing limitations period is a jurisdictional threshold, Igal cites Texas Employment Commission v. Ortiz, 574 S.W.2d 213, 215 (Tex.Civ.App.-Corpus Christi 1978, no writ). In Ortiz, the court of appeals held that the twelve-day limit for the internal appeals to the administrative appeals tribunal of the Commission was jurisdictional. Id. However, the court in Ortiz did not interpret the statute at issue here.

This Court has not directly addressed whether the filing limitations period in Subsection 61.051(c) is a jurisdictional threshold. In Mingus v. Wadley, we held that a party suing on a statutory cause of action must comply with all administrative prerequisites, as a matter of jurisdiction. 115 Tex. 551, 285 S.W. 1084, 1087 (1926), overruled in part by Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71 (Tex. 2000). "The general rule is that where the cause of action and remedy for its enforcement are derived not from the common law but from the statute, the statutory provisions are mandatory and exclusive, and must be complied with in all respects or the action is not maintainable." Mingus, 285 S.W. at 1087. In Dubai Petroleum Co., we overruled Mingus "to the extent that it characterized the plaintiff's failure to establish a statutory prerequisite as jurisdictional." 12 S.W.3d at 76. Igal urges the Court to apply Mingus, not Dubai, and hold that a plaintiff's failure to meet a statutory prerequisite for a wage claim is jurisdictional. However, in Dubai, we discussed the evolution of this area of the law, noting that "[a]lthough Mingus represented the dominant approach when it was decided, `the modern direction of policy is to reduce the vulnerability of final judgments to...