Texas Payday Act
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by: Dominic Audino
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The Texas Supreme Court's decision in Igal v. Brightstar Information Technology Group, Inc. may hinder employees' ability to be paid under the Texas Payday Act. The Court's ruling strongly favors employers. The Igal case declares that a final decision by the Texas Workforce Commission ("TWC") denying recovery of wages stops an employee from subsequently filing a civil lawsuit to receive the same damages.
Under Chapter 61 of the Texas Labor Code, also known as the "Payday Act," a claimant may open claims for unpaid wages either with the Texas Workforce Commission in an administrative claim, or in a private lawsuit in a Texas court. The filing deadline to make an administrative Payday Act claim with the Texas Workforce Commission is 180 days after the date the wages became due. The deadline, or statute of limitations, for filing a lawsuit under the Payday Act in a Texas court is two years after the date the wages became due.
In Igal, the claimant did not file the Payday Act claim with the TWC within the 180-day deadline. The Texas Supreme Court's decision in Igal stops an employee that made a claim administratively with the TWC that was too late (e.g. after the 180 deadline) to later file a civil lawsuit in a Texas court, even when it is filed within the two year statute of limitations.
In Igal, the TWC determined that Igal’s claim failed on the merits and that the Texas Workforce Commission lacked the ability to rule on the merits because Igal made the claim too late. Instead of seeking a rehearing or judicial review of the TWC's decision, Igal filed suit against his former employer in Texas state court for the unpaid wages.
The Texas Supreme Court first found that the Texas Workforce Commission had authority to determine the wage claim (even though the Texas Workforce Commission itself determined it did not). The court then examined whether res judicata should prevent Igal’s claim. Res judicata prevents the re-litigation of claims that have been finally adjudicated in a previous action. The Texas Supreme Court decided that res judicata barred Igal’s claim because the required elements were present: the Texas Workforce Commission acted in a judicial capacity when determining the wage claim and the parties had an opportunity to litigate their claims through an adversarial process in which the Texas Workforce Commission decided disputed issues of fact.
The outcome of Igal has made a serious impact on Texans seeking payment of unpaid wages. In order to obtain unpaid wages under the Texas Payday Act, employees must be careful not to take actions that could permanently prevent future recovery of the wages.
Contact Austin Employment Lawyers Dominic Audino and Andrew Traub for a free consultation on the Texas Payday Act or employment discrimination in the workplace.
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