Texas Payday Act

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 very much favors employers. The Igal case declares that a final decision by the Texas Workforce Commission ("TWC") denying recovery of wages stops a claimant from later filing a civil lawsuit to receive the same damages.


Under Chapter 61 of the Texas Labor Code, also known as the "Payday Act," an employee can make claims for unpaid wages either with the Texas Workforce Commission in an administrative claim, or in a private lawsuit in a Texas court. The claim deadline to make an administrative Payday Act claim with the TWC 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 opinion in Igal prevents a claimant that made a claim administratively with the Texas Workforce Commission that was too late (e.g. after the 180 deadline) to later file a private claim 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 TWC did not have jurisdiction because Igal made the claim too late. Instead of seeking a rehearing or judicial review of the Texas Workforce Commission's ruling, Igal filed suit against his previous employer in Texas state court seeking the unpaid wages.


The Texas Supreme Court first determined that the Texas Workforce Commission had authority to determine the wage claim (even though the TWC itself claimed it did not).  The court then looked at whether res judicata would prevent Igal’s claim. Res judicata bars the re-litigation of lawsuits that have been finally decided in a previous claim. The Texas Supreme Court determined that res judicata stopped Igal’s lawsuit because the necessary elements were in place: the TWC acted in a judicial capacity when deciding the wage claim and the parties had an opportunity to make their claims through an adversarial process in which the TWC decided contested issues of fact.


The outcome of Igal has made a serious impact on Texans seeking compensation of unpaid wages. In order to get 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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by: Dominic Audino
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Source: Texas Payday Act

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