The opinion
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-97-00790-CV
Retama Development Corporation and Retama Park Management
Company, L.C., Appellants
v.
Texas Workforce Commission and Jimmy W. Brown, Appellees
FROM THE DISTRICT COURT OF MILAM COUNTY, 20TH JUDICIAL DISTRICT
NO. 25,047, HONORABLE CHARLES E. LANCE, JUDGE PRESIDING
Appellants, the Retama Development Corporation and Retama Park Management
Company, L.C. (collectively "Retama Park") appeal the district court's grant of summary
judgment in favor of appellees, the Texas Workforce Commission ("TWC") and Jimmy W.
Brown. Retama Park challenges the TWC's ruling that unemployment benefits awarded to Mr.
Brown following his layoff from Retama Park 's employment are chargeable to Retama Park's
employer account, arguing that its account is protected by section 204.022(a)(2) of the Texas
Unemployment Compensation Act . That section provides that unemployment benefits may not
be charged to the account of an employer if the employee's last separation from employment was
required by a state statute or a municipal ordinance. The issue presented is whether the
termination of Mr. Brown's employment was required by statute. Because we agree with the
TWC and the district court that it was not, we will affirm the district court's decision.
FACTUAL AND PROCEDURAL BACKGROUND
In 1995, Retama Park operated a licensed race track in Selma, Texas, where it
conducted live horse races in accordance with the Texas Racing Act and the rules of the Texas
Racing Commission ("Racing Commission"). (1) Pursuant to its regulations and in accordance with
the Texas Racing Act, the Racing Commission established live race dates for Retama Park in
November and December of 1995, with the season's final race scheduled for December 3.
Retama Park was required to hold live races on the dates set by the Racing Commission. (2)
However, on November 21, Retama Park asked the Racing Commission to end Retama Park's
racing season two weeks early by canceling its six remaining live race dates. The Racing
Commission granted Retama Park's request the same day.
On November 22, Retama Park laid off Jimmy Brown, who had been employed
for the racing season as a security guard. Mr. Brown filed a claim for unemployment benefits
with the Texas Employment Commission, the agency now known as the Texas Workforce
Commission ("TWC"). The TWC granted Mr. Brown unemployment benefits and ruled that
Retama Park's employer account would be charged. Retama Park challenged the charge back,
arguing that Mr. Brown's termination was "required by statute" under the meaning of section
204.022(a)(2) of the Texas Unemployment Compensation Act ("TUCA"). See Tex. Lab. Code
Ann. §§ 201-217 (West 1996 & Supp. 1998). After making findings of fact and conclusions of
law, the appeal tribunal upheld the TWC's decision. (3) Retama Park next sought appellate review
at the highest level within the TWC, which adopted the appeal tribunal's findings of fact and
conclusions of law and affirmed the determination of a charge back to Retama Park's account.
Retama Park challenged the agency's decision by filing an original petition for
judicial review. See Tex. Lab. Code Ann. § 212.201 (West 1996). Both parties moved for
summary judgment, agreeing that there are no disputed facts. The district court denied Retama
Park's motion and granted the TWC's motion. Retama Park brings this appeal from that final
decision , complaining that the district court erred by granting summary judgment in favor of the
TWC and by denying summary judgment in favor of Retama Park.
STANDARD OF REVIEW
Appellate review of a summary judgment requires the reviewing court to determine
whether the movant has shown that no genuine issue of material fact exists and that it is entitled
to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Nixon v. Mr. Property Management
Co., 690 S.W.2d 546, 548 (Tex. 1985). Here, both parties agree that the material facts are
undisputed and that summary judgment is appropriate. When both parties move for summary
judgment and the trial court grants one motion and denies the other, the appellate court should
determine all questions presented. See Jones v. Strauss, 745 S.W.2d 898, 900 (Tex. 1988). In
this case, the legal question presented is whether Jimmy Brown's discharge was required by
statute as intended by TUCA section 204.022(a)(2).
DISCUSSION
Appellants argue that the district court should have granted summary judgment in
their favor because Retama Park's employer account was protected from charge back by TUCA
section 204.022(a)(2). That section provides that unemployment benefits may not be charged to
the account of an employer if the employee's last separation from employment was "required by
a statute of this state or an ordinance of a municipality of this state." Tex. Lab. Code Ann.
§ 204.022 (a)(2) (West 1996 & Supp. 1998). The crux of appellants' theory is that Retama Park's
account should not be charged back because Mr. Brown's termination was "required by statute"
when the Racing Commission ended Retama Park's racing season. Retama Park argues that horse
racing is such a highly regulated industry that every act is done pursuant to statute, and that acts
done pursuant to statutory authority are "required by statute." We reject Retama Park's assertion
that every act done pursuant to statutory authority qualifies for charge-back protection under
TUCA section 204.022(a)(2).
The TWC determined that an employee's termination is "required by statute" when
the termination or layoff occurs pursuant to an agency's statutorily mandated act, but not when
the act or order is discretionary. Where the language of a statute is unambiguous, courts must
seek the intention of the legislature as found in the plain meaning of the words used. Memorial
Hospital--The Woodlands v. McCown, 927 S.W.2d 1, 4 (Tex. 1996). Whether a statutory
provision is ambiguous is a question of law. See State v. Shoppers World, Inc., 380 S.W.2d 107,
110 (Tex. 1964). We hold that TUCA section 204.022(a)(2) unambiguously specifies that unless
a state statute or municipal ordinance requires an employee's termination, charge-back protection
is unavailable to the employer. While a statute requires the Racing Commission's approval for
the early termination of the racing season, no statute in this case addresses the termination of
racetrack employees. Since no statute or ordinance required the termination of Jimmy Brown's
employment, Retama Park's account is not protected by TUPA section 204.022(a)(2).
We agree with appellants that whether an agency's order is mandatory or
discretionary is not determinative in invoking the charge-back protection of section 204.022(a)(2).
While we reject this distinction on which the agency relied, we nevertheless affirm the TWC's
ruling. Courts are not bound by an administrative agency's legal theory provided there is a valid
basis for the agency action. See Railroad Comm'n of Tex. v. City of Austin, 524 S.W.2d 262, 279
(Tex. 1975). Because Mr. Brown's discharge was not required by statute, section 204.022(a)(2)
charge-back protection is not available to Retama Park. The TWC's ruling has a valid basis, and
the district court correctly granted summary judgment in the TWC's favor.
Appellants attempt to bolster their argument that the Racing Commission's order
approving Retama Park's request to terminate its racing season two weeks early was "required
by statute" by claiming that orders of an administrative agency should be considered as legislative
acts. In support of this theory, appellants cite Texas Liquor Control Board v. Attic Club, Inc.,
457 S.W.2d 41 (Tex. 1970). However, the Attic Club court stated that a rule or order
promulgated by an administrative agency acting within its delegated authority should be
considered under the same principles as if it were the act of the Legislature. Id. at 45 . Attic Club
does not advance appellants' argument because the Racing Commission's order approving Retama
Park's request for an early termination was not a promulgated rule in any sense.
As the appeal tribunal determined in its findings of fact, Retama Park sought to
have the remainder of its 1995 racing season canceled due to economic downturn. Appellants
apparently concede this point, having stated both in their summary judgment motion and again on
appeal that the material facts in this case are undisputed. Retama Park's situation is no different
from that of any other employer that discharges employees during an economic downturn; having
laid off an employee for its own economic benefit, the employer cannot claim that its account is
immune to charge back of the employee's unemployment benefits. At oral argument, counsel for
appellants repeatedly urged that Retama Park's situation is unique simply because horse racing
is a highly regulated industry. We reject this interpretation of the unambiguous text of section
204.022(a)(2), which applies only if an employee's termination was "required by a statute of this
state," not if it indirectly accompanies statutorily required regulation.
We also address Retama Park's complaint that the TWC acted arbitrarily and
capriciously in failing to follow its own precedent. In support of their argument, appellants point
to Appeal No. 93-004252-10M-012194 in the TWC's Appeals Policy and Precedent Manual. In
that case, the employees were laid off at the end of the regularly scheduled racing season; the
TWC held that section 204.022 protected the employer racetrack's account from charge back.
The TWC did not act arbitrarily and capriciously by failing to apply the same rule in this
situation; one prior decision, distinguishable on the facts, does not establish controlling precedent.
The appeal tribunal based its distinction on the undisputed fact that Retama Park
had asked the Racing Commission to end its racing season two weeks early, whereas in the prior
case, the employer racetrack discharged its employees at the end of the regularly scheduled racing
season. The fact that Retama Park asked the Racing Commission to put an early end to its racing
season constitutes a valid distinction between the two cases. The TWC did not act arbitrarily and
capriciously in refusing to follow a single previous decision when the facts are distinguishable.
Furthermore, we today reject the legal principle underlying the previous agency ruling in the
TWC policy manual by holding that a termination must be required by statute to invoke the
protection of section 204.022(a)(2).
The cases appellants cite as establishing the " arbitrary and capricious" standard for
agency conduct further indicate that the TWC's ruling did not violate this standard. Appellants
correctly note that Gulf Land Co. v. Atlantic Refining Co. establishes that an administrative agency
must follow its own rules and regulations. See Gulf Land Co., 131 S.W.2d 73, 79 (Tex. 1939).
However, that case is inapposite because the TWC's ruling denying charge-back protection to
Retama Park did not violate any of the TWC's rules or regulations. A ppellants also cite Public
Utility Commission v. Gulf States Utilities Co. in support of their claim that the TWC is bound
by its own interpretation of a prior precedent. See Gulf States , 809 S.W.2d 201 (Tex. 1991).
Gulf States does require an agency to follow the clear, unambiguous language of its own
regulations. Id. at 207 . However , the opinion does not address the extent to which an agency
is bound by its own contested-case precedent. Appellants have failed to explain how the TWC's
act of validly distinguishing precedent amounts to disobedience of an agency regulation. Neither
Gulf States nor Gulf Land Co. supports appellants' position.
CONCLUSION
TUCA section 204.022(a)(2) protects an employer's account from charge back
when an employee's discharge is required by statute. Since no statute required Retama Park to
discharge Jimmy Brown, the TWC has shown that it is entitled to judgment as a matter of law.
The district court did not err in granting the TWC's motion for summary judgment and in denying
Retama Park's summary-judgment motion. Therefore, we overrule appellants' single point of
error and affirm the district court's judgment upholding the agency order charging unemployment
benefits to the account of Retama Park.
__________________________________________
Bea Ann Smith, Justice
Before Justices Powers, Kidd and B. A. Smith
Affirmed
Filed: June 4, 1998
Publish
1. See Tex. Rev. Civ. Stat. Ann. art. 179e, § 8.01 (West Supp. 1998); 16 Tex. Admin. Code
§ 303 (1997).
2. Racing Commission Rule 303.41(a) provides: "An association shall conduct pari-mutuel
racing on each date granted [by the Racing Commission] . . . unless the association receives the
prior approval of the executive secretary." 16 Tex. Admin. Code § 303.41 (d) (1997).
3. Either the claimant or the employer may appeal a determination of the TWC examiner to an
appeal tribunal established by the Commission and composed of a salaried examiner. Tex. Lab.
Code Ann. §§ 212.053 , .101 (West 1996) . The appeal tribunal affirms or modifies the
determination after giving the parties "reasonable opportunity for fair hearing." Id. § 212.102.
The TWC may permit any party to further appeal the tribunal's decision. Id. § 212.151.
d that section 204.022 protected the employer racetrack's account from charge back.
The TWC did not act arbitrarily and capriciously by failing to apply the same rule in this
situation; one prior decision, distinguishable on the facts, does not establish controlling precedent.
The appeal tribunal based its distinction on the undisputed fact that Retama Park
had asked the Racing Commission to end its racing season two weeks early, whereas in the prior
case, the employer racetrack discharged its employees at the end of the regularly scheduled racing
season. The fact that Retama Park asked the Racing Commission to put an early end to its racing
season constitutes a valid distinction between the two cases. The TWC did not act arbitrarily and
capriciously in refusing to follow a single previous decision when the facts are distinguishable.
Furthermore, we today reject the legal principle underlying the previous agency ruling in the
TWC policy manual by holding that a termination must be required by statute to invoke the
protection of section 204.022(a)(2).
The cases appellants cite as establishing the " arbitrary and capricious" standard for
agency conduct further indicate that the TWC's ruling did not violate this standard. Appellants
correctly note that Gulf Land Co. v. Atlantic Refining Co. establishes that an administrative agency
must follow its own rules and regulations. See Gulf Land Co., 131 S.W.2d 73, 79 (Tex. 1939).
However, that case is inapposite because the TWC's ruling denying charge-back protection to
Retama Park did not violate any of the TWC's rules or regulations. A ppellants also cite Public
Utility Commission v. Gulf States Utilities Co. in support of their claim that the TWC is bound
by its own interpretation of a prior precedent. See Gulf States , 809 S.W.2d 201 (Tex. 1991).
Gulf States does require an agency to follow the clear, unambiguous language of its own
regulations. Id. at 207 .