In Flores v. Employees Ret. Sys. of Tex., 74 S.W.3d 532 (Tex. App.--Austin 2002, pet. denied), the Board of Trustees for the Employees Retirement System of Texas denied Flores's application for occupational disability benefits based upon a policy that it adopted in a resolution several months after Flores's hearing. 74 S.W.3d at 544.
The Court concluded that the post-hearing actions of the Board were arbitrary and capricious. Id. at 545.
The Court noted that, although administrative agencies are not bound to follow their decisions in contested case hearings in the same way that courts are bound, that courts "frequently require that an agency explain its reasoning when it 'appears to the reviewing court that an agency has departed from its earlier administrative policy or there exists an apparent inconsistency in agency determinations.'" Id. at 544-45.
Citing due process concerns, the Court further noted that had Flores known about the change in policy, "she might have presented her case differently." Id. at 545.
"For a hearing to be meaningful, the parties must be able to present evidence on the issues to be decided." Id.