If you have hiring and firing responsibilities, you may worry from time to time whether you could be held personally liable for your decisions. Now a Texas appeals court has answered that question—at least in situations involving the firing of someone who refuses to engage in an act she believes is illegal.
The court said there is no personal liability.
Recent case: Natalie Naifeh worked at a physical therapy clinic owned by a corporation controlled by Tanja and Shawn Saadat. Naifeh claimed she was fired after she refused to sign off on reimbursement claims she thought were inflated and fraudulent. The clinic claimed she was fired for other work-related reasons.
Naifeh sued the owners directly, alleging they were personally liable for wrongful discharge.
The court disagreed and explained some Texas employment law basics. First, it said that Texas is an at-will employment state, meaning that employment can be terminated by either party at any time for any legal reason. The only common-law exception is that an employer can’t fire anyone for refusing to perform an illegal act. It noted that the Texas Supreme Court has ruled that it is against good public policy to make employees choose between their jobs or potential criminal charges.
But the court also said that only the employer can hire or fire an employee—not the individuals who own the company. Therefore, it reasoned, those owners can’t be held personally liable for the company’s decision to fire an employee. (Physio v. Naifeh, No. 14-08-00017, Court of Appeals of Texas, 14th District, 2010)
Final note: Some federal laws such as the Fair Labor Standards Act and the have been found to make managers—including HR professionals—personally liable for some firings. Consult your attorney if wage-and-hour or FMLA issues are involved.
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