In Physio GP, Inc. v. Naifeh, the Fourteenth Court of Appeals in Houston held, in a case of first impression, that an individual cannot be held personally liable for a Sabine Pilot cause of action.  A Sabine Pilot or public policy wrongful termination claim is a narrow exception to the general rule of at-will employment in Texas.  A claim may arise when an employee is terminated by his employer solely for refusing to perform an illegal act.  This type of claim was named after the first Texas Supreme Court case to recognize the cause of action.   See Sabine Pilots Serv., Inc. v. Hauck, 687 S.W.2d 733 (Tex. 1985).

In Physio, the plaintiff’s claim arose after her employment was terminated, according to her, for refusing to sign altered patient medical treatment records showing medical services that were never provided and that would have led to higher insurance payments for the employer.  The employer contended that the plaintiff was terminated for various performance infractions, including unauthorized treatment on a patient and misuse of company time.  At trial, the employer and individual defendants elected not to defend the case further due to a lack of resources to pay their attorney.  The trial court conducted a bench trial and found that the plaintiff was terminated for refusing to perform an illegal act and entered judgment against the employer and individual defendants. 

On appeal the individual defendants raised an issue left open by Sabine Pilots and the lower court decisions applying the doctrine –i.e., whether an individual supervisor may be held liable for this type of claim.   The Court of Appeals, in a split decision, held that individual supervisors (absent a finding that the supervisor was the alter ego of the employer) cannot be held personally liable for a Sabine Pilot cause of action.

Majority Opinion Here

Dissenting Opinion Here