CEO Placed by Staffing Firm Immune from Liability

CEO Placed by Staffing Firm Immune from Liability

A Texas appeals court has recently found in favor of a staffing firm employee who had been assigned to a state hospital as its CEO and administrator, indicating that he was entitled to immunity from liability for acts that fell within the scope of his employment at the hospital and that were performed in good faith. The court held that even though the staffing firm employee was not a full time employee of the state hospital, he was entitled to the same treatment as those employed directly by the state and therefore immune from lawsuits and liability.

The issue revolved around an incident involving a physician who performed a sinus surgery on a patient. When that patient subsequently died, the CEO was tasked with overseeing an investigation into the patient’s death and the conduct of the operating physician. The physician resigned during the investigation and then sued the CEO and the hospital. Allegations included conspiracy to damage his professional practice and reputation. He also filed breach of contract, defamation, conspiracy and other claims which the CEO sought to have dismissed.

The CEO’s legal representatives argued that he was immune from liability as a hospital employee, while the physician argued that he was actually an employee of the staffing firm that placed him and could therefore not be protected from immunity afforded employees of state entities. The trial court sided with the plaintiff, but the case was appealed by the hospital CEO.
The court of appeals then reversed the decision, noting that immunity extends to a private party who acts as an official fulfilling statutorily mandated functions pursuant to a contract with a government entity.