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The Fiduciary Shield Doctrine and Personal Jurisdiction over Non-resident Employees

Feb 20, 2015

Should an individual who resides in another state be subject to a Texas Court’s jurisdiction for his work done in Texas when his work was done solely on behalf of his employer?

Generally, an out-of-state resident who is working on behalf of an employer would not be individually liable in Texas because of the “fiduciary shield doctrine.”  The “fiduciary shield doctrine” protects nonresident employees from the jurisdiction of Texas courts when all of the employee’s contacts with Texas were made on behalf of his employer.  Nichols v. Tseng Hsiang Lin, 282 S.W.3d 743, 750 (Tex. App.–Dallas 2009, no pet.)  This doctrine is consistent with the Texas Supreme Court’s holding that an out-of-state employee, in his individual capacity, cannot be subject to Texas personal jurisdiction based solely on the activities of his employer.  Siskind v. Villa Found. for Educ., Inc., 642 S.W.2d 434, 437-38 (Tex. 1982).  For example, a Texas court should not exercise personal jurisdiction over a Colorado resident who traveled to a Texas office every few months to conduct business on behalf of his employer.  See Urban v. Barker, 2007 Tex. App. LEXIS 1633, at *21 (Tex. App.–Houston [14th Dist.], March 6, 2007).

The fiduciary shield doctrine does not apply to an officer’s or employee’s tort’s  committed in Texas.  See Ennis v. Losieau, 164 S.W.3d 698, 707 (Tex. App.–Austin 2005, no pet.)  This rule is not based on an exception to the fiduciary shield doctrine, but rather on the well-established principal that "a corporate officer is primarily liable for his own torts."  Morris v. Kohls-York, 164 S.W.3d 686, 695 (Tex. App.–Austin 2005, no pet.).

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