Develop, implement PIPs properly to minimize risks of employment-related claims
To prove a claim of work-related discrimination or retaliation, employees must prove they suffered an “adverse employment action.” A recent federal appeals court decision provides employers with guidance about whether disciplinary action less than termination can constitute an adverse employment action. While the court didn’t adopt a clear-cut rule, its analysis can be helpful to employers in creating and issuing performance improvement plans (PIPs).
Longtime employee alleges PIP amounted to adverse action
Joanne Walsh was employed by HNTB for more than 25 years and resigned in September 2020. Almost 10 months before her resignation, she was placed on a PIP that addressed coworker complaints against her, some of which indicated she could be “an impediment to the success/performance of the office.” The PIP also emphasized her failure to improve her work performance, which had been the subject of her prior performance review.
Walsh’s PIP was set for three months and provided guidance on what her employer’s performance expectations were moving forward. At the end of the three-month period, two of her supervisors concluded she had barely met the expectations.
After her voluntary resignation, Walsh filed a lawsuit alleging age discrimination in violation of the federal Age Discrimination in Employment Act (ADEA) and Massachusetts antidiscrimination law. In support of her claims, she alleged the PIP amounted to an adverse action. The U.S. District Court for the District of Massachusetts rejected her argument and dismissed her case, so she appealed to the U.S. 1st Circuit Court of Appeals.
A PIP could be an adverse action, even though this one wasn’t
The 1st Circuit also rejected Walsh’s argument that she suffered an adverse employment action under the facts presented, but it did acknowledge that a PIP could be considered an adverse employment action under the right set of facts.
Walsh argued that her unclear and subjective PIP—together with unfounded critiques of her work—established it was an adverse employment action. The 1st Circuit disagreed, finding the PIP didn’t assign new duties, limit her ability to obtain other positions or opportunities within the company, or negatively affect her job title or compensation. Also, she didn’t dispute her status as an at-will employee, meaning her employer was free to terminate her at any time and for any reason, with or without cause or notice. Walsh v. HNTB Corp., No. 24-1499, (1st Cir., 2026).
Employer best practices
The 1st Circuit’s reasoning is likely to be considered by other courts, including those in Oklahoma, in determining whether PIPs support future discrimination and retaliation claims, including those filed under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), or the ADEA.
To reduce the risk of discrimination or retaliation claims, you should ensure PIPs are carefully drafted to provide a genuine opportunity for improvement rather than serve as a form of punishment.
Based on the 1st Circuit’s guidance in Walsh, a PIP is less likely to be viewed as an “adverse employment action” if you follow these best practices:
· Articulate that the PIP’s purpose is an opportunity to correct unsatisfactory performance or behavior. Also, be clear that the PIP’s goal is successful improvement, not punishment.
· Clearly communicate measurable expectations. Explain what the expectations are and how improvement will be determined.
· Don’t alter employment status in areas like compensation, benefits, duties, or title. Otherwise, it supports an argument that the PIP is intended to punish rather than correct. If discipline is intended to be part of the PIP, that should be clear but could be an adverse employment action.
· Performance deficiencies should be clearly articulated. Avoid unclear or indefinite statements regarding expected improvement, and provide specific examples of the problems and ways to correct them. Use job requirements or policies from your employee handbook, performance evaluations, or job descriptions when possible.
· Demonstrate that the PIP’s purpose is to help the employee improve and isn’t just another part of the disciplinary process. The successful completion of a PIP is evidence of the legitimate, nondiscriminatory process to help employees improve. The expectations described in the PIP should be attainable, realistic, and consistent with expectations for other employees.
· Create evidence of employee support, review, and progress through the PIP period. For example, thoroughly document meetings, one-on-ones, and other interactions with the employee during the period provided in the PIP. Remember, if the PIP ends up in litigation, management will only remember what’s clearly documented.
· Train supervisors and managers how to properly create, implement, and monitor PIPs and how to appropriately communicate with employees regarding their purposes and expectations.
Employer ‘don’ts’ when administering PIPs
Managers, supervisors, and HR professionals should avoid the following when administering PIPs:
· Failing to gain senior management and HR approval and support in implementing and navigating the PIP process. Consistency and fairness are touchstones of excellent performance management practices.
· Making negative changes to the employee’s job title or position. Changes to a job title, position, pay band, or level during the PIP period substantially increases the risk that a court will find the employee was adversely affected as a result of the PIP.
· Reducing an employee’s compensation or benefits. A PIP that results in decreased compensation, benefits, hours, or status will almost certainly be considered an adverse employment action.
· Transferring the employee to worse or new job duties. A PIP that changes existing expectations, creates new obligations, or limits work to less desirable tasks could be considered an adverse employment action.
· Making the employee ineligible for other opportunities within the organization. A PIP shouldn’t disqualify the employee from future promotions or transfers. It also shouldn’t negatively affect the employee’s participation in incentive or benefit programs.
