A PIP is not always an adverse action under SCOTUS’ relaxed bias test, court says

Dive Brief:

• Architectural firm HNTB did not discriminate against a former information technology worker on the basis of her age when it placed her on a performance improvement plan, the 1st U.S. Circuit Court of Appeals held March 13.
• The plaintiff in Walsh v. HNTB, a longtime HNTB employee in her mid-50s, successfully completed the PIP but left her job less than a year later. She alleged age discrimination and constructive discharge, claiming that the PIP was an adverse action imposed upon her because of her age. She also claimed that HNTB stopped awarding her pay increases and stripped her of certain job duties.
• A Massachusetts federal district court granted summary judgment to HNTB. The 1st Circuit affirmed, holding that none of the alleged actions met the U.S. Supreme Court’s relaxed proof standard for plaintiffs alleging job discrimination established in 2024’s Muldrow v. City of St. Louis decision.

Dive Insight:

The 1st Circuit noted in its Walsh decision that “there is no one-size-fits-all answer” for the question of whether a PIP qualifies as an adverse employment action under the meaning of federal civil rights laws; “Rather the inquiry is fact-intensive and PIP-specific.”

The court’s analysis included a discussion on the implications of Muldrow. There, SCOTUS held that plaintiffs alleging discrimination under Title VII of the 1964 Civil Rights Act need not prove that they suffered “significant” harm in order to succeed. Rather, such plaintiffs need only show that an employer’s discriminatory conduct left them worse off with respect to the terms and conditions of their employment.

In Walsh, the plaintiff alleged that the presence of a PIP was itself enough to meet the bar established by Muldrow. But the 1st Circuit noted that the plan merely provided the plaintiff an opportunity to correct unsatisfactory performance. It did not lead to reassignment, the loss of a title or pay or any limitation to her ability to seek other opportunities with HNTB.

Instead, the plaintiff claimed that the PIP had been imposed on her because of her age. Even so, she had not shown that the plan altered the terms and conditions of her employment, the court said, adding that the PIP’s reference to the ability of HNTB to terminate her prior to completion of the plan also did not count as such an alteration.

The 1st Circuit also rejected the plaintiff’s other discrimination claims, including that HNTB blocked her from receiving certain pay increases and stripped her of job duties. It held that the plaintiff had to have shown more than “unpleasantness, hurt feelings, and wounded pride” as a result of the PIP in order for her constructive discharge claim to proceed.

The decision may demonstrate some of the limitations of Muldrow, which has previously been described by employer-side attorneys as potentially favoring future plaintiffs.

But federal courts have not always looked favorably upon PIPs. This is particularly the case for plans which contain unfair criteria. For example, the 7th Circuit held in favor of a former Caterpillar employee who alleged that he was fired for unsuccessfully completing an “impossible” PIP which required him to meet deadlines that had already passed before he had seen it.