Is Placing an Employee on a Performance Improvement Plan an Adverse Employment Action for Purposes of a Discrimination Claim?

By Geoffrey A. Lindley

To make out a Title VII discrimination claim, an [employee] must show some harm respecting an identifiable term or condition of employment.

Muldrow v. City of St. Louis, 601 U.S. 346, 355 (2024).

To establish a prima facie case of discrimination, an employee:

must show that (1) he or she was a member of a protected class; (2) he or she suffered an adverse employment action; (3) he or she was qualified for the position; and (4) he or she was replaced by someone outside the protected class or was treated differently than similarly-situated, non-protected employees.

Wright v. Murray Guard, Inc., 455 F.3d 702, 707 (6th Cir. 2006) (emphasis added).

But What is An Adverse Employment Action?

For years courts described an adverse employment action in the context of a Title VII discrimination claim as any material or significant change to the terms and conditions of employment. See Muldrow v. City of St. Louis, 601 U.S. 346, 355 (2024); See also Walsh v. HNTB Corp., 169 F.4th 330, 339 (1st. Cir 2026). However, as noted above, the United States Supreme Court recently clarified what constitutes an adverse employment action in the context of a discrimination claim in the Muldrow case.

In Muldrow, the Supreme Court pointed out that the statutory language of Title VII of the Civil Rights Act of 1964 prohibits “‘discriminat[ing] against’ an individual ‘with respect to’ the ‘terms [or] conditions’ of employment because of that individual’s [protected status, i.e., race, sex, religion, etc.]”. 601 U.S. at 354. In reviewing this language, the Supreme Court recognized that nowhere does the statute require that an employee claiming discrimination show a “material” or “significant” change in the terms and conditions of employment. Therefore, the Court held that “an adverse action is any employment event, regardless of its severity, in which an employer's conduct leaves an employee (1) ‘worse off’ (2) with respect to the ‘terms [or] conditions’ of their employment.” Walsh, 169 F.4th at 339 (quoting Muldrow, 601 U.S. at 354-55).

An Involuntary Performance Improvement Plan Leads to Litigation

Performance Improvement Plan and Resignation

Joanne Walsh worked for HNTB Corporation as an information technology (IT) employee out of its Boston, Massachusetts office from January 1994 until September 2020. Walsh v. HNTB Corp., 169 F.4th at 334, 336. In 2018, Walsh’s new supervisor, Jim Clark, wrote in her performance review that she "[m]et [e]xpectations" but noted that her rating was "at the lowest in the range." Clark further noted that Walsh lacked "initiative to stretch beyond the day-to-day and status quo of the Boston area offices" and that she did not "improve upon any of the necessary HNTB characteristics" identified in her review from the previous year. Clark concluded that Walsh was “at risk of not meeting expectations [which] may result in a performance improvement plan." Id.

Thereafter, on August 1, 2019, HNTB placed Walsh and her slightly older co-worker, Lindsay Allinson, on nearly identical performance improvement plans. Walsh’s performance improvement plan (PIP) stated as follows.

• There had been "[r]ecent feedback from office staff [and] office/division leadership [stating] that [Walsh] ma[de] it difficult to get things done [and was] perceived to be an impediment to the success/performance of the office."
• In particular, the PIP noted that the office perceived Walsh as "contentious, pushing back on suggestions/ideas and unwilling to look for solutions before saying something can't be done."
• The PIP also indicated that Walsh "'hid[] ' in the IT room," was "reluctant to engage with employees proactively," and "d[idn't] adequately represent the customer service focus that is critical to the success of a Technology Support Representative at HNTB."
• In addition to these concerns, the PIP criticized Walsh for not properly maintaining the IT office, which made it difficult for other employees to "access IT resources."
• The PIP concluded its critique by noting that Walsh had failed "to act on and improve the performance issues identified in [her] 201[8] Performance Review," including that she "stretch beyond the status quo to meet performance expectations."
• “The PIP lasted three months and provided a list of necessary performance improvements that correlated to the criticisms just described.”

169 F.4th at 336-37.

Walsh’s PIP ended on November 1, 2019. Although Walsh successfully completed the PIP, Clark told her that she “had barely improved enough to get off the PIP.” 169 F. 4th at 337.

Sometime after November 1, Walsh’s team leader, Dan Vealey, replaced Clark as Walsh’s supervisor and wrote the following about Walsh in her 2019 performance evaluation.

• Walsh "[i]nconsistently [m]et [e]xpectations" and that 2019 was "a somewhat turbulent year" for Walsh with "some mixed results."
• Walsh "performed the normal daily activities as consistently as she ha[d] in the past" and that "[h]er technical skills [were] very solid."

169 F. 4th at 337.

After her PIP, Walsh believed that her working conditions deteriorated. 169 F. 4th at 337. For example, according to Walsh, Vealey would take credit for her and Allinson’s work, would blame them when projects went “sideways”, micromanaged their communication to employees who made technology-related requests, and would pressure them to work faster than necessary. Id. at 337-38. Walsh and Allinson both resigned on September 11, 2020, about ten months after completing the PIP. Id. at 338.

However, from the time that she completed her PIP until her resignation, Walsh did not complain to human resources or submit a concern to the company’s hotline. The company did not demote her or reduce her compensation. And no one with the company asked her to quit. Id. at 338.

Employee Sues, but District Court Dismisses the Case

Thereafter, Walsh filed suit against HNTB under the Age Discrimination in Employment Act (ADEA) and comparable state law claiming that she was discriminated against and forced to resign because of her age. The United States district court dismissed the case granting HNTB’s motion for summary judgment. Id. at 338. In doing so, the court determined that Walsh had not suffered an adverse employment action as she was neither demoted nor lost pay. Id. Further, any changes in her job responsibilities or supervision were de minimis, and Walsh provided no proof that the company was considering terminating her prior to her voluntary resignation. Id.

Does Placing an Employee on a PIP Constitute an Adverse Employment Action?

Walsh appealed the district court’s decision to the United States Court of Appeals for the First Circuit. The First Circuit applied the new adverse employment action standard from Muldrow, noting that the ADEA uses the same or similar language as Title VII with regard to employment discrimination. Id. at 339-340. In addressing whether a PIP is an adverse employment action, the First Circuit stated as follows.

A PIP does not have the same effect in every employment situation. Sometimes, an employer may issue a PIP to warn an employee about performance deficiencies or assist an employee in developing a plan to achieve an identified opportunity for skill development. . . . In those cases, a PIP is not an adverse employment action. . . . Other times, a PIP may impose new job responsibilities, change the present terms of employment, or deprive an employee of potential advancement opportunities. . . . In these situations, a PIP may serve as an adverse employment action. . . . Post-Muldrow, then, there is no one-size-fits-all answer for whether a PIP constitutes an adverse employment action. Rather, the inquiry is fact intensive and PIP-specific.

169 F. 4th at 340-41 (internal citations and parentheticals omitted).

The First Circuit then looked to the undisputed facts to determine if the PIP at issue affected Walsh’s terms and conditions of employment. For the following reasons, the court determined that it did not.

• The clear written purpose of the PIP was to provide Walsh with "the opportunity to correct [her] unsatisfactory performance.”
• The PIP delineated several employment issues and corresponding ways for Walsh to improve in those areas. It also encouraged Walsh to "be more proactive" and serve as an "advocate" for the offices she supported.
• It noted that Walsh’s office was in such disorder that it made "it difficult for employees to access IT resources." Therefore, she was required to clean her work area.
• Importantly, the PIP did not provide Walsh with new duties, change her job title, alter her compensation, or limit her ability to advance within the company. The PIP did reserve the company’s right to terminate Walsh before the expiration of the PIP.

The First Circuit affirmed the district court’s dismissal of Walsh’s claim.

Employer Takeaways

Whether a PIP is an adverse employment action depends on what an employer is trying to accomplish with the PIP. Is the employer using the PIP to address performance issues while providing a structured opportunity to correct those issues? If so, then the employer should ensure that the PIP clearly outlines the employee’s deficiencies and provides ways that the employee can address those deficiencies along with metrics by which the employee’s performance will be objectively measured during the existence of the PIP. The PIP should also clearly state the time frame for the PIP.

However, if the PIP assigns new job duties, changes the employee’s usual performance metrics, removes responsibilities, places the employee on probation, alters the employee’s compensation, or worsens the employee’s terms and conditions of employment in some way, then the PIP will most likely be considered and adverse employment action. (Of course, that does not necessarily mean that the PIP is unlawful discrimination. As noted above, an adverse employment action is but one element in an employee’s prima facie case of discrimination. And even if an employee establishes a prima facie case, an employer still has an opportunity to show that it took adverse action for a legitimate, non-discriminatory reason.)

Taking adverse employment action, through a PIP or otherwise, is justified in certain circumstances. Nevertheless, it is prudent for employers to know when a PIP crosses the line and becomes adverse employment action. And the Walsh case provides helpful guidance in making such a determination.