03-31-2026
The First Circuit Court of Appeals ruled that a performance improvement plan is not necessarily an adverse employment action for the purposes of establishing a discrimination claim.
Joanne Walsh was a 54-year-old IT employee at HTNB Corporation. In August 2019, HTNB placed Walsh on a performance improvement plan. Walsh successfully met the terms of her PIP. She resigned about a year later and filed an age discrimination lawsuit. She alleged HTNB discriminated against her based on her age by placing her on a PIP, causing her to resign. She argued it was an adverse employment action based on the U.S. Supreme Court’s decision in Muldrow v. City of St. Louis. In that case, the court held that employees need not show a “material” change or disadvantage to meet the “adverse action” requirement for a discrimination claim.
The First Circuit Court of Appeals stated that an employee must show that they were “worse off” with respect to the terms or conditions of their employment. Walsh’s PIP did not appear to impact her negatively. She did not experience a change in job duties, title, or compensation. She could still seek other opportunities within the company. The court noted that a reasonable person may experience distress from being placed on a PIP. Still, the employee must show how the PIP negatively altered her terms or conditions of employment. Some PIPs “may impose new job responsibilities, change the present terms of employment, or deprive an employee of potential advancement opportunities.” In those circumstances, a PIP may be an adverse employment action. The circuit court stated that “there is no one-size-fits-all answer for whether a PIP constitutes an adverse employment action.” Each case presents its own set of facts that must be assessed.
Takeaways: Courts will evaluate each PIP to assess whether it constitutes an adverse employment action for discrimination claims. Absent an impact on the employee’s job duties, pay, benefits, title, or ability to seek other positions, PIPs may not meet the threshold of an adverse employment action.