First Circuit: PIP Not Categorially An Adverse Employment Action

Putting an employee on a performance improvement plan (PIP) that did not alter the terms or conditions of her employment was not an adverse employment action that could form the basis of her Age Discrimination in Employment Act (ADEA) claim, the First U.S. Circuit Court of Appeals held.

Joanne Walsh worked for over two decades as an information technology employee for HNTB Corporation. In August 2019, she was placed on a three-month PIP, which she successfully completed.

Roughly ten months later, she resigned and then sued, alleging that she was subjected to unlawful age discrimination when she was placed on the PIP and then constructively discharged.

The district court granted summary judgment to HNTB, and Walsh appealed.

Applying the U.S. Supreme Court’s recently enacted standard in Muldrow v. City of St. Louis, the First Circuit affirmed.

In Muldrow, the justices rejected a materiality requirement and held that an adverse action is any employment event, regardless of its severity, in which an employer’s conduct leaves an employee “worse off” with respect to the “terms or conditions” of their employment.

The First Circuit refused to establish a categorical rule that all PIPs constitute adverse employment actions.

“A PIP does not have the same effect in every employment situation,” the court wrote.

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,” the court explained.

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,” the court said. “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.”

Examining the particulars of Walsh’s PIP to determine whether it affected the terms and conditions of her employment, the court said it did not.

“The PIP identified its purpose as providing Walsh with ‘the opportunity to correct [her] unsatisfactory performance,’” the court wrote. “It then identified several problem areas and provided a corresponding list of ways to improve.”

But the PIP did not assign Walsh new duties, alter her title or compensation or limit her ability to seek other opportunities within the company, the court noted. Its only reference to a term of employment was the company’s reservation of its right to terminate Walsh’s employment before the end of the plan.

“[E]ven accepting for argument’s sake that Walsh’s PIP was motivated by age bias, and recognizing an objectively reasonable person may well experience distress from being placed on a PIP, Walsh still has not shown how it altered her employment conditions, which is the focus of our analysis post-Muldrow,” the court said. “The PIP’s imposition therefore does not qualify in these circumstances as actionable conduct under the ADEA or [state law].”

The other incidents that Walsh identified as adverse actions—that she stopped receiving pay raises during her final three years of employment and that she was stripped of various job duties—failed, as Walsh was ineligible for a pay raise because she had reached the top of the salary range for her position, and she never identified the job duties that she lost.

Nor was the court persuaded that Walsh suffered an adverse action through a constructive discharge.

The standard is based on objective reasonableness and is rigorous, the court emphasized—“an employee is not guaranteed ‘a workplace free from the usual ebb and flow of power relations and inter-office politics,’ and must endure the ‘ordinary slings and arrows that workers routinely encounter in a hard, cold world.’”

“Ultimately, the record shows that Walsh was a long-tenured and generally successful HNTB employee who was dismayed that the company placed her on a PIP in 2019,” the court concluded. “Walsh views that decision as a step in HNTB’s age-motivated scheme to push her out. But for Walsh’s constructive discharge claim to proceed to trial, she must show more than ‘unpleasantness, hurt feelings, and wounded pride.’”

The court affirmed summary judgment in favor of the employer.

To read the opinion in Walsh v. HNTB Corporation, click .

Why it matters: The First Circuit took an employer-friendly approach to its application of the Muldrow standard, holding that the use of a PIP does not categorically constitute an adverse employment action. Instead, the court established a “fact-intensive and PIP-specific” analysis of whether the PIP at issue leaves an employee “worse off” with respect to the “terms and conditions” of their employment.