Performance Management: Employer Strategies as PIPs Come under Scrutiny

Takeaways

• The First Circuit held in Walsh that placing an employee on a performance improvement plan (PIP), without more, was not an adverse action even in the wake of Muldrow.
• The decision illustrates that whether an action constitutes an “adverse employment action” remains unsettled.
• The decision also highlights several practical steps employers can take to reduce legal risk by keeping PIPs corrective rather than punitive.

Related links

• Walsh v. HNTB Corp.
• U.S. Supreme Court: Alleging Discriminatory Transfer Is Sufficient Harm to Bring Title VII Claim

Article

Establishing a claim of unlawful discrimination or retaliation in the workplace requires, among other elements, that an employee show they experienced an “adverse employment action.” Since Muldrow v. City of St. Louis, 601 U.S. 346 (2024), where the U.S. Supreme Court held that an employee need not show “significant” harm, but only “some harm,” to establish an adverse employment action, courts and litigants continue to grapple with whether lesser disciplinary measures constitute an adverse employment action sufficient to establish a claim.

In Walsh v. HNTB Corp., No. 23-1499 (Mar. 13, 2026), the U.S. Court of Appeals for the First Circuit offers guidance on whether lesser disciplinary measures, such as placing an employee on a performance improvement plan (PIP), can constitute adverse employment actions. Although the circuit court stopped short of adopting a categorical rule, its analysis underscores that context matters.

The Case

Plaintiff Joanne Walsh worked as an IT employee for HNTB Corporation for more than 25 years until she resigned in September 2020. Ten months prior to her resignation, HNTB placed Walsh on a PIP. The PIP highlighted complaints from Walsh’s coworkers that suggested she might be “an impediment to the success/performance of the office.” The PIP further critiqued her failure to act and improve on issues identified in her previous annual performance review.

The PIP remained in place for three months and outlined specific, actionable improvements tied directly to the identified performance concerns. Two supervisors ultimately concluded that Walsh successfully (albeit narrowly) achieved the goals identified in her PIP by the time of its conclusion.

Following her resignation, Walsh sued HNTB, asserting claims of age discrimination in violation of the Age Discrimination in Employment Act and a Massachusetts anti-discrimination law. In support of these claims, Walsh argued that (among other things) HNTB’s issuance of the PIP constituted an “adverse employment action.” The U.S. District Court for the District of Massachusetts rejected this argument.

First Circuit Opinion

The First Circuit ultimately affirmed the lower court’s finding that Walsh could not establish a discrimination claim based on HNTB’s issuance of a PIP, because the PIP did not constitute an actionable adverse employment action. However, applying Muldrow, the court acknowledged that a PIP could still constitute an adverse employment action under different circumstances.

Walsh had argued that, under Muldrow, a “subjective and vague” PIP, along with unjust criticism of her work, constituted an adverse employment action. The First Circuit disagreed. It held “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 added that the PIP’s 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” and Walsh had not disputed her status as an at-will employee.

The First Circuit’s reasoning in Walsh is therefore likely to inform future discrimination and retaliation claims, including those brought under Title VII of the Civil Rights Act.

Best Practices for Developing PIPs After Walsh

To minimize the risk of discrimination or retaliation claims, employers should ensure PIPs are drafted to provide a genuine opportunity for growth and improvement, rather than to serve as a form of punishment.

Based on the First Circuit’s reasoning in Walsh, a PIP is less likely to be viewed as an “adverse employment action” when employers follow these key best practices:

1. Identify the PIP’s purpose as an “opportunity to correct unsatisfactory performance.” Include language that conveys improvement, not punishment, is the PIP’s goal(s). 
    
2. Specifically outline performance issues. Avoid vague statements. Identify the actual areas needing improvement. Refer to expectations or duties contained in the employee’s job description where possible. 
    
3. Set and clearly communicate measurable expectations. Explain what success looks like and how improvement will be evaluated.
    
4. Keep terms of employment stable. When compensation, title, and core status remain unchanged, a PIP is more likely to be viewed as corrective, rather than punitive.
    
5. Use the PIP as a genuine opportunity to improve, rather than a foregone termination step. The expectations set in a PIP should be attainable and realistic. An employee’s ability to successfully complete a PIP supports the legitimacy of the process.
    

6. Document support and progress. Record check-ins, feedback, and whether expectations were met.

    

For comparison, employers should avoid inclusion of the following in PIPs:

1. Changes to the employee’s job title or position. Changes to an employee’s title, demotion, transfer to another position, or supervisory changes all increase the risk that an employee is perceived as “worse off” due to a PIP. 
    
2. Reduced compensation. A PIP that results in decreased compensation will almost certainly be considered an adverse employment action. 
    
3. Assignment of new or “worse” 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. 
    
4. Ineligibility for other opportunities within the company. A PIP should not directly or indirectly disqualify an employee from future promotions or transfers. It also should not affect an employee’s participation in employee incentive programs.

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If you have questions about preparing a performance improvement plan or other workplace issues, please contact a Jackson Lewis attorney.