First Circuit Rejects Per Se Rule that Performance Improvement Plans Automatically Qualify as Adverse Employment Actions

This month, in Walsh v. HNTB Corporation, the U.S. Court of Appeals for the First Circuit affirmed a district court finding that placing an employee on a performance improvement plan (PIP), by itself, does not rise to the level of a per se legally redressable “adverse employment action” under federal anti-discrimination laws. 

While the decision in Walsh explains that the inquiry “is fact-intensive and PIP-specific,” it offers guidance for determining how a PIP can be implemented without constituting an “adverse action.” 

Brief Background

The plaintiff worked several years for the defendant as an information technology employee. In August 2019, the company placed the plaintiff on a three-month PIP, which she successfully completed. Almost a year later, she resigned. 

The plaintiff then brought suit under the Age Discrimination in Employment Act (ADEA), alleging that the company had discriminated against her based on her age by placing her on a PIP, and that this ultimately forced her constructive discharge.

The Court’s Decision

The U.S. District Court for the District of Massachusetts sided with the defendant, granting its motion for summary judgment and holding that the PIP at issue did not constitute an adverse employment action. The plaintiff appealed, relying heavily on the Supreme Court’s 2024 decision Muldrow v. City of St. Louis. In Muldrow, the Court held that Title VII does not impose a “heightened threshold of harm,” and that an employee need not show a “material” change or disadvantage to establish the element of an adverse action. Relying on Muldrow, plaintiff argued that placing her on a PIP was sufficient to show cognizable harm. 

The First Circuit rejected the plaintiff’s plea for a per se rule, explaining that – even post-Muldrow – an aggrieved employee must show they were “worse off” with respect to the terms or conditions of their employment. In the plaintiff’s case, the court was unpersuaded that placement on a PIP negatively affected her. The court noted that the PIP did not assign new duties, alter the plaintiff’s title or compensation, or limit her ability to seek opportunities within the company. In short, the court determined that the PIP was nothing more than “documented counseling.” While the court acknowledged that an objectively reasonable person may experience distress from being placed on a PIP, a plaintiff must, in addition, show that the PIP somehow negatively altered her employment conditions or terms. 

A “Fact-intensive and PIP-specific” Inquiry

Rejecting the plaintiff’s contention that all PIPs constitute adverse employment actions, the First Circuit explained that “there is no one-size-fits-all answer for whether a PIP constitutes an adverse employment action.” Examining the particulars of plaintiff’s situation to determine whether the terms or conditions of her employment were adversely affected, the court considered that the PIP did not reassign or alter plaintiff’s job duties, title, or compensation, and it did not act as a barrier to her ability to advance within the organization. 

The First Circuit contrasted a post-Muldrow decision from the Seventh Circuit in 2025, with a district court decision from the Southern District of New York in 2024.The Seventh Circuit decided a PIP was not an adverse action “where any changes caused by the PIP were ‘within the normal scope of [the plaintiff’s] employment and thus did not adversely affect the terms and conditions of her employment.'” Where an employer issues a PIP to alert or warn an employee about performance deficiencies or to assist the employee in developing a plan to improve in their role, the PIP cannot be considered adverse. In contrast the New York district court concluded that placement on a PIP qualified as an adverse action because “it saddl[ed] [the plaintiff] with more and worse tasks, tarnish[ed] her permanent record, dampen[ed] her prospects of a promotion or raise, [and] temporarily prevent[ed] her from transferring.”

Demonstrating the fact-specific nature of the inquiry, the First Circuit said the language of the particular PIP showed that its express purpose was to provide plaintiff with “the opportunity to correct [her] unsatisfactory performance.” The court pointed out that the PIP “identified several problem areas and provided a corresponding list of ways to improve.” 

Looking Ahead

Placing an employee on a PIP that is genuinely geared towards performance improvement can be a helpful tool for both employer and employee. Maintaining the terms and conditions of employment unchanged during a PIP reduces the likelihood that placement on the PIP, by itself, will be found to constitute an adverse employment action. Conversely, altering an employee’s duties as part of the PIP, or barring the employee from advancement opportunities as a consequence of the PIP, would make it more likely that the PIP would be found an adverse action under Muldrow. When implementing a PIP, it is advisable for employers to ensure its language clearly expresses its remedial purpose while avoiding any negative impact on the terms and conditions of employment.