May 27, 2026 | Posted By: Emma Doull

If you manage employees, you have probably used a Performance Improvement Plan at some point, or at least considered one. A PIP can be a constructive tool when an employee is struggling, giving them clear expectations and a defined path forward. But PIPs can also become the centerpiece of a discrimination or retaliation lawsuit if they are not handled carefully.

A recent decision from the U.S. Court of Appeals for the First Circuit, Walsh v. HNTB Corporation, sheds useful light on when a PIP crosses the line into “adverse employment action” territory, and what employers can do to stay on the right side of that line.

What Is an Adverse Employment Action, and Why Does It Matter?

To succeed on a claim of workplace discrimination or retaliation under federal laws like Title VII of the Civil Rights Act, the Age Discrimination in Employment Act (ADEA), or the Americans with Disabilities Act (ADA), an employee generally must show that he or she suffered an “adverse employment action.” Termination is the clearest example. But courts have long wrestled with whether lesser forms of discipline, including PIPs, can also qualify.

The answer, as Walsh illustrates, is: it depends on the facts.

What Happened in Walsh v. HNTB Corporation

Joanne Walsh was a longtime HNTB employee with more than 25 years of service. About 10 months before she voluntarily resigned in September 2020, her employer placed her on a three-month PIP. The PIP addressed complaints from coworkers, noted prior performance concerns, and outlined expectations for her going forward. At the end of the PIP period, her supervisors concluded she had barely met the stated expectations.

After her resignation, Walsh filed suit alleging age discrimination under the ADEA and Massachusetts state law. She argued the PIP itself was an adverse employment action. The district court disagreed and dismissed the case. The First Circuit Court of Appeals affirmed.

The appeals court found that Walsh’s PIP did not assign her new duties, limit her ability to seek other positions or opportunities within the company, or negatively affect her title or compensation. She also did not dispute that she was an at-will employee, meaning HNTB could have terminated her at any time with or without cause.

Importantly, the court did not say a PIP can never constitute an adverse action. It left the door open, acknowledging that the right set of facts could lead to a different result. That nuance matters for employers.

When a PIP Becomes an Adverse Action

Based on the First Circuit’s reasoning in Walsh, and consistent with how courts across the country analyze similar claims, a PIP is more likely to be treated as an adverse employment action when it:

Negatively affects the employee’s compensation, benefits, job title, or responsibilities.
Makes the employee ineligible for promotions, transfers, or other internal opportunities.
Is vague, subjective, or obviously designed to set the employee up to fail rather than to provide a genuine opportunity for improvement.
Is issued in close proximity to the employee raising a concern, filing a complaint, or exercising a protected right, which raises the inference of retaliation.
Employers managing employees with exposure to discrimination or retaliation should be especially careful about how PIPs are structured and timed.

Best Practices for Drafting and Administering PIPs

Well-designed PIPs reduce legal risk and, more importantly, give employees a fair shot at improving. Here is what the Walsh decision, and sound HR practice, suggest employers should do:

State the purpose clearly. The PIP should say directly that its goal is to help the employee correct deficiencies and meet expectations, not to punish. Clarity of purpose protects the employer and sets a professional tone.
Use measurable, objective expectations. Vague standards like “improve your attitude” or “be a better team player” are difficult to evaluate and easy t“ challenge. Tie expec”atio“s to specific, document”d job requirements, and explain how improvement will be assessed.
Do not change the employee’s compensation, title, or duties during the PIP. Negative changes to any of these while a PIP is in effect will significantly increase the risk that a court views the PIP as punitive rather than corrective.
Ground performance concerns in prior documentation. Where possible, connect the PIP to prior performance reviews, written warnings, or specific incidents. Reference the employer’s employee handbook, job descriptions, or written policies.
Set attainable goals. The expectations in a PIP should be realistic and consistent with what the employer expects of other employees in similar roles. A PIP calibrated to ensure failure can support an inference of discriminatory or retaliatory intent.
Document throughout the process. Hold regular check-ins, record what was discussed, and note both progress and continued deficiencies. If the PIP eventually leads to termination or litigation, thorough documentation is the employer’s best defense.
Train supervisors. Managers and HR professionals should understand how to create, implement, and communicate PIPs. Consistency across the organization reflects good faith and reduces the risk of disparate treatment claims.

What Employers Should Avoid

Some practices can quickly turn a legitimate PIP into a legal liability:

Skipping senior management or HR sign-off. PIPs should not be unilateral decisions made by a single supervisor. Oversight promotes consistency and fairness, both of which matter in litigation.
Making the employee ineligible for other opportunities. A PIP cannot function as a blacklist. If it effectively disqualifies someone from promotions or transfers, it starts to look like punishment.
Reducing pay or cutting hours. Any PIP that results in decreased compensation, reduced hours, or a diminished status is likely to be treated as an adverse employment action, full stop.
Using the PIP as a rubber stamp for a predetermined termination. Courts and juries can tell when a PIP is a formality designed to create paperwork before a foregone conclusion. If the decision to terminate has effectively already been made, the PIP will not protect the employer.

A Note for Employees

If you are an employee who has recently been placed on a PIP, the Walsh decision does not mean you have no legal recourse. If the PIP changed your job duties, cut your pay, stripped your title, or came on the heels of a complaint you made about discrimination or workplace harassment, it may well constitute an adverse action. Timing and context matter enormously.

The question of whether a PIP rises to the level of an adverse employment action is highly fact-specific, and the law in this area continues to evolve. If you believe a PIP is being used against you unfairly or in connection with discrimination or retaliation, speaking with an employment attorney is a wise first step.

Speak with an Employment Attorney

Whether you are an employer working to protect your organization from discrimination and retaliation claims or an employee who believes a PIP or other disciplinary action has been used unfairly against you, Hoyer Law Group can help.

This blog is for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified attorney.

Are Performance Improvement Plans Adverse Employment Actions? What Employers Need to Know