A PIP Is Not Always Discriminatory Under SCOTUS’ Relaxed Bias Test, Court Says

Why It Matters

The ruling clarifies employer liability for PIPs, signaling that plaintiffs must show concrete employment detriments, not merely discomfort, to succeed under the newer bias standard. This guidance will shape how companies design and document performance plans to mitigate litigation risk.

Key Takeaways

• 1st Circuit says PIP not automatically adverse action
• Muldrow’s relaxed proof standard applied to age discrimination claim
• Plaintiff failed to show changed terms or conditions
• Courts still scrutinize PIPs with unfair criteria
• Employers should document performance reasons for PIPs

Pulse Analysis

Performance improvement plans have become a common managerial tool, but their legal status remains nuanced. The Supreme Court’s 2024 Muldrow decision lowered the evidentiary bar for discrimination plaintiffs, allowing claims to proceed without proving "significant" harm. Yet Muldrow also emphasized that the plaintiff must demonstrate an adverse impact on employment terms. This balance forces courts to examine each PIP on its facts, assessing whether the plan merely offers corrective guidance or effectively reshapes compensation, duties, or job security.

In the 1st Circuit’s Walsh ruling, the court applied Muldrow’s framework and concluded that HNTB’s PIP did not alter the employee’s conditions of employment. The judge noted that the plan provided an opportunity to improve performance without imposing a demotion, pay cut, or restricted mobility. Because the plaintiff could not link the PIP to a tangible change in her role or earnings, the court deemed the claim insufficient. This fact‑intensive approach signals to litigants that emotional discomfort or perceived bias alone will not satisfy the adverse‑action threshold under Title VII.

The decision also reverberates beyond the First Circuit. Other jurisdictions, such as the 7th Circuit, have taken a harsher view of PIPs that embed impossible targets, suggesting that fairness and transparency remain critical. Employers should therefore craft PIPs with clear, measurable objectives, document performance discussions, and avoid language that could be interpreted as punitive. As courts continue to refine the application of Muldrow, proactive compliance and thorough record‑keeping will be essential to defend against discrimination lawsuits.