Last Updated on July 23, 2026 by MyHRConcierge

Performance Improvement Plans (PIPs) are a common tool for addressing performance concerns and helping employees meet workplace expectations. But when an employee later brings a discrimination or retaliation claim, employers may face an important question: Can a PIP itself be considered an adverse employment action?

A recent decision from the U.S. Court of Appeals for the First Circuit offers valuable guidance. While the court declined to establish a bright-line rule that PIPs are- or are not- adverse employment actions, it identified factors employers should consider when developing and administering performance improvement plans.

The Case: Employee Challenges Performance Improvement Plan

Joanne Walsh worked for HNTB Corporation for more than 25 years before voluntarily resigning in September 2020. Approximately 10 months before her resignation, HNTB placed her on a three-month Performance Improvement Plan after receiving complaints from coworkers and documenting ongoing performance concerns that had also been addressed during her prior performance review.

The PIP outlined the company’s performance expectations, identified areas requiring improvement and established a three-month period for Walsh to demonstrate progress. At the conclusion of the plan, two supervisors determined that she had only minimally met the stated expectations.

After resigning, Walsh filed suit alleging age discrimination under the federal Age Discrimination in Employment Act of 1967 (ADEA) and Massachusetts anti-discrimination law. She argued that the PIP itself constituted an adverse employment action- an essential element of her discrimination claim.

The U.S. District Court for the District of Massachusetts dismissed her claims, and Walsh appealed to the U.S. Court of Appeals for the First Circuit.

The First Circuit’s Decision

In Walsh v. HNTB Corp., No. 24-1499 (1st Cir. 2026), the First Circuit affirmed the lower court’s decision, concluding that Walsh’s Performance Improvement Plan did not constitute an adverse employment action under the facts of the case.

In reaching its decision, the court emphasized several important factors:

• The PIP did not reduce Walsh’s pay or benefits.
• Her job title, position and employment status remained unchanged.
• She was not assigned different or less desirable job duties.
• The court found no evidence that the PIP limited her ability to pursue other positions or opportunities within the company.
• The court also noted that Walsh did not dispute her status as an at-will employee, meaning HNTB retained the ability to terminate her employment with or without cause under applicable law.

Although Walsh argued that the PIP contained subjective expectations and unfair criticism, the court concluded those allegations alone were insufficient to establish a materially adverse change in the terms or conditions of her employment.

Importantly, however, the First Circuit did not hold that a Performance Improvement Plan can never qualify as an adverse employment action. Instead, the court acknowledged that under different circumstances, a PIP could support such a claim if it materially affects an employee’s employment

Why This Decision Matters

The decision reinforces an important principle for employers: a properly administered Performance Improvement Plan should function as a performance management tool- not as punishment.

The First Circuit’s reasoning suggests that a PIP focused on documenting performance concerns, establishing objective expectations and providing a meaningful opportunity for improvement is less likely to be viewed as an adverse employment action when it does not materially change the employee’s terms or conditions of employment.

Conversely, if a PIP is accompanied by reductions in compensation, changes in job status, less favorable assignments or limitations on advancement opportunities, a court is more likely to conclude that the employee experienced a materially adverse employment action.

Although Walsh arose under the ADEA, the court’s discussion of adverse employment actions may also be persuasive in cases involving Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), and other employment discrimination laws that apply similar legal standards.

Best Practices for Performance Improvement Plans

A thoughtfully designed PIP can demonstrate an employer’s commitment to employee development while creating clear documentation of legitimate performance concerns.

Consider the following best practices:

• Clearly State the Purpose: Explain that the PIP is intended to help the employee correct performance or behavioral concerns-not to punish them. Make clear that successful completion of the plan is the desired outcome.
• Set Objective, Measurable Expectations: Clearly define the performance expectations, timelines, and measurable criteria that will be used to evaluate improvement. Employees should understand exactly what is expected of them.
• Document Performance Deficiencies: Describe specific performance issues and reference prior evaluations, job descriptions, workplace policies, or employee handbook provisions whenever possible. Avoid vague or generalized criticism.
• Avoid Changing Employment Terms: Unless separate disciplinary action is warranted, avoid making changes to compensation, benefits, job title, reporting relationships, or primary job duties while the employee is on a PIP.
• Provide Meaningful Support: Schedule regular check-ins, coaching sessions, and opportunities for feedback throughout the improvement period. Demonstrating a genuine effort to help the employee succeed strengthens the legitimacy of the process.
• Keep Thorough Documentation: Document meetings, coaching conversations, employee responses, progress updates and follow-up discussions throughout the PIP period. If litigation arises, contemporaneous documentation often becomes one of an employer’s strongest pieces of evidence.
• Train Supervisors and Managers: Managers should understand how to consistently create, communicate, and administer Performance Improvement Plans. Consistent implementation across the organization helps reduce claims of unfair treatment.

Common Mistakes to Avoid

Certain practices may increase the likelihood that a PIP will be viewed as an adverse employment action or evidence of discriminatory treatment.

Employers should avoid:

• Reducing an employee’s pay, benefits, bonuses or scheduled hours during the PIP period.
• Changing an employee’s job title, position or pay grade without a legitimate business reason.
• Assigning significantly less desirable or substantially different job responsibilities.
• Automatically making employees ineligible for promotions, transfers, incentive programs or other advancement opportunities solely because they are participating in a PIP.
• Using vague, subjective or unattainable performance expectations.
• Treating the PIP as a predetermined path to termination rather than a genuine opportunity for improvement.
• Implementing PIPs without HR involvement or consistent management oversight.

Beyond the Bench Takeaway

The First Circuit’s decision in Walsh v. HNTB Corp. underscores that a Performance Improvement Plan is not automatically considered an adverse employment action. Instead, courts will examine whether the PIP materially changed the employee’s compensation, job duties, status, or other terms and conditions of employment.

For employers, the takeaway is clear: Performance Improvement Plans should be carefully drafted, consistently administered and focused on employee development. By setting objective expectations, documenting performance concerns, providing meaningful support and avoiding unnecessary changes to an employee’s job status, organizations can strengthen both their performance management practices and their legal position should those decisions later be challenged.

For more information on how to enhance your organization’s compliance efforts, contact MyHRConcierge at 855-538-6947, sales@myhrconcierge.com. Or, schedule a convenient consultation below: