First Circuit Evaluates PIP as Evidence of Age Discrimination

Quick Hits

• In Walsh v. HNTB Corp., a former employee sued an architectural design firm for age discrimination and constructive discharge after it placed her on a performance improvement plan (PIP).
• The First Circuit found that the facts of this case did not meet the standard for an adverse employment action established with the Supreme Court of the United States’ decision in Muldrow v. City of St. Louis.
• While a PIP may be an adverse employment action, if it negatively impacts the terms and conditions of employment, the mere fact of a PIP is not enough.

After a performance review cited some concerns, HNTB Corp. placed an information technology worker on a PIP in 2019, which she successfully completed. She resigned in 2020 at the age of fifty-five and sued for age discrimination and constructive discharge. She said her supervisor told her that she could “be replaced with younger, cheaper people” and that the company was “not getting its return on investment” on her.

The employer argued that it decided to implement the PIP because of performance issues and not as pretext for age discrimination.

On December 21, 2023, the U.S. District Court for the District of Massachusetts ruled in favor of the employer at summary judgment. It reasoned that the plaintiff’s successful completion of the PIP, the absence of demotion or pay reduction, and the lack of substantial changes to her job duties meant she did not suffer an adverse employment action. The court also concluded that the comments and actions by her supervisors did not create intolerable working conditions that would force a reasonable person to resign. The plaintiff appealed.

To make a prima facie age discrimination claim, a plaintiff must demonstrate that he or she was age forty or older, was qualified for the job, and suffered an adverse employment action because of age.

To establish a claim of constructive discharge, a plaintiff must show that working conditions were so intolerable that they rendered a seemingly voluntary resignation a termination.

First Circuit Opinion

The First Circuit analyzed whether, in this case, the PIP qualified as an adverse action under federal antidiscrimination laws. In Muldrow v. City of St. Louis, the Supreme Court of the United States held that employees do not need to demonstrate significant harm to bring a discrimination claim based on an adverse action, such as a job transfer, pay cut, or demotion.

“Sometimes, an employer may issue a PIP to warn an employee about performance deficiencies or assist an employee in developing a plan to achieve an identified opportunity for skill development,” the First Circuit stated. “In those cases, a PIP is not an adverse employment action.”

But other times, “a PIP may impose new job responsibilities, change the present terms of employment, or deprive an employee of potential advancement opportunities,” the First Circuit continued. “In these situations, a PIP may serve as an adverse employment action.”

Therefore, the distinction hinges on the working conditions and the specific details of the PIP. The First Circuit concluded that the plaintiff’s PIP did not negatively affect the terms and conditions of her employment and did not qualify as an adverse employment action. While a loss of job responsibilities can be an adverse employment action, the court determined that did not happen in this case.

Regarding the constructive discharge allegation, the court found that the supervisor’s comments were not enough to demonstrate a work environment so onerous it would compel a reasonable person to resign. It also concluded that there was no evidence that the plaintiff was about to be fired before she resigned.

The First Circuit’s jurisdiction includes Maine, Massachusetts, New Hampshire, Rhode Island, and Puerto Rico.

Next Steps

This case shows that courts will use a fact-intensive and PIP-specific analysis to determine whether a decision to implement a PIP was a discriminatory act. If a PIP results in a change in the terms and conditions of employment, such as reduced hours, reduced pay, loss of job responsibilities, or undesirable assignments or locations, then it may be considered an adverse employment action. The plaintiff’s PIP did not change her job duties, pay, benefits, title, or worksite.

When a PIP is necessary, employers may wish to carefully document their reasons for implementing a PIP and use objective measures of performance in the PIP. Being consistent and fair in applying PIPs may reduce the risk of discrimination claims based on age, gender, or other legally protected characteristics.

Ogletree Deakins will continue to monitor developments and will post updates on the Employment Law, Maine, Massachusetts, New Hampshire, and Rhode Island blogs as additional information becomes available.

Lisa Stephanian Burton is a shareholder in Ogletree Deakins’ Boston office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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