Updated

Updated · South Carolina Lawyers Weekly · Jun 18

1st Circuit Limits PIP Bias Claims, Defining 2 Types of Adverse Employment Actions

Updated

Updated · South Carolina Lawyers Weekly · Jun 18

1st Circuit Limits PIP Bias Claims, Defining 2 Types of Adverse Employment Actions

Q: After recent court rulings, can a Performance Improvement Plan ever be just a warning?

Yes. After the Supreme Court’s 2024 decision in *Muldrow v. City of St. Louis* and the 1st Circuit’s 2026 ruling in *Walsh v. HNTB Corp.*, a Performance Improvement Plan can still be just a warning if it functions as documented counseling rather than changing the employee’s job. *Muldrow* broadened what can count as an adverse employment action, holding that an employee need only show they were made “worse off” in the terms or conditions of employment, not that the harm was especially serious. That raised concern that even a PIP might automatically qualify. But *Walsh* drew an important line. The court said a PIP that simply identifies performance problems, sets improvement steps, and offers a chance to correct them is generally not an adverse action. In Walsh’s case, the PIP did not change duties, title, pay, benefits, or advancement prospects, so the court treated it as “nothing more than documented counseling.” A PIP can become legally significant, however, if it does more than warn. Courts are more likely to view it as an adverse action if it imposes new responsibilities, reduces pay or benefits, changes title or status, limits promotion or transfer opportunities, or otherwise leaves the employee worse off at work. The practical takeaway is that a PIP can still be a legitimate warning, but only if it is genuinely corrective, specific, and does not alter employment terms. Whether it crosses the line remains a fact-specific question.

3 articles · Updated · South Carolina Lawyers Weekly · Jun 18

Walsh v. HNTB says a performance improvement plan counts as an adverse employment action only when it changes job terms, such as duties, pay, title or advancement prospects.
The 1st Circuit split PIPs into 2 categories: routine documented counseling aimed at fixing performance, and plans that impose new responsibilities or otherwise leave an employee worse off.
Applying that framework, the court held Joanne Walsh’s PIP was not actionable because it listed deficiencies and improvement steps but did not alter compensation, title or internal promotion opportunities.
The ruling builds on the Supreme Court’s 2024 Muldrow decision, which rejected a requirement that Title VII plaintiffs show a materially significant disadvantage and instead asked whether the employer’s action left them worse off.