The U.S. Supreme Court case of Muldrow, its progeny, and whether a PIP is now “harm”

Employees tend to view a Performance Improvement Plan (“PIP”) as code for “pack your bags.” PIP’s tend to be viewed as the Human Resource Department building a file against an employee and not as a way for the employee to keep his or her job.  

At least, that was the word on the street until the case of Walsh v. HNTB Corp., 708 F. Supp. 3d 92, 2023 U.S. Dist. LEXIS 227384, was issued.  Walsh is an early look at how federal courts are interpreting Muldrow v. City of St. Louis, 601 U.S. 346, 144 S. Ct. 967, 218 L. Ed. 2d 322, 2024 U.S. LEXIS 1816, 30 Fla. L. Weekly Fed. S 119. 

Let’s take a quick step back. Muldrow is a Supreme Court opinion from 2024, wherein the SCOTUS established a new standard for discrimination claims under Title VII. Where the old standard required an employee prove that they suffered “significant” harm as a result of alleged discrimination or harassment, the Muldrow standard merely requires that an employee prove that an employer’s discriminatory conduct made the terms and conditions of their employment worse than before. 

In plain English, the Muldrow standard made discrimination easier to prove for employees, as the standard decreased from “significant harm” to just “harm.” Since Muldrow, legal scholars and public policy wonks alike have been eagerly awaiting the first progeny of cases to find out just how relaxed this new “harm” standard would really be. Would the “chicken-littles” be right – would Muldrow usher in a new era of lay-up discrimination claims that would devastate the employment landscape of America?

We’re not too proud to admit we were holding our breath ourselves, but we’re here from the other side, and we’re happy to report that that the sky isn’t falling after all. With Walsh, we have proof that Title VII still has appreciable evidentiary standards, even after Muldrow. 

Which brings us back to where we started: PIP’s. 

In Walsh, the plaintiff filed suit under Title VII alleging, among other things, age discrimination. The plaintiff’s theory was shaky from the start, because while the plaintiff (age 55) was indeed replaced by a “younger” employee, that employee was 53-years-old. Moreover, the plaintiff wasn’t even fired” per se, but instead argued for constructive termination. The plaintiff forged ahead with litigation nonetheless, thanks to what she believed to be her “smoking gun” evidence: roughly one entire year prior to her alleged constructive termination, the plaintiff was placed on a PIP by her employer. GASP!

The plaintiff’s putative ace-in-the-hole was that, after a series of negative performance reviews, she was placed on a PIP. Ninety days later, she was congratulated on her successful completion of the PIP, and returned to her previous position and rate of pay. And… that’s it. That’s the “discrimination.” 

Now, you’re probably thinking that this case never had a chance in the first place, right? Well, if common sense dictated American jurisprudence, you’d be right (and we’d be out of a job!). But under this new Muldrow regime, the plaintiff’s attorneys apparently figured it was worth a shot, and who could blame them? Under Muldrow, who’s to say that the inconvenience and humiliation of a PIP didn’t constitute “harm?”  United States District Judge Nathaniel M. Gorton, as it turns out. 

Judge Gorton wrote “[T]he evidence establishes that plaintiff's remedial PIP period ended more than 10 months before she resigned. The lapse of time between the bulk of the disparaging comments made to her and the date of her resignation seriously impairs her claim. That plaintiff successfully completed the remedial process with her job intact also suggests that her job security was not immediately threatened.” After some additional cursory analysis, the Court granted the defendant’s Motion for Summary Judgement. 

So, what does Walsh mean for you and for your business? Nothing but good news! First, it means that Muldrow has not opened the door for previously frivolous claims, as we initially feared. And second, it means that we now have caselaw firmly and explicitly stating that PIP’s are not intrinsically “harmful,” nor “adverse workplace actions” per se. Now, that’s not to say that a PIP could never be a pretext for an unlawful termination, but Walsh does definitively reject the notion that a PIP – in and of itself – is in any way discriminatory. 

At the Sensenig Law Firm, we believe an employee should never be surprised that their performance is lacking.  A PIP gives the employee an opportunity to learn what needs to be corrected.  Employees don’t always take criticism in a positive way and many start job searching immediately, but if they don’t belong with you, the end result of a poorly performing employee leaving on their own accord is a good thing.