First Circuit: A PIP Does Not Necessarily Constitute an Adverse Employment Action

In a win for employers, the First Circuit in Walsh v. HNTB Corporation has offered welcome clarity on the reach of the Supreme Court’s “some harm” standard as it relates to performance improvement plans. We discuss the decision below and look forward to exploring it further – along with other important employment law issues – at our upcoming 2026 Mintz Employment Law Summit.

The Supreme Court States That Employees Need Only Show “Some Harm” to Demonstrate an Adverse Employment Action.

As a refresher, in Muldrow (which we discussed here), the Supreme Court rejected the long-applied requirement that employees show a “materially significant disadvantage” or “significant detrimental effect” to demonstrate an adverse employment action. Instead, the Court held that an employee need only show “some harm respecting an identifiable term or condition of employment.” As the Court explained, to “discriminate against” an employee simply “means treat worse” – with no heightened threshold of harm required. Since Muldrow, courts across the country have been applying this lower standard to everyday workplace actions. 

The First Circuit Holds That There is No Bright Line Rule That Delivering a Performance Improvement Plan to an Employee Results in Some Harm.

In Walsh, the First Circuit (which covers Maine, Massachusetts, New Hampshire, Puerto Rico, and Rhode Island) addressed how the “some harm” standard applies to PIPs. The Court drew a careful distinction between two categories – those PIPs issued “to warn an employee about performance deficiencies or assist an employee in developing a plan to achieve an identified opportunity for skill development” which are not adverse employment actions, even under Muldrow, and those PIPs that “impose new job responsibilities, change the present terms of employment, or deprive an employee of potential advancement opportunities” which may constitute an adverse employment action.

Applying this framework, the Court found that the PIP at issue fell squarely within the first category. The PIP’s stated purpose was to give the employee “the opportunity to correct [her] unsatisfactory performance.” It identified problem areas and outlined ways to improve, but did not assign new duties, alter compensation or title, or restrict internal mobility. While the PIP reserved the employer’s right to terminate the employee before its conclusion, the Court noted that the employee was at-will before, during, and after the PIP – meaning that reservation did not change any term or condition of her employment. In the Court’s view, the PIP amounted to nothing more than “documented counseling.”

Key Takeaways for Employers

The Walsh decision affirms that thoughtful, well-documented performance management remains a viable and defensible employment practice. It also offers a roadmap for employers navigating Muldrow’s “some harm” standard – notably, that employers should design PIPs to improve performance – not to alter job terms. A PIP that assigns new duties, changes in compensation or title, or limits advancement opportunities may constitute an adverse employment action. But a PIP focused on giving the employee “the opportunity to correct . . . unsatisfactory performance” – without changing terms and conditions of employment – is more likely to be viewed as non-actionable “documented counseling.” Employers should clearly state this purpose in the PIP and ensure it is reflected in how they communicate and implement the plan, and more generally, in light of Walsh and Muldrow, employers would be well-advised to review their existing PIP templates and update them accordingly.

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