Tuesday, August 9, 2011

3rd Circuit: Performance Improvement Plan Not an Adverse Action

When employees receive poor performance reviews, employers will often give them an opportunity to redeem themselves. Of course, it's only fair to provide employees with a plan for reaching acceptable performance standards. In HR terminology, this is often referred to as a Performance Improvement Plan or "PIP,"

To state a claim for discrimination under most legal theories and employment discrimination statutes, the employee must have experienced an "adverse employment action." The Supreme Court has recognized hiring, firing, failing to promote, reassignment with different responsibilities, and changes in benefits as adverse actions. But what about PIPs?

The Third Circuit recently answered that question in an unpublished opinion in Reynolds v. Dept. of Army, No. 10-3600 (June 22, 2011). In short: No, PIPs are not adverse employment actions. More specifically:
A PIP differs significantly from the types of employment actions that qualify as adverse . . . . PIPs are typically comprised of directives relating to an employee’s preexisting responsibilities. In other words, far from working a change in employment status, a PIP is a method of conveying to an employee the ways in which that employee can better perform the duties that he or she already has. We note that a likely consequence of allowing suits to proceed on the basis of a PIP would be more naked claims of discrimination and greater frustration for employers seeking to improve employees’ performance. Thus, because [Plaintiff] failed to demonstrate that his PIP was accompanied by an adverse change in the conditions of his employment, we hold that [Plaintiff's] placement on the PIP did not qualify as an adverse employment action.
The Third Circuit joins the Seventh, Eighth, and Tenth Circuits in holding that PIPs are not adverse employment actions for purposes of employment discrimination claims.

HT Maria Danaher, Employment Law Matters: Performance Improvement Plan (PIP) is not an "adverse employment action" for purposes of federal anti-discrimination laws, including a copy of the opinion.

Image: Public domain work of federal government; Not official use or endorsed by federal court.

Posted by Philip Miles, an attorney with McQuaide Blasko in State College, Pennsylvania in the firm's civil litigation and labor and employment law practice groups.