At JorgensenHR, we help employers stay ahead of legal shifts, not react to them after the fact. And one recent development should absolutely be on your radar.
The U.S. Supreme Court, in Muldrow v. City of St. Louis, fundamentally changed what qualifies as an “adverse employment action” under Title VII.
Previously, employees had to show material harm, something significant like a demotion or pay cut. That standard is gone.
Now? If an employee is left even slightly worse off in their terms or conditions of employment, it may be enough to support a claim.
That’s a major shift and it brings everyday HR decisions under greater scrutiny.
A Real-World Example: When a PIP Is (and Isn’t) a Problem
In Walsh v. HNTB Corp., a long-term IT employee was placed on a Performance Improvement Plan (PIP). She completed it successfully, no demotion, no reduction in pay, no change in title.
She later resigned and filed an age discrimination claim, arguing that the PIP itself was an adverse action.
Under the old standard, the case would have been dismissed immediately.
Under the new Muldrow standard? The court gave it serious consideration.
But ultimately, the employer prevailed.
Why? Because the PIP did not actually change anything meaningful about her job. The court viewed it as what it was intended to be documented counseling, not a punitive employment action.
The Key Takeaway for Employers
At JorgensenHR, here’s how we’re advising our clients:
A PIP is no longer automatically “safe” but it’s not automatically risky either. It all depends on impact.
A PIP may now be considered an adverse action if it:
- Adds more burdensome or unfavorable responsibilities
- Limits promotion, transfer, or growth opportunities
- Impacts compensation, bonuses, or advancement
- Materially changes how the job is performed
In short: if the employee is worse off, even slightly, you may be in the danger zone.
What Smart Employers Should Be Doing Right Now
This is where JorgensenHR partners with organizations to help reduce risk and build defensible HR practices:
- Draft PIPs Like They’ll Be Exhibit A
Because they likely will. Tie every point to objective, documented performance issues. Avoid vague or subjective language. - Be Thoughtful About Consequences
The more a PIP changes duties, expectations, or opportunities, the more it starts to look like an adverse action. - Ensure Consistency Across the Organization
Disparate treatment claims just became easier to bring—and harder to dismiss early. - Train Your Managers
“It’s just a PIP” is no longer a safe mindset. Frontline leaders need to understand the legal and practical implications of their actions.
The Bottom Line
The Supreme Court didn’t eliminate the standard, it lowered the bar.
And as Walsh demonstrates, employers can still prevail but only when their processes are thoughtful, consistent, and well-documented.
How JorgensenHR Can Help
At JorgensenHR, we work with employers to:
- Audit and strengthen performance management processes
- Review current or create new PIP templates to help reduce risk
- Support drafting or reviewing PIP content
- Train managers on risk-aware documentation and communication
- Proactively reduce exposure before issues escalate
If you’d like to review your current PIP practices or conduct a proactive HR audit, let’s connect. info@jorgensenhr.com or 661-600-2071.
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