While framed as a tool to encourage improvement, PIPs may serve as a precursor to further discipline or dismissal. In an employment law context, a Performance Improvement Plan (PIP) is a formal, written document employers use to address an employee’s perceived performance deficiencies; a PIP typically details specific shortcomings, sets measurable improvement goals, provides resources or support, and warns of consequences—such as termination—if the employee fails to meet expectations.
PIPs have featured prominently in discrimination cases resulting in substantial damages, though almost always as part of a broader pretextual ‘series of events’ leading to termination or constructive discharge rather than as a standalone adverse action that results in the award of damages in a lawsuit. Post-Muldrow, where the Court lowered the threshold of ‘harm’ an employee has to show to back up a claim, PIP lawsuits are indeed viable. However, success of the case still turns on proving the PIP was weaponized (unrealistic/impossible goals, selective enforcement, sudden shift after strong performance) because of a protected characteristic such as sex, race, age, national origin or other protected class under discrimination law.
A Look at Cases Involving Alleged Retaliation Involving PIP
A perfect example is playing out in a case (Beard v. IBM) involving a minority executive and top sales performer who for over a decade, exceeded quotas, earned performance awards, and closed massive deals for the company. However, the employee alleges things started to go south after his involvement in a race discrimination lawsuit and his trial testimony in a related case. He claims his company stripped him of his best accounts, making it near impossible to meet quota, and subsequently put him on PIP in what he alleges was a precursor for termination in retaliation for a protected activity (the previous discrimination lawsuit). The plaintiff is seeking back/front, unpaid commissions on six figures, emotional damages, and more. The case is ongoing.
In another case resulting in a massive jury verdict involving performance plans/PIP (Harris v. FedEx), a high performing minority employee alleged that after she complained about racial discrimination, she was subsequently issued disciplinary letters and required to create and operate under performance improvement plans tied to lagging team sales. Termination soon followed. Although the jury did not find race discrimination, they awarded the plaintiff over a million in compensatory damages and $365 million in punitive damages for retaliation, in which the PIP documentation played a central role. As it turns out, the timing of the PIP supported her allegation that that the PIP was used pretextually after her protected complaint.
Contact Our Experienced Employment Termination Attorneys
PIP’s by themselves are usually not a cause for a lawsuit unless it escalates to firing/resignation, especially following a protected activity. In those cases courts may treat a PIP as strong evidence of pretext. Juries have awarded (and appeals courts have largely upheld) multi-million-dollar verdicts or forced significant settlements in these sketchy scenarios, although outcomes are fact specific. When you have been terminated from your job, or driven out, and feel that the treatment you received was retaliatory based on protected activity or discriminatory based on a protected characteristic, it is important to seek legal guidance. Contact the employment law offices of Alan C. Olson & Associates for immediate assistance.
