Under the Supreme Court’s Muldrew doctrine, any term or condition that could impact or affect the employment opportunities of an employee, even when there are no visible changes to pay or benefits, could possibly lead to discriminatory discharges.  Some harm must still be demonstrated, but plaintiffs are no longer required to prove that the harm was “significant,” “substantial,” or “material.” In effect, the threshold for bringing discrimination claims was lowered.

In the case of Muldrew, an African American woman who was a Police Sargeant in St. Louis transferred from a very high-profile Intelligence department to a regular department.  The transfer had the same pay and title but changed her schedule, overtime opportunities, prestige, and comfort of work clothing (she previously could wear plainclothes but now had to wear a uniform, duty belt, and vest).  There was nothing showing her work performance was lagging, but there was evidence of dislike by her immediate superior.  The Supreme Court held that her job transfer was discriminatory. 

The lowering of the discrimination standard gave rise to a number of new lawsuits.  For example, in Thomas v. JBS Green Bay, Inc., the 7^th Circuit Court of Appeals examined whether allegations of training delays, vacation request denials, and an unwanted shift transfer that made caring for a young child more difficult, constituted an adverse action for purposes of Title VII.  It found it did.  In Johnson v. Nestlé USA, the District Court for the Northern District of Illinois noted that the Seventh Circuit “suggested that placing an employee on probation, in some cases, may constitute a materially adverse employment action.” 

In other like situations, the courts have found that Muldrow does not apply.  In Brody v. Costco Wholesale Corp an employee was offered a night shift position instead of the day shift position. Finding the plaintiff failed to put forth evidence that there was any material difference between the night shift he was offered and the day shift he preferred, the District Court for the Western District of Wisconsin did not find that Muldrow applied. 

As a result, while it may appear that the floodgates have opened for lawsuits involving questionable employment actions, employees must still demonstrate some level of harm in order to survive summary judgment.

In the case of Walsh v. HNTB Corporation, Walsh complained of age discrimination and constructive discharge after receiving a PIP.  Specifically, the issue a Performance Improvement Plan or PIP was placed before the U.S. 1^st Appellate Court of Appeals.  In this situation, the company placed Walsh, a longer term and older employee, on a three-month performance improvement plan (“PIP”) that she successfully completed. About ten months later, Walsh resigned. She then sued HNTB alleging, inter alia, that the company committed unlawful age discrimination, primarily by placing her on the PIP and then constructively discharging her.  She and an another older worker resigned after having a new manager.

"The PIP did not assign Walsh new duties, alter her title or compensation, or limit her ability to seek other opportunities within the company," U.S. Circuit Judge Seth R. Aframe wrote for the panel. "Its only reference to a term of employment was the company's reservation of its right to terminate Walsh's employment before the end of the plan. But Walsh has not argued that she was anything other than an at-will employee before, during, or after the PIP."   She also failed to show any other evidence of harm. 

She did get a new manager who was ultimately harder to work for, more demanding in production, etc.  However, the court did not state that it contributed to a discriminatory or hostile environment. 

This situation was based on age discrimination, which is a “but for” type of discrimination. However, the outcome might have been different if Walsh claimed sex discrimination, which is based on the mosaic of the circumstances. Therefore, HR needs to ensure that when a PIP is used, note any trends and actions that the manager might have taken that would make the PIP suspect.  Contact legal counsel if this situation arises.

Source: Law360 3/16/26, State Bar of Wisconsin 3/5/26