Workers can’t contest poor ratings under proposed rules - Blaw

Workers can’t contest poor ratings under proposed rules - Blaw

Supreme Court Ruling Expands Grounds for Challenging Performance Reviews as Discriminatory

The U.S. Supreme Court’s 2024 decision in Muldrow v. City of St. Louis has reshaped the legal landscape for employment discrimination claims, enabling workers to contest performance improvement plans (PIPs) and negative evaluations as adverse actions under anti-bias laws. The ruling lowered the threshold for proving discrimination, requiring employees to demonstrate only “some harm” to their employment terms—not necessarily significant or economic harm.

This shift has sparked a surge in lawsuits against employers, including Amazon and United Airlines, where plaintiffs allege bias in performance management processes. Courts are now grappling with whether actions like placing an employee on a PIP or issuing an unfavorable review qualify as adverse employment decisions under anti-bias laws.

The Tenth and Seventh U.S. Circuit Courts of Appeals are among those set to rule on pending cases, potentially clarifying the scope of the Muldrow standard. For instance, the Seventh Circuit is reviewing an age bias claim by a former United Airlines employee, who alleges retaliation after being placed on a PIP. Similarly, the Tenth Circuit is examining whether mandatory referrals to employee assistance programs could constitute adverse actions under the ADA.

Employers argue that the broad interpretation of “adverse action” could incentivize frivolous lawsuits and disrupt operational decision-making. Critics warn that even routine performance management tools—such as coaching plans or goal-setting sessions— might now be weaponized in discrimination claims. However, legal experts emphasize that plaintiffs still face high burdens to prove bias, particularly when relying on indirect evidence. For example, a 2024 Fifth Circuit ruling upheld a school district’s dismissal of an age discrimination claim after a teacher failed to demonstrate bias over poor performance.

The Muldrow decision has also reignited debates about employer liability. Attorneys stress that performance management systems must align with legitimate, non-discriminatory business goals. Delays in implementing PIPs or using them as a pretext for termination could heighten legal risks.

As courts refine the application of the “some harm” standard, the outcome will likely influence how companies structure performance evaluations and address underperformance. For now, the ruling underscores the growing legal scrutiny of workplace practices that may disproportionately affect protected groups.

According to Bloomberg Law: Justices’ New Bias Test Puts Performance Reviews in Legal Bind (April 2024).