The Legal Elements of a Performance Improvement Plan

What is a Performance Improvement Plan?

A Performance Improvement Plan (PIP) lays out a change or list of changes an employee should work on so that he or she might improve their job performance. It also details the consequences if the employee does not make those changes. A PIP usually lasts about four months but might be longer or shorter depending on the issues at hand and the employer’s determinations for the plan.
Performance improvement plans are often used in employment cases to show that the employee was first provided with a realistic opportunity to improve before the employer had a legitimate reason to terminate the employee. When an employer fires a worker because of "poor performance," an employment lawyer will want to know if the employer has tried to provide the worker with an opportunity to improve. If it has, it likely weakens the case .
During the PIP period, an employee may be offered training or other assistance to address the concerns. The employer usually provides regular feedback to the employee on performance issues. At the conclusion of the PIP, the employee is still subject to termination if there has not been adequate improvement. A PIP also might require the employee to amend any conduct which was deemed inappropriate. What may start as a chance may end up being the proverbial last chance.
Although a performance improvement plan is a legitimate business tool, it may be used by an employer to cover for its unlawful termination by pretending to offer the employee help, providing only bare minimum assistance if any, and then terminating the employee regardless of likely continued success or failure to correct the issues.

PIP Legal Considerations

As an employer, what are the legal requirements when it comes to implementing a performance improvement plan? There are no federal laws that specifically govern the PIP process. However, any PIP must be free of prohibited employment discrimination based on race, color, religion, national origin, sex, age disability, sex or sexual harassment. It is also important to document thoroughly in case a PIP is misperceived as discrimination by that employee in the future. State and city laws may have additional requirements based on their "at-will" employment doctrine. Guidelines may also differ amongst private companies. Sticking to a PIP process can help avoid unforeseen lawsuits.

Legal Landmines in Performance Improvement Plans

When an employee provides unsatisfactory performance and the employer has decided to use a performance plan to address and develop those unsatisfactory areas, the following legal pitfalls should also be kept in mind when that employee is a protected group member.
Discrimination While this issue is not unique to performance improvement plans, it certainly applies with vigor to any action that’s viewed as adverse to an employee that is protected under federal or state law. Thus, any plan or process that’s used to address performance issues must be applied liberally across all employees. That means managers must be clear about the standards and requirements for any job so that all employees can be held to the same performance expectations.
For instance, when using performance plans, managers should be trained to keep in mind that employees from minority groups tend to be assessed more harshly than their white counterparts. Employers also need to make sure they have a therapist or psychologist readily available to assist managers when dysfunction in the workplace occurs. Employees from minority groups are more subject to unreasonable outbursts than their white counterparts because society allows the latter more latitude than the former.
Discriminatory Disciplinary Action The culture of organizations tends to unfairly impact minority employees more than it does non-minority employees. For example, white employees, men and other groups not represented in the minority are treated less harshly or receive less punishment than minority employees. Often the disciplinary action is more severe for the minority even though the conduct is similar or exactly comparable, thus creating a hostile work environment for the minority where others in the same situation receive a more lenient punishment.
Wrongful Termination In a wrongful termination situation, the employee files a suit claiming he was fired for an unlawful reason, such as the complaints raised in the EEOC Charge or allegations of retaliation based on Title VII 42 U.S.C §2000e-2.

Creating a Legal PIP

Employers must take care when drafting a PIP to avoid exposing themselves to legal consequences down the line. In particular, employers must be cognizant of any federal, state, or local leave law obligations they may have, such as the FMLA and its state law counterparts, the Americans with Disabilities Act and its state law counterparts, or other leave and disability laws that may apply. Given that the whole purpose of a PIP is to get an employee back to acceptable productivity levels and performance, which given the purpose of the PIP makes sense, employers will sometimes want to know if an employee is going to be absent in the near future due to a serious health condition or disability. Such a question is not necessarily inappropriate if such a question will help the employer craft a legally compliant PIP for the employee, but employers need to carefully consider the implications of such questions to avoid creating legal liability for themselves.
For example, some employers may draft a PIP that asks an employee to respond to the following questions:

• Employees are expected to maintain a consistent work schedule on a regular basis. Do you have any prescheduled appointments over the next month that might impact your ability to arrive to work and/or work the full schedule?
• Employees are expected to maintain a consistent work schedule on a regular basis. Do you have any known reason at this time that you will not be able to work the full schedule on a routine basis?
• Other than the issues described below, do you have any medical conditions known by you at this time that might impact your ability to consistently perform your duties?
• Describe . What kind of assistance or accommodation can the company provide to assist you in meeting your expectations?
• Identify the dates and/or time periods when the employee is expected to be absent from work. If you have other anticipated absences, please describe as well.
• If your overall performance improves so that you are meeting expectations by your goals, what kind of guarantee can the employer get that you will sustain this improvement going forward? If you are unable to give a solid guarantee, please describe what kind of assistance you need from the company to ensure that you will not fail to meet expectations going forward.
• Are there any other issues we should be aware of now that may impact your ability to meet expectations going forward?

Even if the PIP does not contain questions like those above, employers may get information anyway that the employer needs to consider when developing a PIP. For example, an employee’s doctor may give the employee a much shorter recovery period than originally hanradred that the employer needs to take into account when drafting a PIP. The issue here is that if the employee can prove that the failure of the employer to accommodate them with a PIP or whatever else was a "but-for" cause that lead to him being denied accommodation or terminated, the employee could make to a jury that it was the lack of accommodation that caused him the injury rather than the employee not being appropriately qualified for the position.
In cases like the above, what are some best practices that employers can follow so that the creation of a PIP is not a legally or financially costly endeavor for them? Exactly what steps employers should take will depend on the specific facts and circumstances of each situation, but some things to consider doing are:

Competing Rights During a PIP

When a company puts you on a performance improvement plan, it is obliged to comply with all of its usual benefit and work policies. In particular, these policies include a prohibition against discrimination. For example, it is notable that a performance improvement plan is governed by the Americans with Disabilities Act (ADA). This federal law prohibits discrimination against employees based on a disability. The ADA also requires that employers make "reasonable accommodations" for disabled workers. This means that if you tell your employer you are unable to do certain tasks because you have a disability, the employer must offer other ways to help you perform your job. For example, employers may have to provide special computer software to help a blind employee.
The law does not define disability in a productive way for employees. This means that a company could say you are not really disabled and deny your request for reasonable accommodation. You can only win this argument if you show you cannot do your job without some special help. Note that employers are not required to provide an accommodation they deem too expensive. If the accommodation cost too much money, a company could just fire you instead.
Not all workplaces respect these laws. If your company manager ignores federal disability law while putting you on a PIP, you may have a case. Keep a record of when you asked for the accommodation, along with the response from your company. If you can prove your company violated the law, you can file a legal complaint for damages against your employer.

Case Studies: Performance Improvement Plans and Lawsuits

To further understand the legal implications of performance improvement plans (PIPs), let’s take a look at a few real life cases where such performance reviews have resulted in legal and administrative challenges.
Proven To Be Prone To Lawsuits
In one case, Simmons v. Oklahoma Department of Vocational and Technical Education, found in the May 2006 issue of The Federal Lawyer, a teacher at a vocational school was given a PIP based on allegations that he had sexually harassed a student. The statement of the case said that the teacher was not given any notice of the charges made against him (the reasons for his PIP), nor was he given an opportunity to request a hearing before the committee that issued the PIP. After one day, the teacher asked to be reinstated with his original duties and was summarily terminated after the PIP process was completed. He appealed the decision, but the appeal board denied his appeals at three levels "due to his failure to request a due process hearing." After three unsuccessful appeals, the case went to state court, where the teacher appealed the denial of his appeals again. The state court affirmed the commission and the appeals were denied.
The PIP process was deemed unconstitutional as the teacher was denied due process. The obvious problem with this case is that the teacher was denied any notification or opportunity to defend himself against the accusations that he was accused of . The judge ruled that due process would have required prior notice and an opportunity to defend oneself. If the teacher had been given the chance to defend himself, the judge said that perhaps due process would have been satisfied. But the teacher also claimed that his PIP made it impossible to do what the PIP requested him to do. For instance, he was not allowed to talk to students and was restricted to working in his classroom, which made it impossible for him to complete his professional obligations. The judge argued that the teacher could have performed his obligations if he was not prohibited from doing so, but the plaintiff was able to show the court that the PIP made accomplishing his professional obligations "impossible", so the case was reversed and remanded to the trial court.
This case emphasizes the importance of putting an employee on a PIP before actually suspending or firing him/her. The reason for this is that the PIP should give the employee an opportunity to improve, but the employer should also allow the employee to perform his regular duties. Otherwise, if there is a wrongful termination suit, the employee may have a case against the employer. As stated by the judge in this case, it is important to give an employee a chance to defend himself, but also "to allow a notice of the real issues" because it may make it "clear that the plaintiff is …really being terminated for his or her opinions and they have no real relevance to the employment relationship."