Performance Improvement Plan Not Retaliation, 10th Circuit Finds

Appeals court upholds UPS win against racial discrimination claims

Fearing retaliation claims, cautious employers might be reluctant to do anything to affect an employee’s work situation after he or she has made a discrimination complaint. But a federal appellate decision might have created more room for Colorado employers to institute performance improvement plans without them being construed as adverse actions.

On Oct. 4, the 10th Circuit Court of Appeals fully upheld UPS’ summary judgment grant on discrimination and retaliation claims one of its security managers brought against the company. The employee, Charles Payan, argued the company placed him on a performance improvement plan and transferred him to another department in retaliation to his reporting discrimination by his supervisor. In addition to siding with the lower court in finding no discrimination, the appellate court held that Payan suffered no hardship from the PIP and the transfer and therefore those actions didn’t constitute retaliation under Title VII of the Civil Rights Act.

In finding that a PIP by itself isn’t retaliatory, the 10th Circuit joins several other federal appellate courts including the 5th, 6th and 7th circuits. The decision might give Colorado employers more confidence that they can lawfully place employees in PIPs or transfers after they have made a Title VII complaint.

Payan, the plaintiff, was a security supervisor at UPS in Salt Lake City who had been working for the company since 1991. According to his complaint, his direct supervisor frequently harassed him and created a hostile work environment. Both men are Hispanic, and Payan claimed that Martinez belittled him for not speaking Spanish, and that Martinez showed a preference for another manager who was fluent in the language. Martinez would also target Payan with “abusive, critical and condescending” behavior during conference calls, Payan alleged. Payan argued that this harassment was driven by racial animus.

To read this story and other complete articles featured in the October 15, 2018 print edition of Law Week Colorado, copies are available for purchase online.