A plaintiff in an employment discrimination case must show: (1) he or she is a member of a protected class, (2) he or she suffered from an adverse employment action, and (3) there is a causal connection between the adverse employment action and his or her membership in a protected class. An adverse employment action is defined as a "significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits." Traditional examples of adverse employment actions are demotions or terminations. 

In Reynolds v. Dep't of the Army, 2011 WL 2938101 (3rd Cir. July 22, 2011), the Third Circuit (which covers Delaware, New Jersey, Pennsylvania and the U.S. Virgin islands) ruled that a performance improvement plan (PIP) does not constitute an adverse employment action. The employer in Reynolds gave the plaintiff employee ninety (90) days to improve his poor job performance, or face demotion, reassignment, or termination. The plaintiff took early retirement shortly thereafter.

In holding that a PIP does not constitute an adverse employment action, the court noted that unlike a demotion or termination, a PIP alone does not require a change in pay, benefits, or employment status. Rather, a PIP is an opportunity to improve an employee's pre-existing job duties.  To make a PIP an adverse employment action would frustrate employers' attempts to improve employee job performance.

However, employers beware - while the Reynolds case may seem like a big win for employers, an adverse employment action may still occur where a PIP is accompanied by a change in employment status, such as a decrease in pay.  In other words, the act of putting a poor-performing employee on a PIP does not, in and of itself, shield an employer from liability under anti-discrimination laws.

The National Labor Relations Act (NLRA) prohibits employers from interfering with employees' rights to join together to improve their wages and working conditions, with or without a union.  Employers who violate the NLRA are often required to provide affected employees with backpay.  This backpay remedy, however, is not always available. 

In Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002), the U.S. Supreme Court held that the NLRB could not award backpay to an undocumented worker who presented  falsified work-authorization documents to his employer.Earlier this month, the NLRB examined the related issue of whether the NLRB could award backpay to an undocumented worker where the employer never asked for work-authorization documents. 

Mezonos Maven Bakery, Inc., 357 NLRB 47 (Aug. 9, 2011) involved a bakery which violated the Immigration Reform and Control Act (IRCA) by hiring seven employees without verifying their work authorization forms. The workers later alleged the bakery committed an unfair labor practice in violation of the NLRA by firing them after complaining about treatment they were receiving from a supervisor. The NLRB awarded back pay to these workers pursuant to a settlement agreement.  The bakery appealed, arguing Hoffman prevented the NLRB from awarding back pay to undocumented workers, regardless of which party violated IRCA.

On August 9, 2011, the NLRB ruled that it was prohibited by Hoffman from awarding back pay to undocumented workers, even where the employer knowingly violates the IRCA.  Additional information on this decision can be found in the NLRB's official news release.