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Question:

Is a performance improvement plan (PIP) considered a contract? Do the courts treat PIPs as a contract, and do they provide any legal protection for employers? If we use PIPs, is there anything we can do to minimize legal risk?

Answer:

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A new EEOC appellate decision is getting a lot of attention, and for good reason. It deals with whether a federal agency violated Title VII when it denied a transgender employee’s request to use female-designated bathrooms and locker rooms. The EEOC upheld the agency’s decision and said that, within the EEOC’s federal-sector administrative process, excluding an employee from an opposite-sex bathroom or similar intimate space does not by itself state a valid Title VII claim.

Before employers start rewriting policies at warp speed, here is the big caution flag: the decision itself says it applies only to federal agencies in the EEOC’s federal employee complaint process. It expressly says it does not apply to private employers and does not bind federal courts.

What happened in the case?

The complainant was a civilian IT specialist employed by the Department of the Army at Fort Riley, Kansas. According to the decision, the employee is biologically male and had historically used the men’s bathrooms and locker rooms. In 2025, the employee informed management that he identified as a woman and asked to use female-designated bathrooms and locker rooms. Management denied the request, citing federal policy directing that “intimate spaces” be designated by sex rather than gender identity. The employee filed an EEO complaint, and the Army dismissed it for failure to state a claim. The EEOC then reviewed that dismissal on appeal and affirmed it.

What did the EEOC decide?

The EEOC said that Title VII permits a federal agency employer to maintain single-sex bathrooms and other similar intimate spaces, and to exclude employees, including transgender-identifying employees, from opposite-sex facilities. The opinion also rejected the EEOC’s earlier 2015 Lusardi decision to the extent Lusardi had said agencies must allow transgender employees to use opposite-sex restrooms.

The Commission’s reasoning was basically this: Title VII prohibits discrimination because of sex, but the statute does not specifically address bathrooms. The opinion says men and women are not “similarly situated” in the context of bathrooms and other intimate spaces because of privacy interests tied to biological sex. Based on that logic, the EEOC concluded that maintaining sex-separated facilities is not discrimination under Title VII, and making transgender employees follow the same sex-based rule is, in the Commission’s view, equal treatment rather than unlawful discrimination.

How does this fit with Bostock?

This is where things get spicy, legally speaking. The EEOC acknowledged that the Supreme Court’s decision in Bostock v. Clayton County held that firing or refusing to hire someone for being transgender is sex discrimination under Title VII. But the EEOC also pointed out that Bostock specifically said it was not deciding questions about bathrooms, locker rooms, or similar issues.

The Commission then took the position that Bostock is about equal treatment, not special exceptions. In the EEOC’s view, if an employer bars all men from the women’s restroom and all women from the men’s restroom, then applying that rule to both transgender and non-transgender employees alike is evenhanded.

What does this mean for public employers?

For federal agencies, this decision matters directly inside the EEOC’s administrative complaint system. It gives agencies support for maintaining sex-designated bathrooms, locker rooms, and similar intimate spaces, at least for now, and it says that exclusion from an opposite-sex facility by itself does not automatically make out a Title VII claim in that process.

For state and local government employers, this decision is more of a signal than a rule. The opinion says it does not apply outside the federal-sector EEOC process and does not bind courts. That means state and local public employers still need to think about other legal layers that may apply to them, including federal court precedent in their jurisdiction, state anti-discrimination law, local ordinances, constitutional claims, collective bargaining obligations, and any agency-specific policies already in place.

What does this mean for private employers?

For private employers, this decision is not controlling. The opinion says that plainly. So a private employer should not assume this case gives a green light to change restroom-access rules without further review.

That said, the decision is still important because it shows how the current EEOC leadership is analyzing these issues in the federal sector. In other words, it is a clue about the agency’s present thinking, but not a universal rulebook. Think of it as a flashlight, not a finish line.

Practical next steps for employers

Employers should avoid knee-jerk policy changes based on headlines alone. A better move is to slow down and do a policy checkup.

First, review your current restroom, locker room, dress code, and accommodation policies together rather than in silos. These issues tend to overlap.

Second, identify which laws actually govern your workplace. A federal agency is in a different position than a private employer, and a Texas employer may face a different risk picture than an employer in a state or city with broader gender-identity protections.

Third, make sure any sex-specific facility policy is applied consistently. The EEOC opinion leaned heavily on the idea of evenhanded enforcement and equal quality of facilities for both sexes. The opinion also noted that facilities for one sex cannot be materially inferior in a way that creates an unequal burden.

Fourth, train managers not to freelance. A poorly handled conversation, stray comments, retaliation, or inconsistent enforcement can create risk fast, even when an employer believes its facility policy is lawful. HR’s unofficial motto remains: “Please do not let Bob improvise.”

Fifth, talk with counsel before making major changes, especially if you are a multi-state employer or public employer.

Key takeaways

This EEOC decision says that, in the federal-sector administrative process, a federal agency may maintain sex-separated bathrooms and similar intimate spaces and may require employees to use facilities corresponding to biological sex.

It also says the ruling is limited. It does not govern private employers, and it does not bind federal courts.

So the smartest employer takeaway is not “we’re cleared to change everything.” The smarter takeaway is: this is an important development, but it is not the last word. Employers should review policies carefully, apply rules consistently, watch for further court activity, and get legal guidance before taking action.

Final thought

This case is a reminder that employment law is still actively developing in this area. The EEOC made clear that it was stepping into a gap because courts have not yet definitively resolved the bathroom-access issue under Title VII. The complainant also retains rights to seek reconsideration or file a civil action, so this issue may continue to evolve.

The post EEOC Federal-Sector Bathroom Access Decision: What Employers Need to Know appeared first on Your HelpDesk for HR .

Question:

If an employee refuses a post-accident non-DOT drug test, and company policy says that refusal is grounds for termination, is that a voluntary or involuntary termination?

Answer:

In most cases, this would be considered an involuntary termination, not a voluntary resignation.

Why? Because the employer is making the decision to end the employment relationship based on the employee’s failure to comply with a workplace policy. Even though the employee refused the test, that refusal usually does not mean they “quit.” Instead, it is generally treated as a discharge for violating company policy.

That said, employers should be careful about how they document the separation. In most situations, the best practice is to classify it as:

Involuntary termination due to violation of company policy/refusal to submit to a required post-accident drug test.

This distinction matters most when dealing with:

• unemployment claims,

• internal HR records,

• termination documentation, and

• consistency in employee relations practices.

Best practice: Make sure your policy clearly states:

• when post-accident testing is required,

• that refusal to test may result in termination, and

• that employees have acknowledged the policy in advance.

That way, if the termination is challenged, the employer is in a much stronger position.

The post If an employee refuses a post-accident non-DOT drug test, and company policy says that refusal is grounds for termination, is that a voluntary or involuntary termination? appeared first on Your HelpDesk for HR .

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From the inbox:

What Happens to an Employee’s 401(k) When They Pass Away?

When an employee passes away, one of the first questions a family member may ask is:
How does the beneficiary receive the employee’s 401(k)?

The good news is that, in most cases, the process is fairly straightforward. The beneficiary typically does not get the funds through payroll, and the account usually does not go through the employer’s normal wage payment process. Instead, the 401(k) benefit is generally handled through the plan administrator or retirement plan recordkeeper.

Start with the Plan Administrator or Recordkeeper

For most employers, the first step is for the beneficiary or surviving spouse to contact the company’s HR department, benefits contact, or the 401(k) provider directly. The plan provider may be a company such as Fidelity, Vanguard, Empower, Principal, or another recordkeeper.

The beneficiary should ask for the plan’s death-benefit claim forms or beneficiary claim packet. The IRS explains that a surviving spouse or other beneficiary should contact the employer or plan administrator to make a claim for plan benefits.

What Documents Are Usually Needed?

Although specific forms vary from plan to plan, most administrators will request some combination of the following:

• A completed beneficiary claim form

• A certified death certificate

• Proof of identity

• Possibly a marriage certificate or other supporting documentation

• Tax forms and rollover instructions, if applicable

Each plan has its own written claims procedures, and those procedures are generally described in the Summary Plan Description or other plan materials.

Who Gets the Money?

In most cases, the person listed on the employee’s beneficiary designation form will receive the 401(k) funds. For many 401(k) plans, if the employee was married, the surviving spouse is generally the default beneficiary unless the spouse previously consented to another beneficiary designation in the manner required by the plan and federal law.

That means employers should avoid making assumptions based on a will, family relationships, or verbal statements. The plan administrator will typically look first to the plan’s beneficiary records and the terms of the plan.

Does This Go Through Payroll or Probate?

Usually, no. A 401(k) account is generally paid according to the retirement plan’s rules and beneficiary designation, not through final payroll. For private employers, 401(k) plans are usually governed by federal law, including ERISA and the Internal Revenue Code, rather than by ordinary state wage payment rules.

In many cases, the funds also pass outside of probate if there is a valid beneficiary designation on file. If there is no valid beneficiary, or if the estate is named as beneficiary, then the account may need to be paid to the estate and handled through the estate administration process.

What Payment Options Does the Beneficiary Have?

Once the claim is approved, the beneficiary is usually given options for how to receive the funds. A surviving spouse may often have the ability to:

• Roll the funds into their own IRA or eligible retirement account

• Keep the funds in a beneficiary account, if the plan allows

• Take a lump-sum distribution

The available options and tax consequences can vary depending on the type of beneficiary, the terms of the plan, and current tax rules. The IRS provides specific guidance on beneficiary distribution rules and rollover options.

What Should Employers Do?

Employers are not usually responsible for deciding who gets the account or interpreting the family’s legal rights on their own. Instead, the employer’s role is typically to:

• Direct the family or beneficiary to the plan administrator or recordkeeper

• Provide contact information and plan documents when appropriate

• Avoid making promises about entitlement or timing

• Coordinate respectfully and promptly with the provider

This is one of those moments where clear communication matters. Families are often overwhelmed, and even a simple next-step explanation can be very helpful. HR does not need to solve the whole issue—but HR can make sure the beneficiary gets to the right door.

A Simple Employer Response

Here is a practical response employers can use:

If you are the beneficiary of a deceased employee’s 401(k), please contact our plan administrator or retirement plan recordkeeper to request the beneficiary claim forms. The provider will explain what documents are needed, review the beneficiary designation on file, and provide the available payment or rollover options.

Final Thought

For most employers in most states, the process is similar: the beneficiary claims the 401(k) through the plan administrator, submits the required documentation, and then works with the provider on distribution options. Because 401(k) plans are generally governed by federal retirement plan rules, consistency across states is much more common here than with many other employment issues.

As always, employers should avoid giving tax or legal advice and should refer beneficiaries to the plan administrator, and when appropriate, to a financial or legal professional. Because let’s be real—HR wears a lot of hats, but “estate lawyer plus tax strategist” is a bit much for one headset.

The post What Happens to an Employee’s 401(k) When They Pass Away? appeared first on Your HelpDesk for HR .

From the inbox:

“I’m an HR manager at a mid-size company, and I’m dealing with a situation that’s keeping me up at night. We have an employee whose performance and behavior have been slipping for months. His direct manager wants him gone — yesterday. But when I started pulling the file together, I realized we don’t have much documentation, the handbook language on this particular issue is vague, and honestly, I’m not confident we’ve handled similar situations the same way with other employees. I know we need to act, but I also know this employee could claim discrimination. How do I move forward without putting the company at risk?”

— Stressed in HR

Here’s the Truth: You’re Asking the Right Question at the Right Time

The fact that you paused before pulling the trigger puts you ahead of most. Few moments in an employer’s life carry more risk than the decision to discipline or terminate someone. Get it right and you reinforce a healthy workplace culture. Get it wrong and you’re staring down a discrimination claim with a thin file and a lot of regret.

Here’s the framework I’d walk through before making any move. The Three C’s: Consistency, Communication, and Common Sense. They sound simple, but they’re the difference between a defensible decision and a costly one.

Consistency: Have You Treated Similar Situations the Same Way?

This is where your gut check starts. Before you move forward with this employee, ask yourself — how have we handled this same behavior from other employees in the past? Were the consequences the same? Were they documented?

Consistency is what builds credibility. When discipline is applied evenly across the organization, it tells everyone that the rules are the rules, regardless of who you are. But when an employer treats the same offense differently depending on the employee, that inconsistency starts to look like something else entirely — bias.

And in a courtroom, inconsistency is the evidence. A plaintiff’s attorney doesn’t need to prove you intended to discriminate. They just need to show that Employee A got a warning for the same thing Employee B got fired for, and that the difference lines up with a protected characteristic.

What to do right now: Pull the records. Look at how this specific behavior or performance issue has been addressed with other employees — especially employees who don’t share this person’s protected characteristics. If you find inconsistencies, that doesn’t mean you can’t act, but it means you need to be thoughtful about how you document your reasoning going forward.

Communication: Did This Employee Actually Know the Rules?

You mentioned the handbook language is vague on this issue. That’s a problem.

Before you discipline anyone, ask a simple question: was the rule or expectation that this employee violated actually communicated to them clearly enough that they understood it? It’s fundamentally unfair — and legally risky — to terminate someone for breaking a rule they didn’t know existed.

Now, there are obvious exceptions. You don’t need a handbook policy to tell someone not to steal or threaten a coworker. But for the gray-area stuff — attendance expectations, performance standards, conduct policies — the employee needs to have been on notice. And “it’s in the handbook we gave them two years ago” is weaker than you think if you can’t show they were trained on it or reminded of it.

What to do right now: Trace the communication trail. Was this expectation in the handbook? Was it covered in onboarding or training? Did the manager ever have a direct conversation with this employee about the specific behavior? If the answer to all of those is no or unclear, you may need to start with a documented conversation or written warning rather than jumping straight to termination.

Common Sense: Does the Punishment Fit the Situation?

Step back from the file for a minute and look at this the way a reasonable outsider would. Does what you’re about to do make sense given everything that’s happened?

This is the common sense test, and it matters more than most HR professionals realize. Ask yourself three questions:

1. Does the punishment fit the offense? Terminating someone for a first-time minor infraction when others have received warnings for the same thing will look disproportionate — both internally and in front of a jury.
2. How will the rest of the organization see this? Your other employees are watching. If the decision feels fair and proportionate, it reinforces trust. If it feels like an overreaction or a targeted move, it erodes it.
3. How would this look in a courtroom? Employment discrimination law doesn’t technically require the employer’s decision to be “fair.” But here’s what’s true in practice — employees who feel they were treated unfairly are the ones who call attorneys. And juries are made up of people who’ve had jobs, who’ve had bosses, and who know what fair looks like.

What to do right now: Before you finalize anything, sit down with someone you trust — whether that’s legal counsel, a senior leader, or an outside advisor — and walk them through the full picture. If you find yourself struggling to explain why this consequence is appropriate, that’s your signal to recalibrate.

Putting It All Together

Here’s your action plan before you make any move on this employee:

Run the consistency audit. Pull comparable situations and verify the outcomes were aligned. Document what you find.

Verify the communication chain. Confirm the employee was clearly informed of the expectation they violated. If that chain is weak, shore it up with a direct, documented conversation before escalating.

Apply the common sense lens. Pressure-test the proposed consequence against how a reasonable person — a coworker, a juror, a judge — would view it.

Document everything. Your file should tell a clear story: what the employee did, what was expected, how you’ve handled it before with others, and why this outcome is appropriate.

The manager wants this resolved yesterday. I understand that urgency. But taking an extra week to build a defensible, well-documented case is always cheaper than spending two years defending a rushed decision in litigation.

You’ve got good instincts. Trust them, do the work, and make the decision you can stand behind.

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