April 2025
Second Circuit holds employees get disability accommodations even if not necessary to perform their job
In Tudor v. Whitehall Central School District, the Second Circuit Court of Appeals vacated a lower court’s grant of summary judgment in favor of the school district, holding that a qualified employee with a disability may be entitled to a reasonable accommodation under the Americans with Disabilities Act (“ADA”) even if they can perform the essential functions of their job without accommodations.
Under the ADA, employers must grant a reasonable accommodation to a qualified individual with a disability, unless the accommodation would pose an undue hardship on the employer. The ADA defines a “qualified individual” as “an individual who, with or without reasonable accommodation, can perform the essential functions of the [job]” (emphasis added). The lower court rejected the employee’s failure-to-accommodate claim, holding that the employee did not establish she was entitled to an accommodation because she was able to perform her job’s essential functions without one.
The Second Circuit disagreed, emphasizing that the phrase “with or without” means “the fact that an employee can perform her job responsibilities without a reasonable accommodation does not mean that she must,” and that the ADA requires employers to provide reasonable accommodations, not just necessary ones. The Second Circuit remanded the case for further proceedings.
S&K Take: The Second Circuit—which covers New York, Connecticut and Vermont—is now aligned with the majority of circuit courts in holding employers may not deny an accommodation request merely because an employee is able to perform their essential job duties without it. Employers must carefully consider whether an accommodation is reasonable or imposes an undue hardship but cannot deny an accommodation just because it is not necessary.
Sarbanes-Oxley Act whistleblower settles retaliation claim for $34.5 million, the largest documented SOX settlement to date
A whistleblower recently secured a $34.5 million settlement of his retaliation claim under the Sarbanes-Oxley Act (“SOX”) following an almost 10-year legal dispute with his former employer. The SOX whistleblower provisions protect employees from retaliation if they complain, among other things, about what they reasonably believe is their employer’s violation of a securities law, rule or regulation. In Zornoza v. Terraform Global, Inc., et al., a former executive filed a lawsuit, in August 2018, alleging he was terminated in retaliation for reporting concerns about his employer’s alleged misrepresentations in public financial disclosures.
In April 2023, the court denied summary judgement on the executive’s retaliation claim, finding triable issues regarding whether he had engaged in SOX-protected activity and whether that activity was a contributing factor in his termination. In January 2025, following a two-week bench trial, the court found the employer liable under SOX and set a trial date later that month to determine damages. On the eve of the damages trial, the parties announced a settlement in principle, and in March 2025, the parties executed a private settlement agreement memorializing their $34.5 million settlement, which was just shy of the executive’s claim for damages exceeding $35 million, and which included a public announcement by the employer.
S&K Take: This case emphasizes (a) the broad scope of SOX’s whistleblower protections which, as we previously reported, are often interpreted liberally, and (b) the potential liability associated with SOX violations. While the parties’ settlement discussions and the terms of their agreement are private, the settlement amount may incentivize future whistleblowers and their counsel.
Georgia federal court allows employer’s trade secret claims to proceed on an amended and more specific complaint
A federal court in the Northern District of Georgia permitted a biomedical technology company’s claims for trade secret misappropriation and breach of contract against its former Chief Scientific Officer to survive a motion to dismiss after the company amended its complaint to identify 12 specific examples of trade secrets that the employee allegedly misappropriated. The company had accused the former employee of downloading over 10,000 internal files containing sensitive product information, including product formulas, marketing strategies and manufacturing protocols to her personal devices and accounts after she was notified that the company wanted to negotiate her departure.
Previously, the court had denied the company’s motion for a temporary restraining order seeking return of the company’s proprietary and trade secret information because the company “ha[d] not introduced evidence that [the employee] accessed [the company’s] documents for any purposes other than to do her job, and the case law is very clear that this does not constitute misappropriation.” In response, the company filed the amended complaint which attached as exhibits the various agreements that the employee had allegedly violated and more precisely identified the trade secrets allegedly misappropriated.
The former employee moved to dismiss the amended complaint, asserting that the company had not sufficiently identified the existence of any protectable trade secrets or adequately alleged misappropriation. This time, the court rejected the employee’s arguments and found in favor of the company, crediting the company for providing specific examples rather than just listing general categories of alleged trade secrets. The court further found the company’s allegations that the employee uploaded the trade secrets to her personal devices and personal Google Drive in violation of her employment agreement, company policies, a confidentiality training and her fiduciary duties were sufficient at the motion to dismiss stage to constitute misappropriation.
Finally, the court rejected the employee’s argument that the breach of contract claim should be dismissed because she did not use or disclose the company’s documents and information for any purpose outside her employment and the company, therefore, suffered no damages because of her alleged misconduct. The court determined that these were issues to be addressed through discovery, not a motion to dismiss.
S&K Take: This case emphasizes the importance of adequately identifying in a pleading the trade secrets at issue and the nature of the misappropriation. Rote listing of general categories of trade secrets information, or the fact alone of downloading information in a manner that could be consistent with an employee’s job duties, may be insufficient to sustain a claim.
