A Nonprofit & its Executive Director are sued for Disability Discrimination and Violations of the CT Whistleblower Law
Alleged Wrongdoing:
This case involves a small but nationwide nonprofit organization that provides various services for the benefit of disabled children. In this case, the nonprofit hired Stephanie as a senior director (working remotely) and she was responsible for managing multiple programs, including fiscal administration and ensuring compliance with all required grant deliverables. Stephanie alleges that at the time she started her position, the programs and grants for which she was responsible had been mismanaged and that she spent the first few months of employment bringing her employer into compliance. During this time she worked closely with the nonprofit’s executive director (ED) and another director (NM) who happened to be married to the ED, without issue (neither of whom directly supervised her). Stephanie received a rating of “exceptional” on her 90-day review and a salary bump which she alleges was tied to that performance review. Note: It appears that all senior leadership worked remotely, including the ED and NM.
Approximately one year into Stephanie’s employment, NM was promoted and Stephanie began reporting to NM. In private separate conversations with the ED and NM, Stephanie disclosed that she had been diagnosed with Borderline Personality Disorder (BPD) and advised that she performs best when given “clear expectations, predictable communication and structured feedback.” Stephanie alleges she made her disabi;ity disclosure to her supervisors because “Defendant presents itself publicly as an inclusive, disability-aware organization” AND Defendant had no dedicated HR department, just a series of directors and managers (responsible for other roles) with no HR training taking on various HR responsibilities. This included the nonprofit’s Director of Finance and their Director of Digital Operations, neither of whom had any HR experience, assuming the role of HR Director. Defendant had an HR Manager, whom Stephanie alleges had no authority to make personnel decisions.
Around the time of Stephanie’s promotion several employees filed an internal complaint alleging they had issues with the ED’s communication style and her relationship with NM, particularly that the ED called staff meetings with little notice, addressed issues with “apparent bias;” “discussed employees inappropriately;” and through her relationship with NM, engaged in psychological triangulation. Seemingly, as a result of this investigation, the employer hired a part-time HR consultation but it seems to have had little impact as Stephanie goes on to allege that several staff members experienced a hostile work environment at the hands of the ED, and that Stephanie herself began to have issues with the ED and NM, purportedly because of her predecessor’s lapses on grant deliverables. Stephanie alleges that she was the target of unfair accusations which the ED escalated to HR, and received emails from the ED while on PTO and while travelling for work which she characterizes as emotionally charged and likely to trigger feelings of self-harm. Stephanie requested that leadership refrain from sending her email while she was off work or travelling, and contacted the HR consultant to start the interactive process. NM responded to Stephanie’s request by calling it unreasonable and advised Stephanie to refrain from checking her work email address on her days off or while travelling. Stephanie found this solution to be “dismissive and inconsistent with the disability laws.”
By the beginning of 2025, meetings between Stephanie and the ED or NM were not going well, and Stephanie “privately” spoke to NM about her need for meeting preparation and clear agendas prior to meeting. Stephanie goes on to allege that she attempted to advocate for another employee who needed an accommodation under the ADA—an allegedly futile endeavor. Shortly after this, NM communicated that she was concerned that Stephanie’s former colleagues and subordinates had confidentially shared that Stephanie “triangulated colleagues”—information Stephanie believed was limited to HR or the ED, and Stephanie felt that because the ED was married to NM, information was shared inappropriately between them. The beginning of the end started in April 2025, when Stephanie was assigned to work on an grant that had been issued based on an insufficient budget for certain line items, which resulted in Stephanie escalating a “process gap” between program staff and the finance department who were supervised by the ED. After whistleblowing this concern, Stephanie alleges that the ED became increasingly hostile with her, communicated in a way that invoked fear and anxiety, and accused Stephanie of being inflexible by expecting everything to be “neatly tied with a bow.” Stephanie alleges these comments stigmatized her condition because they reframed her disability symptoms as performance concerns. Within three months the relationship between Stephanie and her supervisors deteriorated to the point Stephanie was terminated for “insubordination” after Stephanie asked to schedule a meeting to discuss a process for internal project approval and refused to discuss a pending issue until the meeting was conducted. This termination occurred despite Stephanie having excellent performace reviews and with no prior written warning.
HR Compliance Analysis
Where do we even start on this one? There are four separate tangible issues here and several more legal ones:
Senior leadership all works remotely.
Employees feel threatened or dissatisfied with the ED’s relationship with NM.
Employer has inexperienced HR staff.
Employer has no defined disability accommodation process which consolidates knowledge of the employee’s disability with an external administrator or HR, so the employee does not feel targeted by general supervision that may overlap with their disability symptoms.
The legal issues are a little trickier and the only one that is really relevant for this HR Compliance Analysis is the relationship between the ED and NM—a precarious relationship in any company but particularly in a nonprofit.
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Remote Work and Employee Morale
While I believe that working remotely has its plusses and can lead to increased performance for many employees; it’s important that any company that implements full time remote work make structural changes in their communication expectations to preserve collaboration, and a sense of community and teamwork. However, this can easily be threatened when only two senior leaders constantly have each other’s ears because they’re working out of the same location and they’re involved in a personal relationship where their loyalties may lie with one another over their employer or their team members. It’s foreseeable that whis can lead to a divisive us against them dynamic between the cohabitating employees and their team members, particularly if those cohabitating are in senior leadership positions as is the case here.
Romantic Relationships in the Workplace
Second, no employer should ever permit a romantic relationship between two individuals in a reporting relationship—presumably NM reports to the ED directly or indirectly, who in turn, has a personal tangible financial benefit from NM maintaining her employment at the nonprofit because they are cohabitating—this is clearly a conflict of interest when the ED can control NM’s ongoing employment and usually her salary too. Further, from a sexual harassment or employee morale perspective, this type of relationship also causes a lot more problems than it solves and it’s hard to implement safeguards when one member of the pair is in the most senior leadership position in the company. Finally, an ED is a disqualified person under the IRS nonprofit requirements for 501(c)(3) exemption status and the nonprofit needs to jump throughout the course of the ED’s relationship with her subordinate to ensure that the entity’s exemption status is not compromised.
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Inexperienced HR Staff
The most obvious issue in terms of HR compliance is the absence of experienced HR personnel. Having represented several nonprofits, I am aware that they often have difficulty attracting quality HR candidates due to their financial constraints, but filling a senior HR position is the most important hiring decision any company will ever make and you cannot skimp on this hire or expect an inexperienced leader to “pick it up” on the job. If you cannot afford to hire someone with the experience you need, then look for a fractional CHRO or ask your legal counsel to help train your current HR staff on what matters they should elevate for legal advice. If you need advice on how to hire for HR, see this Article.
ADA Accommodation Process
The ADA is an ever-evolving and highly complex law to administer, and highly experienced HR staff can run afoul of its mandates. We strongly recommend that ADA and FMLA administration is only handled by HR staff or an external administrator who conceals the medical reasons underlying the employee’s exercise of their rights. If supervisors are unaware their subordinate has BPD or some other condition and are only aware of the required accommodation with which they must comply, they cannot be accused of disability discrimination unless they ignore the approved accommodation. This means that while you can be a disability-inclusive organization (as are many human services providers), you should not encourage open disclosure of hidden disabilities such as mental health diagnoses or other latent disabilities or medical conditions. Instead, at onboarding, employees should be notified of who to contact if they need leave or an accommodation and advised that they are prohibited from disclosing their medical condition to their coworkers or supervisors. Provide managers with comprehensive training on their obligations under the ADA and FMLA including prohibited questions or statements and to whom concerns should be elevated. Finally, erect an effective layer of confidentiality between the staff receiving medical disclosures and employees in the disclosing party’s supervisory chain.
Need to ensure your ADA and FMLA policies and procedures are compliant? Contact CHRO for a free consultation.
Please Note: In CHRO’s HR Compliance Corner we discuss recent federal court filings for unlawful employment practices and discuss various solutions that could have prevented the complaint. In this section, we treat the complaint allegations as true simply for the purpose of discussion, but readers should realize that the defendant has various defenses they will raise that may entirely undermine the allegations of unlawful conduct in the complaint. Thus, our commentary should not be taken as endorsement of the plaintiff’s position, only as a point of reference for discussion. Neither CHRO nor its officers or employees, have any affiliation or relationship with either the plaintiff or the defendant in any case discussed.
