A former SunEdison executive has secured a $34.5 million settlement in what lawyers say is the largest known recovery under the Sarbanes-Oxley Act (SOX) for a whistleblower retaliation claim since the law was enacted two decades ago.
Carlos Domenech Zornoza, former president and CEO of Terraform Global and Terraform Power, and executive vice president of SunEdison, was awarded the settlement after a federal court found he was wrongfully terminated for reporting alleged financial misconduct at the company. The agreement was reached in January 2025, shortly before the scheduled damages phase of a two-part trial, and formally executed in March.
Domenech had alleged that top executives at SunEdison were misrepresenting the company’s financial health to investors. His dismissal came in November 2015, weeks after he raised concerns with SunEdison’s board, and roughly six months before the company filed for bankruptcy.
Retaliation for speaking up
The U.S. District Court for the District of Maryland found in early January that Domenech was terminated in retaliation for his disclosures, a violation of SOX whistleblower protections. Judge Paula Xinis presided over the two-week bench trial on liability, which concluded in August 2024.
“It was a privilege to represent Carlos in this historic case,” said James Tuxbury, partner at Hinckley Allen, the law firm representing Domenech. “He was unlawfully retaliated against for speaking out, standing up, and trying to protect the shareholders.”
The firm called the case one of the most complex it has ever taken on, involving employment law, securities fraud, and accounting issues. The litigation lasted nearly nine years and included multiple venue changes, dismissals, and motions before reaching trial.
Christopher Fenlon, also a partner at Hinckley Allen, said the outcome “underscores the importance of protecting employees who raise concerns about corporate misconduct” and “reminds the boards of publicly traded companies that SOX is alive and well.”
Timeline of a drawn-out case
Domenech first filed a complaint with the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) in May 2016, about six months after his termination. When no decision was issued by OSHA, he withdrew the complaint and filed a lawsuit in federal court in Maryland in 2018.
The case was later transferred to the Southern District of New York to be consolidated with other litigation related to the SunEdison bankruptcy. In 2019, the court dismissed claims against certain board members but allowed claims against Terraform Global, Terraform Power, and SunEdison’s CEO and CFO to proceed.
In April 2023, a judge denied summary judgment motions filed by the defendants, clearing the way for trial. The case was remanded to Maryland for the liability phase, which took place in mid-2024.
On Jan. 7, 2025, Judge Xinis informed the parties she would rule in Domenech’s favor on liability. A day before the damages trial was set to begin, the parties reached a settlement in principle.
Implications for employers and HR leaders
The case highlights the legal risks for companies that retaliate against employees who report concerns about financial irregularities or other corporate misconduct. Employers in publicly traded companies are subject to strict provisions under SOX, which prohibit termination or other retaliation against whistleblowers.
For HR leaders and general counsel, the ruling reinforces the importance of handling internal reports with care, especially when they involve financial disclosures or allegations of fraud. The judgment also demonstrates that whistleblower retaliation cases can result in significant financial and reputational costs for employers, even years after the original incident.
“This was a complex lawsuit involving novel issues in employment law, securities fraud, and accounting,” said Tuxbury. “When the trial finally came nine years later, we were prepared and able to deliver a total victory for our client.”
Domenech credited the Hinckley Allen team for its handling of the case. “Core values and individual character shape a company’s culture. Integrity is the foundation,” he said. “They marshalled the evidence at trial to secure my victory.”
Legal team and firm profile
The legal team from Hinckley Allen included Tuxbury, Fenlon, Michael Connolly, and Janelle Pelli, along with additional lawyers, paralegals, and support staff.
Hinckley Allen is a business law firm with offices in seven states, including New York, Massachusetts, and Florida. The firm advises regional, national, and international clients on legal and regulatory matters, it said.
