Here are the allegations: A Massachusetts lawyer discovered child pornography on a client's computer and told his firm about it. The firm instructed the lawyer to destroy the child pornography, and the lawyer refused to do so. The lawyer (correctly, in my view) explained that the firm could not conceal or destroy evidence of a crime. The firm then fired the lawyer for failing to follow instructions. The lawyer subsequently revealed the child pornography to the FBI and sued the law firm for wrongful termination.
A Massachusetts trial court dismissed the wrongful termination claim, observing that the claim would lead to the disclosure of privileged or confidential information. An appeals court disagreed and has held that the claim may proceed. Here's the story from the Massachusetts Lawyers Weekly.
If the allegations are accurate, this is quite a black eye for the law firm involved.