I think the first leaf finished growing and its making another. It suggests the plant was stressed when starting the first leaf causing it to stop.

Jane

But I think the 2nd leaf down is still growing. Someone from work gave me this a few weeks ago. They had it in their office and I told them I would take it off their hands when it was done blooming if they were just going to toss it out. I have a feeling it wasn't watered very often. If that leaf is gonna stay that small, that will be quite annoying to look at.

the stress might have been caused from the roots dying off which is evident at the surface. which means that there could possibly be more root rot underneath where you can't see it.

possibly watered to much with a lack of fresh air flow

Gaston

The leaf will stay small. If you improve the growing conditions, the newest leaf will get big. You won't notice the smaller one. Gaston is correct. The roots look bad. Get some fresh orchid mix and repot the plant. Give it some fertilizer and put it near a window. The newest leaf will grow and you might get flowers this winter.

Jane

I used to have a phal that would partially grow a leaf, then start on a second, and both leaves grew to full size. The plant was not stressed, and did this in multiple years. I don't know if this will happen to yours, just saying that it could be fine. Hope for the best!

I already repotted. I cut some bad roots. The stuff on top I just didn't end up cutting off... I guess I should have. I'm used to aerial roots not looking fabulous, but yes, those do look pretty dead and dried up.