The University of Michigan’s medical center has reached a $410,000 settlement with a physician assistant it fired in 2021 after she sought a religious exemption from participating in training related to gender identity and sexual orientation. The agreement, finalized in late 2025, mandates that the hospital establish a formal policy for religious accommodations, train staff on how to request them, and ensure such requests are granted in reasonable cases without retaliation. The settlement follows a legal battle that saw the 6th U.S. Circuit Court of Appeals rule in favor of the plaintiff last year, allowing her case to proceed after a lower court initially dismissed it. Valerie Kloosterman, the former physician assistant, was employed by University of Michigan Health-West for nearly 17 years before being terminated in August 2021. She alleges she was fired after refusing to sign statements about gender identity that conflicted with her Christian beliefs. According to her lawsuit, filed in the U.S. District Court for Western Michigan, the hospital required her to affirm views on gender transition that she considered incompatible with her faith. The legal action was supported by the First Liberty Institute, a Christian law firm specializing in religious liberty cases. Kloosterman described her motivation in a public statement, saying she wished to provide quality care to patients without violating her religious convictions. “All I wanted to do was provide the best care possible to my patients without being forced to violate my Christian beliefs,” she stated. Her attorneys emphasized that the case was grounded in Title VII of the Civil Rights Act of 1964, which protects employees from discrimination based on religion, among other factors. The settlement includes provisions that require the hospital to revise its internal policies regarding religious accommodations. The new policy must ensure that employees can seek and receive accommodations without facing adverse consequences. This change is intended to prevent similar disputes in the future and align the hospital's practices with federal civil rights protections. The legal proceedings took a significant turn in August 2025, when the 6th U.S. Circuit Court of Appeals ruled that Kloosterman had the right to pursue her claim. The appellate judges rejected the hospital’s attempt to resolve the dispute through arbitration, stating that the institution had only proposed this option after realizing the likelihood of the lawsuit succeeding in court. Judge Eric Murphy, appointed by former President Donald Trump, authored the majority opinion, highlighting that the hospital’s training program required employees to affirm certain positions on gender transition, which conflicted with Kloosterman’s medical judgment. The hospital’s response to the settlement was limited. Mary Masson, a spokesperson for University of Michigan Health-West, declined to comment further on the matter, stating in an email that she had no additional information to share. However, the hospital had previously announced in late 2024 that it would stop providing gender-reassignment services to patients under 19, citing pressure from the Trump administration. Kloosterman’s case has drawn attention beyond the immediate legal implications. Her attorneys argued that the outcome reinforces the principle that employers cannot penalize workers for holding sincere religious beliefs. Kayla Toney, an attorney with the First Liberty Institute, praised the resolution, stating that it affirms the rights of individuals like Kloosterman to practice their faith freely in the workplace. The settlement also addresses broader concerns about workplace inclusivity and the balance between religious freedoms and institutional policies. While the hospital has agreed to implement new guidelines, the specifics of how these changes will be implemented remain unclear. The focus now shifts to ensuring compliance with the new requirements and preventing similar conflicts from arising in the future. The case highlights ongoing tensions between religious liberty and institutional policies in healthcare settings. As the settlement becomes effective, the hospital faces the challenge of integrating new protocols into its operations while maintaining the standards of care it provides to patients. The resolution sets a precedent that could influence similar cases nationwide, particularly in sectors where religious beliefs intersect with professional responsibilities.
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