Christian Physician Assistant Wins $410,000 Settlement After Being Fired Over Transgender Policy

Valerie Kloosterman spent 17 years as a physician assistant at University of Michigan Health-West before the hospital fired her in August 2021. Her offense: asking for a religious accommodation that would let her avoid using preferred pronouns and referring patients for gender-transition procedures.

In July 2026, the hospital agreed to pay $410,000 to settle her wrongful termination lawsuit. The agreement also requires the hospital to create and enforce a new religious accommodation policy.

Kloosterman, represented by the First Liberty Institute, filed her lawsuit in 2022 after hospital officials allegedly called her "evil" and a "liar" and accused her of contributing to patient suicides when she raised her concerns. She had requested to address patients by their first names rather than use pronouns that conflicted with her beliefs.

The case reached the U.S. Court of Appeals for the 6th Circuit, which rejected the hospital's attempt to push the dispute into arbitration. That ruling cleared the path for the settlement.

Under the new policy, employees with sincerely held religious beliefs will not be required to affirm statements about gender identity, participate in gender-transition procedures or referrals, or use pronouns that conflict with their conscience. The hospital also agreed to train staff on these protections.

Kayla Toney, counsel at the First Liberty Institute, said the settlement reinforces Title VII of the Civil Rights Act of 1964, which bars employment discrimination based on religion.

The case drew attention from religious liberty advocates who argued that healthcare workers should not have to choose between their faith and their careers. Kloosterman's attorneys said her record at the hospital had been consistently positive before the conflict arose over the diversity training mandate.