University of Michigan Health-West settled a federal lawsuit brought by a physician assistant who says the hospital fired her three weeks after she asked for a religious accommodation, and the terms force the institution to rewrite its policies on faith in the workplace.
Valerie Kloosterman worked as a physician assistant at University of Michigan Health-West and, by her legal team's account, had a record of positive performance reviews. That changed when the hospital required employees to complete mandatory gender identity training. Kloosterman, a Christian, told her employer the training required her to affirm statements about gender identity that violated her faith. She asked for a religious accommodation. Three weeks later, she was out of a job.
Now the hospital has agreed to pay $410,000 in damages and attorneys' fees to settle the lawsuit Kloosterman filed in October 2022, Fox News Digital reported. Beyond the payout, the settlement compels the hospital to create a formal religious accommodation policy that complies with federal law, train all employees on that policy, and guarantee reasonable religious accommodations without retribution for anyone who requests one.
The lawsuit, filed by First Liberty Institute on Kloosterman's behalf, painted a grim picture of how the hospital handled her request. Before her termination in August 2021, hospital officials called Kloosterman into a meeting where, according to the complaint, they disparaged her religious beliefs, called her "evil" and a "liar," and told her she could not bring her Christian beliefs into the workplace.
Officials at that meeting also accused Kloosterman of contributing to suicides among individuals with gender dysphoria, per the lawsuit's allegations. First Liberty Institute said the hospital made no effort to accommodate her beliefs before terminating her.
Kloosterman described her position in straightforward terms:
"All I wanted to do was provide the best care possible to my patients without being forced to violate my Christian beliefs."
The case sits at the intersection of two fault lines in American institutional life: the rapid adoption of gender identity policies across healthcare systems and the federal protections that shield employees from religious discrimination. Title VII of the Civil Rights Act, the federal workplace anti-discrimination statute, prohibits employers from punishing workers for their sincerely held religious beliefs. That law was central to Kloosterman's claim.
The Trump administration has moved to strengthen those protections. The DOJ recently issued sweeping updates to federal religious liberty guidance, reinforcing the legal framework that cases like Kloosterman's rely on.
The $410,000 payout is significant, but the policy reforms embedded in the settlement may carry longer-term consequences for University of Michigan Health-West. The hospital must now build a religious accommodation process that meets federal legal standards, inform every employee of that process, and ensure that workers who invoke it face no retaliation.
Kayla Toney, counsel at First Liberty Institute, framed the outcome as a warning to employers nationwide. The New York Post reported on Toney's statement:
"Title VII prohibits employers from discriminating against and punishing employees for their faith. Valerie is an exceptional physician assistant who cares for each of her patients. Employers cannot drive out people like Valerie just because of their sincere religious beliefs. We are grateful to have resolved this matter with University of Michigan Health-West."
Fox News Digital reached out to University of Michigan Health-West for comment. No response from the hospital appeared in the reporting.
The case unfolded over nearly four years from termination to resolution. Kloosterman lost her job in August 2021. She filed suit more than a year later, in October 2022. The settlement date was not disclosed publicly.
Kloosterman's case is not an isolated episode. Across American institutions, hospitals, schools, government agencies, mandatory training and policy mandates on gender identity have generated a growing list of legal conflicts with employees and participants who hold traditional religious views on sex and gender.
The Supreme Court recently weighed in on related questions, upholding state bans on transgender athletes in women's sports in a decision that drew sharp dissents from the Court's liberal wing. Those rulings reflect a broader legal landscape where courts are increasingly asked to draw lines between anti-discrimination mandates and competing constitutional and statutory rights.
Federal agencies have also stepped into the arena. The Education Department has opened probes into schools over gender-related content in classrooms, signaling that the federal government under the current administration is willing to scrutinize how institutions handle these issues.
What makes the Kloosterman case stand out is the speed and severity of the hospital's response. A physician assistant with a clean record asked for a religious accommodation, a routine request under federal law, and was terminated in three weeks. The allegations in the complaint go further: officials did not just deny her request, they reportedly attacked her faith directly, calling her "evil" and accusing her of causing harm to vulnerable patients.
Kloosterman expressed hope that the settlement's policy reforms would protect other employees of faith at the hospital going forward:
"This new policy ensures that providers of faith and employees at UMHW will receive religious accommodations so that they can provide excellent care consistent with their medical judgment, because all patients are created in the image of God."
Several open questions remain. The settlement does not appear to include any public admission of wrongdoing by the hospital. The specific content of the mandatory training, what statements Kloosterman was asked to affirm, has not been detailed in available reporting. And the breakdown of the $410,000 between personal damages and attorneys' fees is not public.
When institutions decide that a worker's faith is the problem, they should expect the law to remind them otherwise, and $410,000 is one way to make the lesson stick.