The University of Michigan’s medical center has agreed to pay $410,000 in damages to a physician assistant it fired after she requested a religious exemption from referring patients for sex-change treatments.
The settlement with former employee Valerie Kloosterman requires University of Michigan Health-West to create a policy for religious accommodations, train employees in how to obtain them and grant them in reasonable cases “without retaliation.”
Ms. Kloosterman said in a statement the agreement ensures that all employees “can provide excellent care consistent with their medical judgment, because all patients are created in the image of God.”
“All I wanted to do was provide the best care possible to my patients without being forced to violate my Christian beliefs,” said Ms. Kloosterman, who sued the hospital in October 2022 after being terminated a year earlier.
The First Liberty Institute, a Christian law firm representing Ms. Kloosterman, announced the settlement Wednesday. First Liberty attorney Kayla Toney hailed it as a vindication of federal civil rights laws prohibiting “employers from discriminating against and punishing employees for their faith.”
“Employers cannot drive out people like Valerie just because of their sincere religious beliefs,” Ms. Toney said. “We are grateful to have resolved this matter with University of Michigan Health-West.”
The 6th U.S. Circuit Court of Appeals upheld Ms. Kloosterman’s right to sue the hospital in August 2025, reversing a lower court’s ruling from 2023.
At around the same time, the University of Michigan announced it would no longer provide gender-reassignment services to patients under 19, bowing to pressure from the Trump administration.
“Thanks for the opportunity to comment, but I have no information to share about the settlement,” Mary Masson, a spokeswoman for the medical center, said Wednesday in an email.
Ms. Kloosterman, a 17-year veteran of the hospital, filed her lawsuit in the U.S. District Court for Western Michigan. It said that Michigan Health violated her religious freedom by firing her in August 2021 after she refused to sign statements about sexual orientation and gender identity that she said contradicted her biblical belief in two sexes.
Although Ms. Kloosterman avoided using transgender and nonbinary pronouns, the complaint noted she called patients by their first names and “never used pronouns that went against a patient’s wishes.”
The hospital sent a letter explaining to Ms. Kloosterman, a member of the United Reformed Church, why it fired her.
A three-judge panel of the appeals court unanimously rejected hospital officials’ offer to settle the matter in arbitration, noting they only offered arbitration after learning her legal claims were likely to succeed in court.
“Even apart from her religion, Kloosterman also believes that puberty-blocking drugs and sex-reassignment surgeries do not qualify as proper health care as a matter of her medical judgment,” 6th Circuit Judge Eric Murphy, a Trump appointee, wrote in a majority opinion. “Yet the training would have required her to affirm statements inconsistent with these opinions on threat of termination.”
Judges Stephanie Davis and Rachel Bloomekatz, both Biden appointees, concurred that the lawsuit could proceed.
