A Christian physician assistant who spent 17 years at a Michigan hospital walked away with a $410,000 settlement after she claimed the institution fired her for seeking religious exemptions from its transgender patient policies, and the hospital agreed to rewrite those policies as part of the deal.
Valerie Kloosterman reached the settlement with University of Michigan Health, West, her former employer, resolving a lawsuit she filed in October 2022. First Liberty Institute, the legal organization that represented Kloosterman, announced the agreement on Wednesday. The terms go beyond the payout: the hospital must change its gender transition policy, conduct staff trainings, and adopt new guidelines that allow employees to decline participation in gender transition treatments if doing so violates their faith.
Under the new guidelines, hospital employees will not be required to use pronouns in a way that conflicts with their sincerely held religious beliefs or conscience. For a health system that allegedly fired a veteran clinician over exactly that issue, the policy reversal amounts to a concession on every point Kloosterman fought for.
Kloosterman worked at University of Michigan Health, West for 17 years before the hospital let her go in August 2021. Fox News reported that the firing came just three weeks after Kloosterman requested a religious accommodation from mandatory gender identity training that conflicted with her Christian faith.
Her objections centered on two specific workplace requirements: referring patients for transgender surgical procedures and using "they" pronouns for individual patients. Both, she said, violated her religious convictions.
Instead of granting an accommodation, hospital officials allegedly summoned Kloosterman to a meeting where they called her "evil" and a "liar" while criticizing her religious beliefs. In testimony before the Religious Liberty Commission, a body formed under President Trump, Kloosterman recounted that an official told her that using a patient's name instead of preferred pronouns "would lead them to suicide, and I would be the cause."
That is a remarkable thing to say to a clinician with nearly two decades of service. And it captures the coercive climate Kloosterman described, one in which disagreement on pronoun usage was treated not as a policy difference but as a moral failing worthy of termination.
Kloosterman's legal team at First Liberty Institute built the case around Title VII of the Civil Rights Act, the federal law that prohibits employers from discriminating against workers on the basis of religion. Kayla Toney, counsel at First Liberty, framed the stakes plainly after the settlement was announced.
Toney told the Daily Mail:
"Title VII prohibits employers from discriminating against and punishing employees for their faith."
She called Kloosterman "an exceptional physician assistant who cares for each of her patients" and added:
"Employers cannot drive out people like Valerie just because of their sincere religious beliefs."
The settlement requires University of Michigan Health, West to create a formal religious accommodation policy that complies with federal law, train all employees on those protections, and provide reasonable religious accommodations without retribution. That last provision, no retribution, reads like a direct acknowledgment of what Kloosterman alleged happened to her.
Kloosterman, for her part, has not described her stance as a refusal to treat anyone. In her own words:
"All I wanted to do was provide the best care possible to my patients without being forced to violate my Christian beliefs."
She testified before the Religious Liberty Commission in March, telling the panel that she continues to serve patients of all backgrounds, motivated by her Christian faith. The settlement's new policy framework reflects that distinction, between declining to personally participate in specific procedures and refusing to care for a category of patients.
That distinction matters. Kloosterman did not walk away from medicine. She asked for the kind of religious accommodation that Title VII was written to protect. The hospital's response, according to her lawsuit, was to brand her a bigot, pressure her to comply, and then fire her when she would not.
The $410,000 figure covers both damages and legal fees, though the breakdown between the two was not disclosed. The dollar amount alone sends a signal, but the policy changes may carry more weight in the long run. Any employee at University of Michigan Health, West who holds sincere religious objections to gender transition procedures or pronoun mandates now has formal, written protections that did not exist when Kloosterman was shown the door.
The Daily Mail reached out to the University of Michigan Health system for comment. No response was reported.
The silence is notable. A health system that allegedly called a 17-year employee "evil" for her faith has now agreed to pay her six figures and rewrite its own rules. Whether the institution treats this as a genuine course correction or a cost of doing business will be measured by what happens to the next employee who files an accommodation request.
When a hospital fires a veteran clinician for asking to practice her faith and then rewrites its policies to prevent exactly that kind of firing, the settlement speaks for itself, and so does the failure that made it necessary.
