University of Michigan Health-West settled a religious discrimination lawsuit with a 17-year employee it fired three weeks after she requested a faith-based exemption from mandatory gender identity training.
Valerie Kloosterman spent nearly two decades as a physician assistant at the Michigan hospital system, earning positive performance reviews throughout her tenure. Then the hospital adopted new transgender patient policies, including mandatory diversity training that required staff to affirm statements about gender identity, use patients' preferred pronouns, and be willing to refer patients for gender-reassignment procedures. Kloosterman, a Christian, 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 attorney fees to settle Kloosterman's federal lawsuit, and to overhaul its internal policies to protect employees who raise religious objections. The case, first reported by Fox News Digital, stands as one of the clearest examples yet of what happens when institutional diversity mandates collide with the religious liberty protections Congress wrote into federal law decades ago.
Kloosterman had worked at what was formerly known as Metropolitan Hospital before University of Michigan Health-West took over operations in 2021. After the takeover, the system rolled out new policies requiring all employees to use transgender patients' preferred pronouns and to facilitate gender-reassignment procedures, including prescribing hormone blockers. A mandatory LGBTQ+ diversity training module accompanied the policy changes.
Kloosterman objected. She told her employer she could not affirm statements about gender identity that contradicted her Christian faith, and she cited her Hippocratic oath, "do no harm", as grounds for declining to facilitate procedures she believed caused more harm than good. She proposed a compromise: she would use patients' names rather than pronouns. The hospital refused.
What followed was not a negotiation. The lawsuit alleged that UMHW officials called Kloosterman to a meeting where they disparaged her religious beliefs, called her "evil" and a "liar," told her she could not bring her Christian beliefs into the workplace, and accused her of contributing to suicides among individuals with gender dysphoria. Just The News reported that the hospital's DEI program director was among those who confronted Kloosterman in those terms.
On August 24, 2021, the hospital fired her. Her legal complaint stated that UMHW did not even allow her to finish her patients' charts for that day, collect her belongings, or say farewell to colleagues and patients she had served for 17 years. Her termination letter listed three reasons, all directly related to her religious beliefs about gender identity and her refusal to assist with gender-reassignment procedures.
That detail matters. Under Title VII of the Civil Rights Act, the federal law that bars employers from discriminating against workers because of their religion, an employer must make a reasonable effort to accommodate sincerely held religious beliefs before resorting to termination. UMHW, by Kloosterman's account and the terms of the eventual settlement, made no such effort.
Kloosterman filed suit in October 2022, represented by First Liberty Institute, a legal organization focused on religious liberty cases. Kayla Toney, counsel at First Liberty, framed the issue in blunt terms:
"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."
First Liberty's own summary of the case was equally direct. As the New York Post reported when the suit was first filed, the legal team argued that "if not for Ms. Kloosterman's religious beliefs about gender and sexuality, she would not have been fired."
The $410,000 payout covers both damages to Kloosterman and fees for her attorneys. But the monetary figure is only part of the resolution. Under the settlement terms, UMHW must now create a formal religious accommodation policy that complies with federal law, inform and train all employees about the policy, and provide reasonable religious accommodations without retribution to any worker who requests one.
In other words, the hospital agreed to do what Title VII already required it to do before it fired Kloosterman in the first place.
Kloosterman herself pointed to the policy changes as the settlement's most significant outcome:
"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."
She also addressed what she said had motivated her from the start:
"All I wanted to do was provide the best care possible to my patients without being forced to violate my Christian beliefs."
Fox News Digital reached out to University of Michigan Health-West for comment. No response was reported.
Kloosterman's case fits a pattern that has played out across health care, education, and government in recent years. Institutions adopt sweeping diversity mandates, employees raise religious objections, and instead of working through the accommodation process that federal law spells out, employers push the objectors out the door. Then the lawsuits arrive, and the institutions lose.
The settlement leaves several questions unanswered. The specific court and docket number for the case were not identified in available reporting. The breakdown of the $410,000 between personal damages and attorney fees was not disclosed. And the names of the UMHW officials who allegedly called Kloosterman "evil" and a "liar" remain unidentified.
What is clear is the sequence: a long-tenured employee with a clean record asked for a religious accommodation, was denied within weeks, and was shown the door with her charts unfinished and her belongings still at her desk. The hospital then spent years in litigation before agreeing to pay six figures and rewrite the very policies it had used to justify the firing.
Title VII has been on the books since 1964. Employers who treat it as optional tend to find out the hard way that it is not.
