A former University of Michigan health care worker, who says she was fired after requesting a religious exemption from providing gender-affirming care, will be able to continue her case in court, rather than move to private arbitration.
That’s according to a ruling from the U.S. Court of Appeals for the Sixth Circuit on Wednesday. The court didn’t weigh in on the merits of the claims of the former employee, Valerie Kloosterman. The same case has also been taken up by the Trump administration, with the U.S. Department of Health and Human Services launching an investigation into the health system in June. The University announced this week it would no longer offer gender-affirming care to minors, citing federal pressure.
Kloosterman started working as a physician assistant for Metropolitan Hospital in Caledonia, Michigan, in 2004. When the hospital merged to become part of University of Michigan Health-West in 2021, Kloosterman took part in a "mandatory diversity training," according to a federal suit she filed in 2022.
That training "attempted to compel Ms. Kloosterman to pledge, against her sincerely held religious convictions and her medical conscience, that she would speak biology-obscuring pronouns and make referrals for 'gender transition' drugs and procedures,” her suit claims. Kloosterman claims she sought a religious exemption, but was fired.
The health system has denied all allegations in a filing responding to the suit, claiming it never required Kloosterman to care for patients she wasn’t comfortable seeing.
Instead, the health system's filing said, Kloosterman "admitted that after she began treatment of patients whom she knew to identify as lesbian and other patients who may seek 'puberty blockers,' 'hormone therapy,' or 'gender assignment surgery,' she would then refuse to refer patients to other medical providers" if she objected. That, the health system said, put them in violation of federal laws requiring medical treatment to be “free from discrimination.”
In 2024, U.S. District Judge Jane Beckering dismissed Kloosterman's case, ruling in favor of the health system, which argued it should be settled in private arbitration. Kloosterman's lawyers filed an appeal with the U.S. Court of Appeals for the 6th Circuit, which ruled on Wednesday that the health system couldn’t force the case into arbitration.
That’s because the health system didn’t seek to arbitrate Kloosterman’s case until after it had already asked the lower court to dismiss Kloosterman’s claims based on the merits, the ruling said:
“But the court declined to dismiss several of them. Only at that point—after a year of litigation and after the defendants got a preview of how the merits might progress in court—did they seek to arbitrate. We conclude that this request came too late, primarily because the defendants sought to avoid arbitration altogether by asking for a complete judicial victory. Specifically, we hold that the defendants lost their right to arbitrate under the Federal Arbitration Act…We thus reverse the district court’s decision to dismiss this suit in favor of arbitration.”
The case will now return to district court, where “we will litigate the merits of Valerie's claims,” said Kayla Toney, an attorney with the First Liberty Institute, which describes itself as “the largest legal organization in the nation dedicated exclusively to defending religious liberty for all Americans.”
“Today’s decision is a reckoning for institutions that discriminate and punish caring people of faith like Valerie Kloosterman,” Toney said in a statement. “It was intolerant of University of Michigan Health to fire Valerie because of her religious beliefs, and now the Sixth Circuit has recognized that they cannot avoid accountability by hiding the case in arbitration.”
A spokesperson for Michigan Medicine said Wednesday they “can’t provide any information on pending litigation.”
Editor's note: U of M holds Michigan Public's broadcast license.
