Indiana school district settles with counselor fired for leaking gender policy

An Indiana school district agreed to pay a fired counselor nearly $200,000 to settle a lawsuit over the district’s gender identity policy, legal nonprofit Alliance Defending Freedom said Wednesday. South Madison Community School Corporation will pay for damages, attorneys’ fees, and costs to Kathy McCord, a former counselor at Pendleton Heights High School in Madison County. The school board unanimously voted to terminate McCord in 2023 after she spoke to a journalist about the district’s gender identity policy. McCord sued the district later that year, contending the termination violated her free speech and religious rights.

Calling it regrettable that McCord has been in a court battle for three years, Alliance Defending Freedom attorney Vincent Wagner said he was pleased with the settlement. Wagner added that no educator should be fired for expressing her beliefs. McCord and the district filed for joint stipulation of dismissal Monday to officially bring the case to a close.

What has the school district said about the settlement? The district said in a statement that it felt confident it would have ultimately won the case, according to local media outlet WTHR. It cited a ruling from August 2025, which denied McCord’s free speech claims but left her religious claims undecided. The district said it settled to avoid the significant time, expense, and disruption a continued legal battle would bring.

What led to McCord’s termination? In November 2022, McCord spoke with The Daily Signal about the school district’s gender identity policy. The policy was not publicly known at the time and allowed students to change their name and pronoun without parents being informed or giving consent, according to McCord. The school board fired McCord, claiming she edited the policy that she shared with the news site.

Two years later, state lawmakers passed a law that required schools to notify parents of student name and pronoun change requests. This ended Madison Community School Corporation’s policy.

Dig deeper: Read Christina Grube’s report on an Indiana teacher who received a $650,000 settlement after his attorneys say he was fired for his religious beliefs.