EXCLUSIVE: Indiana school counselor fired for speaking out on gender identity policy settles lawsuit for $200K
FIRST ON FOX — An Indiana school counselor who was fired for speaking about her institution's gender identity policy has settled a lawsuit for $200,000.
"I am thrilled to see this case settled, but most of all I am grateful that Indiana law now requires the South Madison Community School Corporation to notify parents about a child’s request to change his or her name or pronouns," Kathy McCord said in a statement to Fox News Digital.
McCord, who worked for 37 years in the education field, filed a lawsuit in 2023 after she was fired for speaking to the media about the central Indiana district's transgender support plan.
"Because of that, South Madison can no longer force other educators to lie and keep secrets about children from their own parents," McCord said. "When I spoke out on my own time in my personal capacity, I did so because I understood how important it is for parents to be involved in all matters of their child’s life — especially when their child is struggling. I loved and cared for students for over 37 years. Despite decades of success as a teacher and school counselor, I was fired after simply expressing my beliefs on an important topic, which were different than the school district’s. No public-school employee should be fired for expressing her personal beliefs or be forced to lie to students or parents."
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In August 2021, the South Madison Community School Corporation enacted a gender identity policy that made counselors and others use names and pronouns for students that do not correspond with their sex, without requiring parental notification or consent, according to Alliance Defending Freedom, and, in some instances, even required employees to hide these new names and pronouns from parents.
ADF alleged that the policy did not require parental consent, or even parental notification, to change a student’s name and pronouns.
On a form, students who questioned their gender identity could mark if parents knew or supported their gender identity status. However, the school board had reportedly stated during a board meeting that the district's gender support plan was not kept from parents and that parents could procure copies.
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Vincent Wagner, senior counsel at ADF, told Fox News Digital that he hopes the case settlement, which was made final between the two parties on March 25 and filed to the U.S. District Court for the Southern District of Indiana on Tuesday, will encourage others to use their constitutional rights.
"Our client, Kathy McCord, was fired after expressing her personal beliefs — speaking on her own time in her personal capacity out of concern for her students — based on her unwillingness to lie to parents," Wagner said. "Kathy knows what should be obvious to everyone: When a student struggles with gender, sexuality, or any other important issue, parents should be included so they can make the best decision for their child. Schools should actively partner with parents, not cut them out. Lying to and hiding information from parents violates their constitutional rights. And it can send struggling children down a one-way path to irreversible harm."
Wagner added, "We are excited to settle this case and hope this settlement encourages public schools around the country to put an end to unconstitutional policies that violate educators’ and parents’ rights."
In a statement to Fox News Digital, the South Madison Community School Corporation said that SMCSC "has concluded the lawsuit filed by former employee Kathy McCord. In August 2025, the Court ruled in favor of SMCSC on the majority of Ms. McCord’s claims, including a finding that the District did not violate her First Amendment rights."
SMCSC added that, "While the District feels confident it would have prevailed on the only remaining claims if they had proceeded to trial, the parties have now reached a settlement. SMCSC chose to settle to avoid the significant time, expense, and disruption of continued litigation and to allow the District to remain focused on serving students. SMCSC has not admitted any wrongdoing, and the Court made no findings of liability against the District. SMCSC remains focused on its mission of supporting students, staff, and the entire school community. The district appreciates the continued support of its families and community members."