An Indiana school district agreed to pay nearly $200,000 to settle a federal lawsuit filed by a former counselor who was fired after speaking to a journalist about her objections to the district's gender identity policy.

The South Madison Community School Corporation, located about 35 miles northeast of Indianapolis, agreed to pay Kathy McCord $195,000 in damages, attorneys' fees, and costs, the Alliance Defending Freedom, which represented McCord, announced Wednesday.

"South Madison can no longer force other educators to lie and keep secrets about children from their own parents," McCord told Fox News Digital.

"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," she said.

"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," McCord continued.

"No public school employee should be fired for expressing her personal beliefs or be forced to lie to students or parents."

McCord was fired in January 2023 after she refused to comply with a district directive created in August 2021.

The policy required counselors and other employees, upon a student's request, to use names and pronouns that did not correspond with the student's biological sex, without notifying parents or seeking parental consent. McCord claimed the policy required her to speak in ways that violated her religious beliefs.

When a reporter from The Daily Signal asked McCord about South Madison's directive, she confirmed the accuracy of information he had gathered from other sources. About a month after the story was published, the district fired McCord.

"No American should be fired for expressing her beliefs, especially not an educator speaking in her personal capacity, on her own time, and out of concern for her students," senior counsel Vincent Wagner said in a statement.

"Kathy knows that kids do best when schools and parents work together. But South Madison left parents in the dark," he continued.

"It's regrettable that South Madison made Kathy endure three years of litigation to get to this point, but we are pleased with this result for Kathy."

Parents were unaware of the gender identity policy, and the lawsuit stated the district "never publicized its existence or allowed the public to review a blank copy — a fact the School Board confirmed" at a Dec. 8, 2022, meeting.

Shortly after McCord's lawsuit was filed, Indiana enacted a law requiring schools to notify parents if a student requests a name or pronoun change. The law prompted South Madison to rescind its directive.

But when McCord worked for South Madison, the law firm said, the district required counselors like her to use a form called a "Gender Support Plan." The form documented when the school began using cross-gender names or pronouns for a student and whether parents would be notified.

South Madison did not require parental consent, or even parental notification, to change a student's name and pronouns, according to the law firm. The district also began using Gender Support Plans without consulting the school community or parents at a board meeting and without posting the policy on the district's website.

"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," McCord told Fox News Digital.

The school district told WXIN-TV in a statement that it "chose to settle to avoid the significant time, expense and disruption" a trial would have caused. The district said it was "confident" it would have won at trial but chose to pay McCord.

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