Grants Pass School District No. 7 has agreed to pay $650,000 to settle a federal lawsuit filed by two former staff members who were fired for producing a video and website challenging the district’s policy on recognizing students’ preferred gender identities.

The settlement follows a ruling in June by a federal appeals court that found the district had failed to show a “substantial” disruption to the school environment that outweighed the free speech rights of the terminated employees.

A three-judge panel of the 9th U.S. Circuit Court of Appeals also allowed religious discrimination and equal protection claims to proceed against the district, reversing a decision by Oregon Magistrate Judge Mark D. Clarke, who had thrown out the entire case.

Rachel Sager and Katie Medart sued the schoo

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