The terms of the settlement between Gannondale and former bookkeeper Sharon L. Shepherd were not made public.
Gannondale's lawyer, Arthur Martinucci, of Erie, and Shepherd's lawyer, Samuel J. Cordes, of Pittsburgh, each declined to comment, citing a confidentiality agreement.
The case, Martinucci said, was resolved to the mutual satisfaction of the parties.
According to court records, Shepherd was seeking damages, including more than $37,000 in back pay.
Gannondale, at 4635 East Lake Road, was a ministry of the Sisters of Our Lady of Charity. Faced with declining court placements and funding cuts, it closed in June.
Shepherd, who was hired in October 2011, said the dispute arose a year later when Gannondale adopted a therapeutic model of care known as the "sanctuary model," which emphasized "growth and change."
She said that a commitment to growth and change and the model's belief in social change and evolution violated her religious belief in predetermination. "She believes that Armageddon is coming and there is nothing anyone can do to stop judgment day from taking place," Shepherd's pretrial statement said.
Shepherd said she also objected, among other things, to the model's "anti-Christian content," including its references to religious leaders and those she called "idolators," including "Buddha, Martin Luther King, and Gandhi."
She first told a human resources manager in November 2012 that the community meetings interfered with her religious beliefs. The human resources manager initially told her that she did not have to attend the meetings. But in May 2013 her supervisor then told Shepherd she would be fired if she did not attend the meetings.
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