If this were a Muslim school, CAIR would be there to defend it. Heck, there would be huge support from the Muslim community.
As for this Catholic school.... I’d like to see how the Catholic church responds if a lawsuit were brought...
Depends on if the school is a stand alone corporation, associated with a parish corporation, or if it is part of the diocese corporation.
At each level, the response will be “What is the best sounding with the least amount of financial risk”.