I’ll bet you a dollar that there’s a law somewhere that covers this. Especially in California.
As someone else mentioned, teachers, especially private school teachers, are generally on contracts that have to be renewed annually. That is because, if the enrollment declines, they have to reduce staffing. Since the diocese has been paying her and will continue to pay her until August (probably the end of her contract), technically she is not being fired - her contract is not being renewed. There is no law I have ever seen that would require a private employer to renew a contract that has expired, especially with an employee whose presence could pose a danger to the staff and students at the site.