(CNN) -- A school district in Mississippi has agreed to pay a recent high school graduate $35,000 in damages and adopt a policy prohibiting discrimination based on sexual orientation, according to a statement released Tuesday by the American Civil Liberties Union. The settlement comes after the ACLU sued the school district in Fulton, Mississippi, on behalf of Constance McMillen, a lesbian teen who was told by Itawamba Agricultural High School officials she and her girlfriend would be ejected if they attended the school-sponsored prom.