Palo Alto School District Approves $3.25M Payout to Veteran Teacher

Settlement ends long-running case over unsubstantiated assault allegation against PE teacher Peter Colombo

Published on Feb. 15, 2026

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The Palo Alto Unified School District has approved a $3.25 million settlement with veteran physical education teacher Peter Colombo, who sued the district after criminal charges against him were dropped and an outside investigation found the underlying allegation unsubstantiated. The settlement ends a years-long dispute that sharply divided the local community.

Why it matters

The case highlights the challenges school districts can face in balancing due process, community concerns, and liability risks when dealing with serious allegations against teachers. The payout also raises questions about how the district will cover the multimillion-dollar settlement, potentially through insurance or other funding sources.

The details

Colombo, a 27-year district employee, was arrested and charged in 2022 after the district received an email alleging he had raped a middle school student during the 2001-02 school year. However, prosecutors later declined to move forward with the criminal case. An outside investigation concluded the allegations were unsubstantiated. Colombo then filed a civil lawsuit against the district, accusing it of retaliation and civil rights violations. The $3.25 million settlement was approved by the school board in a closed-session meeting, though details on the funding source remain unclear.

  • In January 2022, the district received an email alleging Colombo had raped a student in 2001-02.
  • Colombo was arrested and charged in 2022.
  • In May 2024, an outside investigation concluded the allegations were unsubstantiated.
  • Colombo filed a civil lawsuit against the district in February 2024.
  • The $3.25 million settlement was approved by the school board in early 2026.

The players

Peter Colombo

A 27-year veteran physical education teacher in the Palo Alto Unified School District who sued the district after criminal charges against him were dropped and an investigation found the underlying allegation unsubstantiated.

Palo Alto Unified School District

The school district that approved a $3.25 million settlement with teacher Peter Colombo to resolve his lawsuit against the district.

Evan C. Nelson

The lead attorney who represented Colombo and secured the $3.25 million settlement.

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What they’re saying

“$3.25 million settlement for Colombo, who has roughly 27 years of service in the district.”

— Evan C. Nelson, Colombo's lead attorney (Evan C. Nelson's law firm website)

What’s next

The details of how the Palo Alto Unified School District will cover the $3.25 million payout, whether through insurance or other funding sources, remain unclear and will likely be an area of continued public interest.

The takeaway

This case underscores the complex challenges school districts face in balancing due process, community concerns, and liability risks when dealing with serious allegations against teachers. The multimillion-dollar settlement raises questions about the financial implications for the district and highlights the need for clear policies and transparency around such sensitive personnel matters.