Mr Jarrar, a US resident, was waiting to board a flight at New York's JFK airport wearing a T-shirt that read "We Will Not Be Silent" in English and Arabic.
The airline, JetBlue, ordered him to remove his T-shirt saying other passengers felt uncomfortable with the Arabic slogan.
He eventually agreed to cover the shirt and boarded the plane, but he was made to sit at the back of the plane.
He went to court. The Transport Security Authority and JetBlue airlines agreed to settle the case, paying out a total of $240,000 in compensation.
This is not an isolated incident. Last week, a Muslim family was ordered off a domestic US flight operated by AirTran airlines after passengers claimed they were making suspicious remarks about security.
The family members were later cleared by the FBI, but were not permitted to fly with the airline to continue their journey. (Full)