Former employees of two Kansas hospitals who claimed they didn't receive promised separation benefits after the hospitals were sold to Ontario, Calif.-based Prime Healthcare Services in 2013 have agreed to settle their class-action lawsuit, according to a KCUR report.
The proposed $550,000 settlement was disclosed in documents filed in federal court in Kansas City, Kan. If approved by the court, the settlement would end a case brought by 49 former workers of Providence Medical Center in Kansas City and Saint John Hospital in Leavenworth, Kan., according to the report.
Prime is named as a defendant in the lawsuit, as is Denver-based Sisters of Charity of Leavenworth Health System, the former owner of the hospitals, and several Prime subsidiaries and benefit plan administrators.
According to the lawsuit, which is cited in the report, the Sisters of Charity laid off about 24 employees before the sale was completed and paid them severance. However, after the sale closing date, another 49 employees were terminated but not awarded severance pay.
The suit alleged Prime put off announcing the layoffs to avoid their financial impact on the deal, the report reads.
According to KCUR, U.S. District Judge Carlos Murguia has given preliminary approval to the settlement and will hold a hearing Jan. 5, 2016, to determine whether it is "fair, reasonable and adequate."
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