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Insight Health System has agreed to pay $5.1 million to resolve a federal lawsuit involving approximately 800 union workers released as part of Insight's mass layoffs in March 2025.
The Michigan-based healthcare provider's initial payment of $1.5 million into a settlement fund will be made Dec. 31. Twelve payments of $300,000 each will occur through Dec. 31, 2029.
Details of the preliminary settlement were released Monday. The sides originally reached the agreement following an 8 1/2-hour mediation conference April 28.
If approved, plaintiffs' legal fees will account for approximately $1.3 million.
David McCullough, a laid-off Insight Rehabilitation Center Hillside employee and Garrettsville resident, filed his civil lawsuit April 1, 2025. Approximately a week earlier, company officials shuttered Hillside, Insight Foundation of Trumbull and its satellite locations.
He was joined in the complaint by Warren resident Angela Foor, a nonexempt employee at Insight Trumbull; Vanessa G. Satterthwaite, a registered nurse from Niles, who served at Insight Trumbull; and Billie E. Fike, of Howland, who worked in Insight Hillside admissions.
The suit grew to include members of AFSCME Ohio Council 8 and Local 2288, UNA Local 2804 and SEIU District 1199. The affected employees include registered nurses, licensed practical nurses, therapists, classified workers and support staff.
The plaintiffs charged that Insight failed to provide 60 days' advance notice before terminating employees at its medical facilities in Trumbull and Mahoning counties. They also sought lost benefits, which included vacation days.
According to the original complaint, McCullough was among 143 Hillside employees without jobs when operations at all Insight locations, except for its emergency room and limited lab and radiology services, were temporarily suspended March 24. Insight ended all services at 3 p.m. March 27.
The next day, Insight filed a Worker Adjustment and Retraining Notification (WARN) Act notice with the Ohio Department of Job and Family Services that focused on the Hillside facility. Hospital officials told the state they could not guarantee the workers would return to their jobs and would not commit to resuming operations.
McCullough's attorney said Insight did not provide the proper notice under the federal WARN Act. The attorney also claimed Insight deducted employee wages for benefits that were not provided.
"(Insight) claimed that employees were temporarily being 'furloughed' and would remain on the payroll to receive accrued vacation time," the lawsuit states. "However, (Insight has) failed to pay (McCullough) and the Class for accrued vacation time and at least three weeks' worth of wages prior to terminating their employment."
The agreement establishes three tiers of recovery. Of the $5.1 million fund, $1.3 million is set aside for earned, but unpaid, accrued vacation payouts.
Attorneys' fees, service awards and administrator costs will be assessed after the vacation payouts are awarded. According to court paperwork, $1,266,666.67 in attorney's fees and $45,000 in litigation costs and expenses are being sought. They will be deducted from the overall settlement amount.
U.S. District Court Judge Benita Y. Pearson, based in Youngstown, must give her approval to the agreement. Insight has denied any wrongdoing as part of the lawsuit. A request to Insight for comment was not returned as of Thursday afternoon.
In September 2024, a U.S. bankruptcy court judge in Houston gave Insight permission to operate the Mahoning Valley properties as part of Steward Health Care's national Chapter 11 case. The transfer of ownership became official the following month.
Insight officials did not disclose the purchase price.
They tied the March 2025 closures to Steward Health's failure to reimburse the health system for owed payments. An attempt to reopen Insight Trumbull seven months later failed with the Ohio Department of Health eventually acquiring its license to operate.