What the Lawsuit Alleges
The Michigan Nurses Association has taken the closure of a century-old rural hospital to federal court, alleging that the workers who kept it running learned it was ending three days before the doors shut.
The union filed suit on July 10 in the U.S. District Court for the Western District of Michigan, alleging that Sturgis Hospital violated the federal Worker Adjustment and Retraining Notification Act, according to Becker's Hospital Review. The complaint states that the hospital notified the union on June 16 that it would cease all operations on June 19, laying off most employees, including all MNA-represented nurses.
The union represents approximately 17 registered nurses at the hospital. Court filings say 50 or more full-time employees lost their jobs in the shutdown. The suit seeks 60 days of back pay, reimbursement for lost benefits, and attorney fees and costs.
"Sturgis Hospital, which was known to struggle financially for years, should have followed federal law, which we believe required it to give employees 60 days' notice of closure; instead, it gave employees, including nurses who worked there for decades, just 72 hours, causing significant hardship for them," MNA Executive Director Janella James said in a statement to Becker's.
Reporting by WMUK describes the same sequence, with the union alleging hospital leadership gave three days' notice. The hospital has not publicly responded to the allegations, and none of the claims has been tested in court.
What the WARN Act Requires and Where the Exceptions Sit
The legal question in this case is narrower than the political argument around it, and it turns on whether an exception applies.
The WARN Act generally requires employers with 100 or more employees to provide 60 days' written notice before a plant closing or mass layoff. The law recognizes limited exceptions. A faltering company actively seeking capital or business that would avoid or postpone the closure may give shortened notice if it reasonably believes advance notice would hurt its ability to secure that financing. Notice may also be shortened for business circumstances that were not reasonably foreseeable, or for a natural disaster. In every case, notice must still be given as soon as practicable.
The complaint alleges that Sturgis Hospital did not qualify for any exemption. That is the contested point. A hospital that spent years publicly searching for a buyer has a plausible faltering-company argument available to it, and also faces the counterargument that a long-running search makes closure foreseeable rather than sudden. Which framing prevails is a question of fact for the court.
Damages under the statute are calculated per day of violation, which is why the union is seeking a full 60 days of pay and benefits rather than a lump sum.
The Financial Picture Behind the Closure
The hospital's own account of why it closed is not in dispute, even if the timing is.
In a statement posted June 16, Sturgis Hospital said it would stop seeing patients at noon on June 19 after "many years of ongoing financial challenges facing rural healthcare providers, including declining reimbursement rates, rising operational costs, and a sustained decrease in patient utilization." It said that despite extensive efforts including pursuing acquisitions and partnerships, "a sustainable path forward could not be achieved."
The hospital had already been shrinking for years. It discontinued obstetrics and hospice in 2018. In 2022, the Sturgis City Commission approved a $645,000 loan from American Rescue Plan funds. In 2023, the hospital converted to the federal Rural Emergency Hospital model, a designation created to preserve emergency and outpatient services in communities that cannot sustain a full hospital, and discontinued inpatient services as part of that restructuring. Later that year, it entered an agreement involving for-profit Asker Corp., which included eliminating $8.5 million in remaining rent obligations in exchange for a $3 million payment. The acquisition was never completed before the hospital closed.
Publicly reported figures suggest the gap was substantial. A review of the hospital's 2024 Medicaid cost report published by the World Socialist Web Site reported $15.4 million in revenue against $23.2 million in expenses, a deficit of nearly $8 million, along with negative net assets of $48 million. MedicalDaily has not independently examined that filing, and the figures should be treated as reported rather than confirmed.
What the Closure Means for St. Joseph County Patients
The workforce claim is the legal story. The access consequence is the health story, and it reaches further.
The closure ended the emergency department, endoscopy, surgery, laboratory, medical imaging, physical therapy, cardiac rehabilitation, outpatient clinics and ancillary departments, according to Healthcare Finance News. Sturgis is now listed by the North Carolina Rural Health Research Program's Sheps Center as a 2026 rural hospital closure with no services remaining, within a national tally the center puts at 154 rural hospital closures and conversions.
The detail worth pausing on is that Sturgis had already taken the federal lifeline designed to prevent exactly this outcome. The Rural Emergency Hospital model was built to keep emergency access open in communities that cannot support inpatient care. Sturgis converted, and closed anyway three years later. That does not indict the program, but it does show its limits when the underlying revenue base is too thin.
Becker's counts Sturgis as the fourth hospital closure of 2026, following 23 in 2025 and 25 in 2024. For residents, the practical effect is longer transport times for emergencies and the loss of local imaging, laboratory and rehabilitation services that people used routinely.
What Happens Next
The case is pending in the Western District of Michigan, and no hearing date has been publicly reported. Sturgis Hospital will have an opportunity to respond to the complaint, and its answer will likely indicate whether it intends to argue that a WARN Act exception applies.
Displaced workers in Michigan can pursue unemployment benefits through the state, and health coverage continuation options may be available through COBRA or a special enrollment period on the state marketplace triggered by loss of employer coverage. Former patients seeking medical records from a closed hospital should contact the hospital's remaining administrative contact or the Michigan Department of Licensing and Regulatory Affairs for guidance on records custodianship.
MedicalDaily will track the hospital's response to the complaint, any ruling on whether a WARN exception applies, and whether another operator moves to restore services in Sturgis.
Frequently Asked Questions
What does the lawsuit claim? That Sturgis Hospital violated the WARN Act by notifying the union on June 16 that operations would end June 19, roughly 72 hours later, rather than providing 60 days' notice.
What is the union asking for? Sixty days of back pay, reimbursement for lost benefits, and attorney fees and costs for the affected nurses.
How many workers were affected? Court filings say 50 or more full-time employees lost their jobs. The Michigan Nurses Association represents approximately 17 registered nurses at the hospital.
Does the WARN Act always require 60 days? No. Exceptions exist for faltering companies actively seeking capital, unforeseeable business circumstances and natural disasters. The complaint alleges none applies here. That is the contested question.
Why did the hospital close? It cited declining reimbursement rates, rising operational costs and a sustained decrease in patient utilization, and said no sustainable path forward could be found despite pursuing acquisitions and partnerships.
What services did the community lose? The emergency department, endoscopy, surgery, laboratory, medical imaging, physical therapy, cardiac rehabilitation and outpatient clinics.
Has the hospital responded to the lawsuit? No public response to the allegations has been reported. The claims remain untested in court.
