Hurley Medical Center of Flint and four nurses who sued said Friday the lawsuit was "amicably resolved."
The hospital said the conduct wasn't consistent with hospital policies, and that it "fundamentally opposes" racial discrimination.
The suit was filed by nurse Tonya Battle, who alleged a note was posted on an assignment clipboard reading, "No African-American nurse to take care of baby."
Battle said it was later removed, but that black nurses weren't assigned to the baby's care.
Battle and the hospital said the father showed Battle's supervisor a swastika tattoo.
The other three nurses recently joined the suit. A related lawsuit isn't part of the settlement.