Tonya Battle, an African-American nurse at Hurley Medical Center in Flint, said she was caring for the infant at the time of the father's request -- which the nurse manager allegedly complied with.
After the man asked that no African-American staff members care for his child, he allegedly showed off a swastika tattoo.
Battle and hospital officials announced the settlement Friday at a news conference, The Detroit News reported.
Terms of the settlement were not reported.
Beyonce flaunts bikini body, Blue Ivy in vacation pics
Kate Middleton recycles dress at movie premiere