The University of Texas system has settled a lawsuit with the Texas Faculty Association, which had accused the system’s governing board of holding an illegal closed-door meeting that resulted in a decision authorizing the layoffs of up to 3,800 employees at the University of Texas Medical Branch, in Galveston, the Austin American-Statesman reported.

The system admitted no wrongdoing, but agreed to pay $22,500 in legal fees to the lawyer for the faculty group, which represents faculty members and support staff members. It also agreed that for the next three years, it will give laid-off employees preference for openings if the workers are qualified for those positions.

The island medical campus ended up laying off 2,450 employees, but has begun rehiring some.

The faculty group sued the system in December, accusing its governing board of violating the state’s Open Meetings Act. The system contends the meeting was legal and the layoffs were necessary because of the heavy damage and economic toll caused by Hurricane Ike in September.

“You’ve got to pay something to settle a lawsuit,” said Barry Burgdorf, vice chancellor and general counsel for the university system. “It’s frankly a very small price to pay to not have to go through” a potentially-expensive legal battle.

Mr. Burgdorf told the Houston Chronicle that the agreement to give laid-off employees priority in hiring was already the policy of the Galveston medical branch. —Katherine Mangan