Seven former Erlanger Health System police officers have sued the hosital in Circuit Court.
The suit says they were fired either due to age or race and the firing was contrary to a security assessment of the hospital.
Last year, Erlanger shut down his police unit and hired Walden Security in its place.
The suit was filed by Jerry Lawrence, Gary Talley, Harold Holliday, Kenneth Cookston, Ronald Capetz, Gary Avans and Rodney Patton.
Pat Charles, Erlanger spokesperson, said, "Erlanger has every intention of vigorously defending itself against the plaintiffs' allegations.
"First, Erlanger did not fire any of these officers.
All Erlanger officers had the opportunity to apply with Walden Security to work at one of Erlanger's five campuses. Several of those officers applied with Walden Security and continue to work at Erlanger. Our HR department looked at a variety of options to ease the transition for those who might have had concerns about severance, retirement and pension benefits. All Erlanger officers who declined to take advantage of the opportunity to either apply for positions at Walden Security, or apply for open positions at Erlanger were offered appropriate options, and treated equally based on years of service.
"Erlanger's primary objective - in moving to a professional security firm - was a commitment to the safety and security of its patients, employees, physicians and visitors. This was not done as a cost-savings measure.
"The Walden Security hiring model ensured that Erlanger would have a staffing complement that included armed officers and officers with arrest capabilities.
"Managing a security operation for a rapidly growing, five campus health system is not one of Erlanger's core competencies. Hence the decision to hire a professional security agency - as many health systems locally and around the country have done.
"Erlanger officials took into account all of the factors that need to be considered when looking at a sustainable and appropriate complement of security officers. As the security situation changed over the years, Erlanger chose the option that was in the best interest of its patients, employees, physicians and visitors. When the city would no longer commission our officers, Erlanger had to consider viable options in order to maintain the security of our campuses."