TeamStaff, which had revenue of about $500m (£326m) in the first nine months of its current financial year through 30 June, said it will keep the financial applications it licensed from Lawson last August. But the company plans to return Lawson's payroll and human resources software and look elsewhere for that technology.
The outsourcing unit handles human resources for about 3,700 small and midsized businesses with a total of more than 55,000 employees.
TeamStaff claimed in its suit that the software did not conform to a list of specifications built into its contract, and the company also contended that Lawson knew it could not meet TeamStaff's requirements and had refused to provide fully functional software under the original terms of the contract.
Donald Kelly, TeamStaff's chief financial officer, said that TeamStaff plans to start implementing Lawson's financial applications early next year and is evaluating human resources software from other vendors.
Lawson is "pleased that we were able to reach a friendly resolution" that keeps TeamStaff as one of its customers, said Terry Blake, a spokesman for the software vendor. "We're looking ahead to working with TeamStaff to implement Lawson's financials," he said.