Coopers & Lybrand Settles Spanish Hiring Lawsuit
April 03, 2011
MADRID -- After eight months of legal battling, auditor Ernst & Young agreed to pay rival Coopers & Lybrand a sum that wasn't disclosed, ending Spain's biggest-ever employee-poaching scuffle. In a joint statement, Coopers & Lybrand said it would drop legal action against Ernst & Young in exchange for ``monetary compensation.'' Neither auditor would reveal any further information about the agreement or the amount paid, which news reports estimated near $5 million. In the statement, Ernst & Young said it ``regrets the situation created.'' The litigation began in November when Coopers & Lybrand filed suit in a Madrid court, alleging that Ernst & Young had poached 91 employees from its highly profitable consulting division, including six partners and three directors. Coopers & Lybrand charged that when Ernst & Young hired the employees, it violated a 1993 Spanish law on unfair competition, which stipulates that departing personnel must notify their firms three months before leaving or risk losing part of their salary. Then, a judge ordered Ernst & Young, who maintained it had ``acted within the ethical principles of professional activity,'' to delay the partners' contracts for six months as a cautionary measure. After a Madrid court upheld the judge's decision earlier this month, the two parties settled the dispute away from the bench.
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