Document Management

Paychex Won't Appeal $26 Million Judgment

Parent Category: ROOT
Thursday, 25 March 2010
Published Date
Written by The Progressive Accountant

Paychex logoPaychex will not appeal a judge's decision that upheld a two-year-old jury verdict involving its 2001 decision to stop supporting the payroll processing software of Rapid Payroll, a company that Paychex had acquired in 1996. In a suit brought by a Rapid Payroll licensee, the company will pay $15 million in compensatory damages and $11 million in punitive damages awarded by the jury. Paychex decided to ended the case after the California's Court of Appeal upheld the  jury verdict on March 9. The company had notified its licensees in August 2001 that it would stop supporting the Rapid Pay software in August 2002.

Paychex said the communication stemmed from the fact the licensee contracts were unfavorable to the company. That action produced suits by licenses that included claims such as breach of contract and related tort and fraud causes of action. Suits with 75 of 76 licensees had been settled prior to this court case.

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