Barrett Business Services Inc. (NASD: BBSI) on Oct. 26 agreed to settle a class-action lawsuit for $12 million. The lawsuit was filed on behalf of shareholders in November 2014.

According to the settlement, which is subject to approval by the US District Court for the Western District of Washington, the Vancouver, Wash.-based PEO and staffing firm’s insurance carriers will pay approximately $8.7 million and the company will pay approximately $3.3 million. 

The lawsuit alleging Barrett CEO Michael Elich and former CFO James Miller violated federal securities laws. The suit arose after the company’s stock price plummeted on the heels of its announcement of increased workers’ compensation reserves. Barrett terminated Miller in March of this year after the executive told the company’s audit committee that unsupported journal entries were made in 2013.

“The board of directors has chosen to settle this case to avoid the cost and distraction associated with prolonged litigation,” Chairman Anthony Meeker said. “More importantly, putting this lawsuit behind us allows the Company to focus on our core business while positioning the organization for future growth.”

The settlement covers shareholders who purchased or acquired shares of the company’s common stock beginning Feb. 12, 2013 through March 9, 2016.

Barrett will pay for the settlement with available resources and expects the payment to occur in the fourth quarter of 2016, and expects to record a pre-tax charge of approximately $3.3 million in the third quarter in connection with the proposed settlement.