Payroll and benefits outsourcing provider Paychex Inc. said a combination of the shaky economy and a litigation expense charge of $18.7 million contributed to a 14 percent decline in third-quarter earnings, to $112 million, versus the year-ago period.

Paychex reported that systemwide revenues fell 4 percent in the third quarter, to $508 million, while its core payroll service revenue decreased 6 percent, to $358.3 million for the same period of one year ago.

The litigation expense stems from a 2007 verdict that found the company guilty of insider information and unfair tactics against a competitor. That ruling was recently upheld by a California appeals court.

The company said its client base has declined 2.1 percent since May, and new sales units fell 6 percent in year-over-year comparisons.

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