Chet Poulton and David Scholes sued Cannon and the company, launched with more than $1 million of Cannon's money, claiming they hadn't been paid for months at a time as the political consulting firm closed.

Both sides in the dispute said they could not comment on the settlement.

“That's accurate” that it has been settled, said Poulton, the former creative director of C Four Communications, who claimed he was owed as much as $87,500 in back wages. “That's about all I can say.”

Scholes claimed in the suit that he was owed $36,000.

Cannon's chief of staff, Joe Hunter, said Wednesday that he had no comment.

Oral arguments in the case were scheduled for Wednesday before 4th District Judge Lynn Davis, but attorneys notified the judge that the matters had been resolved, according to a brief entry in the case record.

Cannon had sought to seal the records in the case, claiming the plaintiffs planned to use them for political blackmail.

Cannon had put up $1 million to back the consulting firm, created to try to organize an Internet-based network of conservative activists who could be tapped for fund raising and political support.

But Cannon asserted that he had no role in the company's operations and walked away from his investment in an effort to avoid any appearance that he was using his position in Congress to help the firm.

Poulton said when he filed the suit that Cannon was calling the shots, sitting in on meetings and phone calls.

Former C Four employee Mark Stoddard had settled a $40,000 lawsuit against the company over unpaid wages in 2002. Chuck Muth, a political consultant who worked for C Four, complained that he also was stiffed, which Cannon denied.