Terms of the settlement are confidential, but a lawyer for the 38-year-old Campbell says both sides were pleased with the outcome.
A lawyer for Gaby Gibson, who worked for Campbell from November 2005 through January 2006, didn't immediately return a message asking for comment.
Gibson claimed in her lawsuit, filed in Manhattan, that the British catwalker also threatened to charge her with theft after being unable to find a pair of designer jeans.
Campbell denied the claims. She was never charged with any crime in the incident Gibson alleged.
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