He had sued the Japanese communications giant for discrimination and harassment. Dentsu threatened to bring counterclaims.
Biegel was fired by Tim Andree, the Dentsu America chief, in November 2006. Biegel had alleged that Toyo Shigeta, Dentsu's top US executive, had forced him to visit a Japanese brothel and to watch him photographing women on a Brazilian beach.
A joint statement said all claims and potential counterclaims had been withdrawn and that both parties had retracted all public statements.