The error you are asking about refers to overlapping legend with the tStop layer. All that will happen is that parts of the legend that overlap with the tStop area won't get printed. So it depends on what your priorities are. tStop layer takes precedence. This document explains it well in the PCB legend section on page one.

http://www.element14.com/community/servlet/JiveServlet/download/74276-111817/eagle-cad-layers-reference3.pdf

If you want all the names printed clearly, you can use the smash tool to separate the names of your parts and move them into clear space.