Dunkin' Donuts Pays Its Way Out of Starbucks Manager's Noncompete Promise

The Puget Sound Business Journal is reporting that Paul Twohig ran Starbucks retail operations in the Southeastern United States before taking the Dunkin’ job.

By switching companies, Starbucks alleged, Twohig violated an agreement in which he had said he would not work for a rival for 18 months. He left Starbucks in March and asked to have the non-compete lifted, but was denied.

“As part of the settlement Mr. Twohig will complete initial training but will otherwise not work at Dunkin’ until Jan. 15, 2010,” Starbucks said in a statement quoted by the Puget Sound Business Journal. “In addition Starbucks will be paid $500,000. Mr. Twohig also reconfirmed his commitments not to share Starbucks trade secrets and other confidential information with Dunkin’ at any time.”

So, per this report, Starbucks gets the benefit of some of the 18-month term in its noncompete promise from Mr. Twohig and they also get $500,000 for the effort.

Buy-outs of remaining term of a noncompete are not out-of-the-ordinary in the business world and they represent efficient legal solutions to often messy litigation.