Dunkin' Donuts Executive Settles with Starbucks for $500k

CANTON, Mass. –  Paul Twohig, newly hired as Dunkin’ Donuts brand operating officer, settled his lawsuit with Starbuck’s Coffee last Friday in the amount of $500,000, in dispute over his non-compete agreement with the Seattle coffee company. The legal battle after Dunkin’ announced Twohig would be joining its company on October 5, following the departure of its president and chief brand officer William Kussell just a few days earlier. Starbucks has been a staunch competitor of the donut chain in recent years.

The litigation was based on Twohig’s resignation seven months earlier, where he agreed not to work for any competitor for 18 months after his departure. He asked to have the non-compete lifted but his request was denied by Starbucks. Twohig joined Dunkin’ anyway.

In addition to undisclosed parties paying the half-million dollar settlement, Twohig has agreed not to reveal any trade secrets or other confidential information to Dunkin’ at any time. According to a Puget Sound Business Journal report, he will complete his initial training but will otherwise not work at Dunkin’ until Jan. 15, 2010.”  According to the Journal, Twohig ran Starbucks retail operations in the Southeastern United States before taking the Dunkin’ job. 

Dunkin’ issued this statement in response to a request for comment:

We are delighted Paul Twohig was able to resolve the matter with Starbucks.  While the terms of the settlement agreement are private, he continues to train and learn our systems by working in the stores and being with our field team.  We look forward to having him assume leadership of our operations team beginning January 15.  Paul is a distinguished leader with extensive experience from some of the industry’s most respected and prominent brands, and we believe he will play a key role in helping us meet the needs of both our customers and our franchise community to continue our brands' growth and success."

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