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Ex-Square COO Keith Rabois. Photo via Flickr (Tech Crunch)

Square COO Keith Rabois is departing the mobile payments company due to sexual harassment allegations.

Rabois penned a blog post about his decision, denying the allegations but saying that he did not want this situation to be a distraction for the company. He says he was in a physical relationship with another Square employee, but then states these “facts”:

“(1) The relationship was welcome. (2) Square did not know of the relationship before a lawsuit was threatened; it came as a complete surprise to the company. (3) He never received nor was denied any reward or benefits based on our relationship. And (4), I did not do the horrendous things I am told I may be accused of. While I have certainly made mistakes, this threat feels like a shakedown, and I will defend myself to the full extent of the law.”

Kara Swisher over at AllThingsD sat down with Rabois this afternoon and it appears Square is backing him in the expected coming lawsuit.

Rabois says he’s “already working on something new” and will announce that news next month.

Square is one of Starbucks’ biggest partners. The two companies formally rolled out their partnership to allow coffee lovers a new way to pay for their java three months ago and announced last month that customers can now buy Square mobile card readers at Starbucks’ 7,000 coffee shops.

Starbucks has already partnered with Square to process transactions in its stores and invested $25 million in the company last August, promising to change the way people pay for their coffee and dramatically increase the footprint of the San Francisco-based startup.

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