Starbucks Ordered to Pay Former Manager $25 Million

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Starbucks has been ordered to pay $25.6 million to former Starbucks regional director Shannon Phillips who sued the coffee giant for wrongful termination, claiming she was terminated for being white.

Why Was Phillips Terminated?

Phillips, who oversaw dozens of Starbucks coffee shops, was fired by the company after a 2018 incident that took place at a Starbucks in the Rittenhouse Square neighborhood of Philadelphia. The incident involved two black men who were waiting on a third party for a business meeting at Starbucks when one of the men, Rashon Nelson, was denied permission to use the bathroom because he had not purchased anything. A store employee approached Nelson and his business partner, Donte Robinson, asking them if they needed help. Nelson and Robinson denied they needed help, and shortly after, police arrived and arrested them. Their arrests were captured on video and shared widely, resulting in protests. Starbucks closed thousands of stores nationwide to hold anti-bias training for approximately 175,000 workers.

As the regional manager, Phillips was fired, while the manager of the Rittenhouse Square Starbucks, who was black, kept his job. Phillips sued Starbucks in 2019, alleging that race had been a determinative factor in her termination. She argued that “upper management of Starbucks were looking for a ‘scapegoat’ to terminate to show action was being taken” following the 2018 incident involving the two black men. The complaint also stated following the arrest, Starbucks “took steps to punish [w]hite employees who had not been involved in the arrests, but who worked in and around the city of Philadelphia, in an effort to convince the community that it had properly responded to the incident.” Starbucks denied the claims, arguing that Phillips “appeared overwhelmed and lacked awareness of how critical the situation had become.” Ultimately, Phillips was dismissed because her alleged lack of “strong leadership was essential during that time”.

Jury Finds for Phillips

Last Monday, a federal jury in New Jersey agreed with Phillips’ claim and awarded her $600,000 in compensatory damages and $25 million in punitive damages after finding that Starbucks violated her federal civil rights and that it violated New Jersey law that prohibits discrimination based on race.

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