Court orders Starbucks to pay $25.6 million to former manager who says she was sacked for being white

Friday June 16, 2023 – A court has ordered, Coffee giant Starbucks to pay $25.6 million to a former store manager who a jury determined had been fired because she was White.

The former regional manager, Shannon Phillips, who oversaw dozens of Starbucks coffee shops, was fired by the company in the aftermath of a 2018 incident that took place at a Starbucks shop in the Rittenhouse Square neighborhood of Philadelphia, USA.

The incident involved two Black men in their 20s who were awaiting a third party for a business meeting at the Rittenhouse Square Startbucks when one of them, Rashon Nelson, was denied permission to use the restroom, because he hadn’t purchased anything.

A store employee then asked Nelson and his business partner, Donte Robinson, if they needed help. The pair declined.

Shortly thereafter, after being summoned by Starbucks staff, police arrived, handcuffed the pair and escorted them from the cafe.

Their arrests were captured on video and shared widely. Protests ensued, with the company closing all of its stores to hold anti-bias training for workers.

Phillips, the regional manager, was fired, while the manager of the Rittenhouse Square coffee shop, who was Black, kept his job. Phillips sued Starbucks in 2019, alleging that race had been a determining factor in her termination.

Her lawyers argued that “upper management of Starbucks were looking for a ‘scapegoat’ to terminate to show action was being taken” following the incident involving the two Black men.

A federal jury in Camden, New Jersey, on Monday, June 12 agreed with their claim and awarded Phillips $600,000 in compensatory damages and $25 million in punitive damages after finding that Starbucks violated her federal civil rights in addition to a New Jersey law that prohibits discrimination based on race.

The case is unusual because anti-discrimination laws usually favour blacks or asians, according to Wilk Auslander employment attorney Helen Rella.

“The decision in the Starbucks case, that found Starbucks liable for race discrimination relative to a white employee who was terminated, sends the signal that all races are protected from discrimination – not just those who are considered minorities,” she told CBS MoneyWatch. “It serves as a reminder to employers to carefully consider their actions to ensure that they are compliant with anti-discrimination laws across the board.”

The 2018 incident was a major PR crisis for the company. In the wake of the arrests, Starbucks took several steps to try to alleviate the situation.

Then-CEO Kevin Johnson apologized, saying that what happened was “reprehensible” and promising to make any changes needed to make sure that something like it doesn’t happen again.

Starbucks soon changed its policy to allow people to use Starbucks’ restrooms and spend time in stores, even if they haven’t made any purchases. The coffee chain also closed about 8,000 company-owned stores for an afternoon for a mandatory anti-bias training for roughly 175,000 employees.