Starbucks ordered to pay white former manager $25M for race discrimination

A federal jury in New Jersey ordered coffee giant Starbucks to pay $25.6 million to a former manager who filed suit in 2019, saying she was fired because she is white.

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Starbucks fired Shannon Phillips from her role as regional director in May 2018, weeks after the company began grappling with heated public backlash following the arrests of two Black men at a Philadelphia Starbucks location. Phillips had been with the company for 13 years.

On Monday, jurors sided with Phillips in her discrimination lawsuit, finding that Starbucks violated state and federal law in firing her because of her race. They awarded her $600,000 in compensatory damages and $25 million in punitive damages, court records show.

An attorney for Phillips, Laura Carlin Mattiacci, told The New York Times that she and her client were “very pleased” by the verdict. She added that Phillips “proved by ‘clear and convincing evidence’ that punitive damages were warranted” under New Jersey law, the Times reported.

Starbucks denied that it had discriminated against Phillips or any other employees. In a court filing, attorneys for the company said Phillips failed to lead her team when they needed her in the aftermath of the April 2018 arrests, leading to her dismissal.

“During this time of crisis, Starbucks’ Philadelphia market needed a leader who could perform,” attorneys wrote. “Ms. Phillips failed in every aspect of that role.”

In her lawsuit, Phillips said that Starbucks sought to punish her and other white employees who had not been involved in the April 2018 arrests, aiming to cool the public furor sparked by the incident. She pointed to the case of a white district manager who worked under her, saying that she was ordered to suspend him for an investigation into alleged racial discrimination despite knowing that the allegations did not involve issues under his control.

In April 2018, authorities arrested Rashon Nelson and Donte Robinson on suspicion of trespassing at a Starbucks in Philadelphia’s Rittenhouse Square neighborhood. At the time, they said they were waiting for a meeting with a potential business partner. They were in the store for about three minutes before the store’s manager called police.

The incident fueled protests and allegations of race discrimination, prompting Starbucks to close its thousands of locations nationwide to hold racial-bias education training.

Nelson and Robinson settled with the coffee chain for an undisclosed sum in May 2018, The Associated Press reported. They also settled with the city for a symbolic $1 each and an agreement that officials would start a $200,000 program for young entrepreneurs, according to the AP.