Starbucks Ordered To Pay $25.6 Million To a Manager Who Says She Was Fired For Being White

A jury has ruled in favor of a former Starbucks employee, who had sued the company for wrongfully firing her for being White.

Former Starbucks regional director Shannon Phillips, who worked for Starbucks for more than 13 years and managed a region of stores in the area, was fired following the arrest of two Black men at Philadelphia Starbucks in April 2018.

The New Jersey jury ordered $25.6 million, including $25 million for punitive damages and $600,000 in compensatory damages, according to the law firm which represents Phillips. 

Following a six-day trial, the jury unanimously ruled that Phillips will also be seeking back and front pay.

The company said that it is disappointed in the decision and is evaluating its next steps, representative Jaci Anderson, told CNN.

What Happened In 2018?

In April 2018, an employee at the Starbucks outlet in Philadelphia called 911 and reported that two men were at Starbucks without placing an order. The employee reportedly felt suspicious because the two men were dark-skinned. The men were arrested and escorted out of the coffee house. The incident was captured on camera and gained traction on social media triggering protests. Starbucks then let go of Phillips.

Within two days, the police department and the Mayor's office launched an investigation to understand if it was an outcome of a racial bias. During the investigation, it was revealed that the two men who were arrested were waiting for a real estate investor who was supposed to meet them at Starbucks. 

In a lawsuit first filed in 2019, Phillips accused the company of discriminating against her because of her race. The complaint said that Starbucks “took steps to punish White 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.”

Phillips added in her complaint that Starbucks had asked her to send a White employee on administrative leave as part of these efforts, due to alleged discriminatory conduct. Phillips objected to that and even tried to defend the employee. As a result, the company let her go, she said.

The company, however, said she was fired as “senior leaders observed Phillips demonstrate a complete absence of leadership during this crisis.”

What Did The Starbucks CEO Say?

Two days after the incident, the CEO of Starbucks, Kevin Johnson, issued a public apology to the two men who were arrested and promised to take appropriate action to remedy the situation. However, the initial apology never addressed the racial bias. 

Three days after the first response, Starbucks deeply analyzed the situation and realized the gravity of the issue. 

On May 29, 2018 and conduct a training session for 175,000 employees. The agenda and contents of the training session were to be drafted by a wide range of experts to address and successfully counter racial bias. 

Eventual Actions

In an interview with CBC, the executive chairman of Starbucks said that he was ashamed of the incident. The CEO also met with the two men who were arrested and offered to cover their tuition at Arizona State University, where they were students. Starbucks finally closed 8000 locations as promised and conducted a four-hour training to combat racial bias and encourage employees to be more sensitive to the customers. Starbucks suffered a hefty loss of $16.7 million in retail sales that afternoon.