Starbucks Ordered to Pay $25.6 million to a Manager Who Says She Was Fired For Being White

A jury has delivered a verdict in favor of former Starbucks regional director Shannon Phillips, who filed a lawsuit against the company alleging wrongful termination based on her race as a White employee.

Phillips, who had been employed by Starbucks for approximately 13 years and managed a region of stores, was fired following the arrest of two Black men at a Philadelphia Starbucks in April 2018.

According to Console Mattiacci Law, the law firm representing Phillips, the New Jersey jury awarded her $25.6 million in total damages.

This includes $25 million in punitive damages and $600,000 in compensatory damages. The jury reached a unanimous decision after a six-day trial, and Phillips intends to seek back and front pay as well.

Starbucks expressed disappointment with the verdict and stated that it is evaluating its next steps, as conveyed by spokesperson Jaci Anderson to CNN.

This recent verdict is the latest development in a controversial incident that sparked protests and outrage.

In 2018, the two men were asked to leave the coffee shop for sitting at a table without placing an order. When they refused to leave, stating that they were waiting for a business associate, the store manager called the police, leading to the men being handcuffed and escorted out.

Subsequently, settlement agreements were reached between the two men, Starbucks, and the City of Philadelphia.

Phillips filed her lawsuit in 2019, alleging racial discrimination by Starbucks in her termination.
According to the complaint, Starbucks took actions following the arrests to punish White employees who were not involved in the incident but worked in and around Philadelphia, in an attempt to demonstrate a proper response to the community.

As the regional director overseeing areas including Philadelphia, Phillips claimed that she was instructed by Starbucks to place a White employee on administrative leave based on allegations of discriminatory conduct, which she believed to be inaccurate.

When Phillips defended the employee, she asserts that she was subsequently fired by the company.

The complaint argued that the reason given for her termination, “the situation is not recoverable,” was a pretext for race discrimination, stating that Phillips’ race played a motivating and determining role in Starbucks’ discriminatory treatment.

Starbucks, in response, denied the allegations in 2019 and argued in a court filing in 2021 that Phillips displayed a lack of leadership during the crisis, as observed by senior leaders and members of Partner Resources.

According to Starbucks’ document, Phillips appeared overwhelmed and unaware of the severity of the situation, leading to her manager’s decision to dismiss her due to the need for strong leadership during that time.

The 2018 incident posed a significant public relations crisis for Starbucks. In response, the company took various measures to address the situation.

Then-CEO Kevin Johnson issued an apology, describing the incident as “reprehensible” and vowing to implement necessary changes to prevent similar occurrences.

Starbucks subsequently revised its policy to allow individuals to use restrooms and spend time in stores without making purchases.

The company also conducted mandatory anti-bias training for approximately 175,000 employees, necessitating the closure of around 8,000 company-owned stores for an afternoon.