Starbucks Ordered to Pay $25.6 Million in Discrimination Case

Former Starbucks regional manager awarded $25.6 million in lawsuit over racial discrimination claims.

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Former Starbucks regional manager Shannon Phillips has been awarded $25.6 million by a federal court jury after she claimed that she and other white employees were unfairly treated following the high-profile arrests of two Black men at a Philadelphia store in 2018. The jury in New Jersey found that race played a determining role in Phillips’ firing, violating federal and state anti-discrimination laws.

At the time of the arrests, Phillips was the regional manager of operations in Philadelphia, southern New Jersey, and other locations. In her case, she claimed that she was told to place a white manager on administrative leave for reasons she knew were bogus. Phillips claimed she was dismissed less than a month later for protesting to the manager’s suspension in the midst of the public outrage.

According to the lawsuit, Starbucks justified the suspension of the district manager by alleging that Black store managers were paid less than their white counterparts. Phillips argued that this rationale made no sense since district managers had no authority over employee salaries. The lawsuit further claimed that Starbucks was attempting to “punish white employees” in the area as a way to demonstrate a proper response to the incident.

During closing arguments, Phillips’ lawyer Laura Mattiacci argued that Starbucks was searching for a “sacrificial lamb” to appease the public and show action but choosing a Black employee for that purpose would have backfired. Starbucks denied the allegations and stated that they replaced Phillips with a regional manager who had experience in handling crises, including the aftermath of the 2013 Boston Marathon bombings.

Phillips’ attorney presented testimony from a Black district manager responsible for the store where the arrests occurred, who described Phillips as well-regarded by her colleagues and someone who worked tirelessly after the incident. The judge will consider awarding back pay, future pay, and attorney’s fees in addition to the $25.6 million already granted.

Rashon Nelson and Donte Robinson, two Black guys from Philadelphia, were detained in April 2018 inside a Starbucks near Rittenhouse Square. Because the males were sitting in the coffee shop without making a purchase, the management phoned the cops. The event, which was recorded on camera, caused nationwide indignation and racial discrimination claims. Starbucks’ CEO personally apologized to the guys, and the firm struck a deal with them, paying an unknown quantity of money as well as a college education with no cost.

In addition, the two men reached a symbolic settlement with the city of Philadelphia, receiving $1 each and a commitment to establish a $200,000 program for young entrepreneurs. The Philadelphia Police Department also implemented a new policy on dealing with individuals accused of trespassing on private property, cautioning businesses against misusing the authority of law enforcement officers.

The controversy surrounding the arrests prompted Starbucks to close all of its 8,000 U.S. locations temporarily for racial bias training sessions. Phillips claimed that during this period, she was instructed by her superiors to suspend a white district manager overseeing stores in Philadelphia, despite his lack of direct involvement in the incident. She argued that she had no valid reason to suspend him and that the store in question was managed by a Black district manager who faced no disciplinary action.

Starbucks defended its decision, stating that it needed someone with strength and resolution during a crisis and replaced Phillips with a regional manager who possessed relevant experience. The company maintained that Phillips’ termination was unrelated to her race and instead attributed it to her failure in understanding the severity of the situation while Starbucks faced intense criticism.

Following the recent verdict, Starbucks stated that it is evaluating its next steps, while Phillips’ attorneys expressed satisfaction with the outcome.

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