Jury Awards Fired White Starbucks Manager $25M

Federal jury sides with Shannon Phillips in reverse discrimination case
By Arden Dier,  Newser Staff
Posted Jun 14, 2023 8:01 AM CDT
Starbucks Owes $25M to Manager Fired for Being White
Demonstrators occupy the Starbucks that has become the center of protests Monday, April 16, 2018, in Philadelphia.   (AP Photo/Jacqueline Larma)

Starbucks must pay $25 million to a former regional manager fired because she is white, a federal jury ruled Monday. Shannon Phillips, who oversaw 100 stores in four states, was relieved from her position in the weeks after what Starbucks CEO Kevin Johnson called a "reprehensible" incident at a Philadelphia location in April 2018. Two Black men who were waiting for a third person to arrive had asked to use the restroom without placing an order and were refused. Eventually, they were asked to leave. When they declined, a manager called police, resulting in the men's arrests. The incident prompted intense backlash and protests. Starbucks ultimately closed all 8,000 US stores for racial bias training and changed its policy so that a purchase wasn't required to use a store bathroom.

In the aftermath, Phillips said she was asked by a Black supervisor to suspend a white manager who oversaw stores in Philadelphia, though not the location where the incident occurred, because of allegations that the man engaged in discriminatory conduct, per the New York Times. Phillips said she resisted because she knew the allegations to be untrue and was subsequently fired. She said she was given no comment on her job performance but simply told that "the situation is not recoverable." In her initial lawsuit, she said 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," per Quartz.

In court, Starbucks argued Phillips failed as a leader. But Paul Sykes, the manager of the Philadelphia location where the incident occurred, who'd promoted the employee who called police, testified that he'd faced no discipline, per Law.com. The Black man argued his race protected him, while Phillips' was her downfall in this case. The federal jury in New Jersey unanimously sided with Phillips, deciding Starbucks violated her federal civil rights and state laws against racial discrimination, and awarded her $600,000 in compensatory damages and $25 million in punitive damages. Her lawyer will also seek $3 million for past and future lost pay, plus $1 million to cover legal fees, to be awarded at a later date, per Law.com. (Starbucks agreed to pay the college tuitions of the arrested men.)

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