HomeNewsStarbucks to Pay $25.6 Million to Ex-Manager in Racial Bias Case

    Starbucks to Pay $25.6 Million to Ex-Manager in Racial Bias Case

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    A former Starbucks regional director who accused the company of firing her for being White in the aftermath of a racial profiling incident at a Philadelphia store has won a $25.6 million verdict in a discrimination lawsuit.

    A jury found in favor of a former regional director who accused the company of racial discrimination./Getty Images

    Shannon Phillips, who worked for Starbucks for 13 years and oversaw about 100 cafes in the area, was terminated in May 2018, less than a month after two Black men were arrested at a Spruce Street store for refusing to leave a table. The men, who said they were waiting for a business associate and had not ordered anything, were handcuffed and escorted out by the police. The incident, captured on cellphone video, sparked nationwide protests and accusations of racial bias against the coffee chain.

    Starbucks apologized and closed 8,000 U.S. stores for a day of racial bias training. But Phillips claimed that the company also took steps to punish White employees who had not been involved in the arrests, in an effort to appease the public outcry.

    In her lawsuit, filed in 2019 in New Jersey federal court, Phillips said that Starbucks had ordered her to place a White employee on administrative leave as part of these efforts, due to alleged discriminatory conduct which Phillips said she knew was false. After Phillips tried to defend the employee, the company fired her, she said.

    The reason for termination, according to the lawsuit, was that “‘the situation is not recoverable.’” The lawsuit argued that this was “a pre-text for race discrimination,” adding that Phillips’ “race was a motivating and/or determinative factor in [Starbucks’] discriminatory treatment.”

    Starbucks denied the claims and said it fired Phillips for an “absence of leadership” during the crisis. The company said it was disappointed with the verdict and was evaluating its next steps.

    A jury unanimously found in favor of Phillips on Monday after a six-day trial. It awarded her $25 million in punitive damages and $600,000 in compensatory damages. Phillips will also be seeking back and front pay, according to her lawyers.

    “I am grateful to the jury for their time and attention and for seeing me as a person who was wronged by Starbucks,” Phillips said in a statement. “I hope this verdict will send a message to Starbucks and other corporations that they cannot discriminate against their employees.”

    Phillips’ lawyers said the verdict was one of the largest ever awarded in an employment discrimination case. They argued that Phillips was a “sacrificial lamb” for Starbucks’ public relations strategy.

    “She was sacrificed so Starbucks could say they took action,” Laura Mattiacci, one of Phillips’ attorneys, told jurors in closing arguments, according to Law360.

    Phillips received support from some of her former colleagues, including Paul Sykes, a district manager who reported to her and testified on her behalf. Sykes, who is Black, told CNN that Phillips was an “amazing leader” who did nothing wrong.

    “This case is about accountability,” he said. “She deserved better from Starbucks.”

    Relevant articles:
    – Starbucks says it fired her for an ‘absence of leadership.’ She says it was because of her race. A jury returned a $25.6 million verdict in her favor, CNN, June 14, 2023
    – Ex-Starbucks manager awarded $25 million in discrimination lawsuit filed in aftermath of incident at Philly store, Philly Voice, June 14, 2023
    – Starbucks ordered to pay white former manager $25M for race discrimination, WHIO TV, June 14, 2023
    – Starbucks manager wins $25.6 million lawsuit after arguing she was fired for being White, Fox Business, June 14, 2023

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