A federal jury has ordered Starbucks to pay $25.6 million to a former regional manager after determining the company had wrongfully fired her after the arrest of two black men at a Philadelphia location in 2018 sparked online outrage and protests.
On Monday, the jury ruled that Starbucks had violated Shannon Phillips’s federal civil rights and a New Jersey law that prohibits discrimination based on race when the company fired her amid fallout from the incident, solely because she was white. The jury ordered Starbucks to pay the former manager $600,000 in compensatory damages and $25 million in punitive damages.
The firing happened amid outcry sparked by an April 2018 incident at a Rittenhouse Square Starbucks that began when two black men sat a table without ordering anything. The men were waiting for a third person to arrive when one of them asked to use a restroom. The employees refused and eventually asked the men to leave. When they refused to leave, the employees called police.
The incident caused widespread backlash and led Starbucks to temporarily close 8,000 stores while store managers underwent training to address “unconscious bias.”
Phillips’s lawsuit accused the company of punishing her and other white employees near Philadelphia after the incident, despite having not even been involved in the situation.
As Starbucks worked to quiet public outcry over the incident, Phillips said one of her bosses, a black woman, instructed her to suspend a white manager who was in charge of overseeing stores in Philadelphia. Phillips’s superior said the manager, who did not oversee the Rittenhouse Square location where the incident occurred, needed to be suspended because he had engaged in discriminatory conduct. Phillips disputed those allegations and questioned the need to suspend the manager.
Phillips said the manager who oversaw the Rittenhouse Square store, a black man, did not face any punishment, despite having promoted the employee who called the police.
Phillips said she was fired shortly after pushing back against the order to suspend the white manager.
She had been promoted to the regional manager role in 2011 after she exhibited “exemplary performance” as a district manager in Ohio for six years. As regional manager, she oversaw nearly 100 stores throughout Philadelphia, New Jersey, Delaware, and Maryland.
Starbucks argued in court filings that Phillips was fired not because of her race but because, “During this time of crisis” the company’s “Philadelphia market needed a leader who could perform,” and “Ms. Phillips failed in every aspect of that role.”
She said she had never been told she was doing a bad job.
Phillips’s lawyer, Laura Carlin Mattiacci, told the New York Times that she and her client are “very pleased” with the jury’s verdict. She said he “proved by ‘clear and convincing evidence’ that punitive damages were warranted” under New Jersey law.