A jury recently ordered Starbucks to pay approximately $25.6M to a former regional manager who was fired in 2018. The manager’s firing followed the viral incident where two black men had the police called on them by a Starbucks employee. The incident sparked controversy and led to accusations of racism against the coffee company.
According to Fox News, a Starbucks employee called the Philadelphia police on two black men who claimed they were waiting for a “business associate” but hadn’t ordered anything at the store. The incident that occurred almost five years ago was captured on video, which quickly went viral, leading to a backlash against Starbucks.
Amid the accusations of racism, the CEO of the coffee company issued an apology and closed 8,000 stores for “racial bias” training. Additionally, Starbucks fired Shannon Phillips, the regional manager who oversaw approximately 100 regional stores. The company also reached a private settlement with the two men in the weeks following the incident. It was clear Starbucks was scrambling to deal with the enormous negative publicity, and Phillips’ attorney said the company was looking for a “sacrificial lamb” to serve as the scapegoat.
According to reports, one of Phillips’ supervisors, who happened to be a black woman, told her to suspend a white manager that oversaw stores in the Philadelphia market. Phillips refused to take that action because she believed the allegations of discrimination were baseless, to which she was fired. A Starbucks lawyer stated, “During this time of crisis, Philadelphia market needed a leader who could perform.” The lawyer said the former regional manager “failed every aspect of that role.”
The basis of Phillips’ lawsuit was that Starbucks was unfairly punishing white employees for the incident that occurred with the black men at the Philadelphia cafe. Phillips had worked at Starbucks for 13 years and had a record of strong performance, which earned her promotions, but she was fired soon after the controversy unfolded.
Phillips’ lawyer stated, “This was all about the appearances, the optics of what they did. If Shannon Phillips is Black, does it play out like this? This case is about Starbucks and self-preservation.” The attorney even pointed to testimony from a district manager who worked under Phillips and happened to be black. This employee stated that Phillips was highly respected among her colleagues and said her firing was likely due to her race.
A New Jersey federal court ruled in favor of Shannon Phillips whose lawsuit dates back to 2019, alleging her firing was the product of discrimination and racial bias. The jury, consisting of eight members, debated for five hours but came to the conclusion that Phillips’ skin color played a determining role in her firing. The panel awarded the former regional manager $25 million in punitive damages and another $600,000 in compensatory damages.
The lawsuit, which spanned several years, proved to be quite lucrative for the former regional manager. Starbucks was faced with a public relations nightmare in the wake of the 2018 incident, however, the jury found that the coffee company violated Phillips’ civil rights in attempting to mitigate it.
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