Starbucks Ordered To Pay $25 Million To Ex-Manager Fired Over Racism

Former Starbucks regional manager Shannon Phillips has been locked in a legal battle against the coffee giant since 2019, claiming that Starbucks had fired her for being white while the company dealt with the repercussions of a racial scandal at a Philadelphia location. Now, a jury has decided in Phillips' favor at trial and ordered Starbucks to pay her $25.6 million in damages. 

Phillips lost her job about a month after a racial incident occurred in a Philadelphia Starbucks store that made national news in 2018. That April, two Black men had been waiting in the store for a third person for a meeting. One of the men was denied entry to the store's bathroom, and then later the pair were asked to leave the store by an employee. When the men refused to go, the police were called in and the two men were arrested.

There was a public outcry over the incident and subsequent arrests, which were seen as the result of racial profiling, and calls were made for a boycott of Starbucks. In the wake of these events, Kevin Johnson, then Starbucks' CEO, issued an official apology, and the company closed all of its stores for a day for racial bias training and instituted an open-bathroom policy (which it has since considered rescinding).  

Phillips, who managed about 100 Starbucks stores in Philadelphia and neighboring states, found herself at odds with Starbucks management when she refused to suspend a white store manager over what she says were inaccurate claims of discriminatory behavior. Phillips says that while the company tried to repair its image, it unfairly punished white employees who worked in the area but were not involved in the incident. She was soon dismissed. 

In her lawsuit, Phillips claimed that she had been fired because she was white. She had served as a district manager since 2011, and she had a stellar performance record with the company until the 2018 incident.

Phillips' case made its way to a federal courthouse in Camden, New Jersey, in 2023. At trial, Starbucks argued that Phillips was fired based on her poor response to the racial incident at the Philadelphia store and that she lacked the necessary leadership skills to handle such a crisis, but the company's lawyers failed to convince the jurors of this. Instead, the jury did believe the evidence presented by Phillips' lawyers that her firing had been an instance of discrimination.

The jury found that Phillips' civil rights had been violated by the company and that she had been fired because of her race. In their verdict, they awarded Phillips $25.6 million in damages. For the federal civil rights violation, Phillips will receive $300,000 in compensatory damages and $12.5 million in punitive damages. She also sued under a New Jersey law that protects against racial discrimination and received another $300,000 in compensatory damages and an additional $12.5 million in punitive damages. The judge in the case, Senior U.S. District Court Judge Joel H. Slomsky, will determine what Phillips will receive for lost wages at a future hearing.