A federal judge in New Jersey ordered Starbucks to pay a former employee $2.7 million in addition to a $25.6 million damages award issued earlier by a jury, which found the coffee chain had unfairly fired her because she is white.
In an Aug. 16 order filed at the U.S. District Court in New Jersey, a judge said Starbucks must to pay $2.7 million in lost wages and tax damages to Shannon Phillips, a former regional manager who was fired following the high-profile arrests of two black men at a Philadelphia store.
The amount includes $2.6 million that would cover Ms. Phillips’ back and front pay damages, the court order said. The remaining $66,000 is meant to offset the taxes she will have to pay on the award.
Ms. Phillips, who had worked with Starbucks for 13 years, sued the company in 2019, claiming that she had nothing to do with the racially charged incident, but was used as a “scapegoat” as Starbucks found itself in a public relations crisis.
In her complaint, Ms. Phillips alleged that 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.”
“I was terminated because I am white,” the 52-year-old woman stated in court documents. “If I was black, I would not have been terminated. I was terminated because I complained of and objected to race discrimination.”
In June, a federal jury sided with Ms. Phillips, finding that Starbucks violated her civil rights under both federal and New Jersey anti-discrimination law. The verdict includes $25 million in punitive damages and $600,000 in compensatory damages.
Starbucks did not respond to a request for comment on the ruling.
The case stemmed from a highly publicized incident that took place on April 12, 2018, at a Starbucks in Philadelphia’s affluent Rittenhouse Square neighborhood.
Donte Robinson and Rashon Nelson, both 23 at that time, were asked to leave the coffee shop after sitting at a table without ordering anything. Although the two explained that they were waiting for a business associate, they ended up being escorted out of the coffee shop in handcuffs after a store manager called the police on them for alleged disturbance and trespassing.
The video of the arrest, released by Philadelphia police, became widely circulated on social media, sparking protests and even vandalism against the store in the months following the controversy.
In May 2018, Mr. Robinson and Mr. Nelson agreed to a settlement with Starbucks for an undisclosed sum, as well as an offer of free college tuition to complete bachelor’s degrees through an online program with Arizona State University that was created for Starbucks employees.
In a separate deal, each of the pair received a symbolic $1 compensation from the City of Philadelphia, in addition to a promise from officials to invest $200,000 into an entrepreneurship program for public high school students.
Starbucks’ then-chief executive Kevin Johnson also went to Philadelphia to apologize for the incident and to thank the two men “for their willingness to reconcile.”
“Starbucks will continue to take actions that stem from this incident to repair and reaffirm our values and vision for the kind of company we want to be,” Mr. Johnson said. He also ordered 8,000 stores across the country for an afternoon to conduct “racial-bias education geared toward preventing discrimination.”
Ms. Phillips, who at that time oversaw operations in the southern New Jersey–Philadelphia region, Delaware, and parts of Maryland, had helped Starbucks to handle the public relation crisis. According to her lawsuit, she worked to keep stores in her area safe and make sure employees returned to work at stores where customers were too afraid to come during protests.
After the settlement was reached, however, Ms. Phillips claimed that a black supervisor told her to place one of her district managers, a white man named Ben Trinsey, on administrative leave for allegedly paying non-white employees less than their white coworkers. Mr. Trinsey oversaw stores in Philadelphia, not including the location where the high-profile arrest occurred.
Ms. Phillips opposed the white manager’s suspension because he “could not have any input on employee salaries” due to Starbucks’ internal policies. She was fired the next day, allegedly told nothing except that “the situation is not recoverable.”
Starbucks denied the claims in Ms. Phillips’ lawsuit. Johnson stepped down in March 2022 after five years of leading the coffee chain.
