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Shannon Philips, a former Starbucks regional manager, and White woman, filed a lawsuit in 2019 against Starbucks, alleging wrongful termination based on racial discrimination.
On Monday, a jury delivered a verdict in her favor, awarding her $25.6 million in total
Phillips had supervisory responsibilities for multiple stores in her region, including the Starbucks location in Philadelphia where two Black men were arrested in 2018.
This incident triggered protests and generated negative publicity for the company. The men were asked to leave the store as they had not made any purchases. They explained that they were waiting for a colleague before placing an order. When they refused to leave, the store manager called the police, resulting in their arrest and removal from the premises.
The encounter was captured on video, which quickly went viral, intensifying the backlash faced by the ubiquitous coffee behemoth. To prevent future incidents of racial discrimination, the company implemented racial bias training for its employees.
However, Philips claimed that racial bias training was not the only action Starbucks took to address the issue.
Philips claims Starbucks “punished White employees”
In her formal complaint, she 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.” Philips believes she was fired because she was White and worked in the same region where the incident occurred.
Furthermore, Philips stated that she witnessed Starbucks unjustly disciplining White employees as part of a public relations strategy. She recalled being instructed by Starbucks to place a White employee on administrative leave for racial misconduct, despite knowing that no misconduct had taken place.
Philips believes she was terminated for resisting these instructions and defending the accused employee
Starbucks, in response, denied that Philips’ termination was based on her race, asserting that it was due to her failure to demonstrate leadership in her role.
According to documents presented in defense against the lawsuit, Starbucks stated that Philips did not take the incident in 2018 seriously enough and did not exhibit leadership qualities during a period when the company faced intense scrutiny.
During subsequent court proceedings following Philips’ termination, Starbucks refuted all claims that she was fired because of her race or as an attempt to address the racial discrimination incident from 2018. They stated, “Senior leaders and members of Partner Resources all observed Ms. Phillips demonstrate a complete absence of leadership during this crisis.”
Despite Starbucks’ attempts to challenge the allegations, a New Jersey jury unanimously ruled in favor of Philips, awarding her $25 million in punitive damages and $600,000 in compensatory damages.
CNN reported that Starbucks spokesperson Jaci Anderson expressed disappointment with the verdict and stated that the company is evaluating how to move forward.