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Former Starbucks Manager Receives $25.6 Million in Lawsuit over Termination Following 2018 Arrests of Two Black Men

by Sophia Chen
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Starbucks lawsuit

A former Starbucks regional manager has been awarded $25.6 million by jurors in federal court. Shannon Phillips, who is white, claimed that she and other white employees were unjustly punished after the high-profile arrests of two Black men at a Philadelphia Starbucks location in 2018.

The jury in New Jersey found that Phillips’ firing was driven by racial considerations, violating federal and state anti-discrimination laws. According to Law360, Phillips received $600,000 in compensatory damages and $25 million in punitive damages.

In April 2018, a store manager in Philadelphia called the police on two Black men who were sitting in the coffee shop without making a purchase. Phillips, who was the regional manager of operations in Philadelphia, southern New Jersey, and other areas, had no involvement in the arrests. However, she lost her job less than a month later after objecting to the suspension of another white manager during the ensuing controversy, as stated in her lawsuit.

The lawsuit alleged that the company suspended the district manager, who had no responsibility for the store where the arrests occurred, based on an allegation that Black store managers were being paid less than white managers. Phillips argued that this claim made no sense since district managers had no influence over employee salaries.

The lawsuit further claimed that Starbucks took actions to “punish white employees” in the area, intending to portray a proper response to the incident to the community.

During the closing arguments, Laura Mattiacci, Phillips’ attorney, told the jurors that the company sought a “sacrificial lamb” to appease public outrage and demonstrate its responsiveness. According to Law360, Mattiacci stated that selecting a Black employee for this purpose would have backfired.

Starbucks denied the allegations made by Phillips, asserting that the company needed a leader with a track record of strength and resolution during a crisis. They replaced Phillips with a regional manager who possessed such experience, including navigating the aftermath of the 2013 Boston Marathon bombings, as reported by Law360.

Following the verdict, Phillips embraced one of her lawyers while in tears, as noted by Law360. The award amount has been confirmed by Phillips’ attorney, Laura Mattiacci, who stated that the judge will also consider back pay, future pay, and attorney’s fees. Mattiacci plans to seek approximately $3 million for lost wages and around $1 million for her legal fees. Starbucks has chosen not to comment on the matter.

In the April 2018 incident, Rashon Nelson and Donte Robinson were arrested at a Starbucks coffee shop near Rittenhouse Square in Philadelphia after the manager called the police when the two men refused to leave or make a purchase. They were subsequently released without charges.

The video of the arrest sparked nationwide outcry and prompted Starbucks’ current CEO to issue a personal apology to the men. The company later reached a settlement with Nelson and Robinson, the details of which were undisclosed, and offered them free college education. Starbucks also implemented policy changes and temporarily closed stores across the country for racial bias training.

Additionally, the two men reached an agreement with the city of Philadelphia, each receiving a symbolic $1 and a promise to establish a $200,000 program for young entrepreneurs. The Philadelphia Police Department adopted a new policy on handling individuals accused of trespassing on private property, cautioning businesses against misusing the authority of police officers.

Frequently Asked Questions (FAQs) about Starbucks lawsuit

What was the outcome of the lawsuit filed by the former Starbucks manager?

The former Starbucks manager was awarded $25.6 million in damages by the jury. She received $600,000 in compensatory damages and $25 million in punitive damages after the jury found that her firing violated federal and state anti-discrimination laws.

What were the allegations made in the lawsuit?

The lawsuit alleged that the former manager and other white employees were unfairly punished following the arrests of two Black men at a Philadelphia Starbucks location. The manager claimed that race was a determining factor in her termination, and the company was seeking to “punish white employees” as a response to the incident.

Why did the former manager lose her job?

The former manager lost her job less than a month after the arrests when she objected to the suspension of another white manager who was not responsible for the store where the arrests took place. The company’s rationale for the suspension was based on an allegation of pay disparity between Black and white managers, which the former manager argued made no sense.

How did Starbucks defend against the allegations?

Starbucks denied the allegations and stated that they needed a leader with a track record of strength and resolution during a crisis. They argued that the decision to replace the former manager was based on her lack of experience in navigating such situations. They emphasized that they needed someone who could demonstrate strength and resolution in turbulent times.

What was the impact of the arrests of the two Black men?

The arrests of the two Black men at the Philadelphia Starbucks location prompted national outcry. The incident led to public apologies from Starbucks’ CEO, policy changes within the company, and the temporary closure of stores nationwide for racial bias training. The men also reached settlements with Starbucks and the city of Philadelphia, which included financial compensation and promises for initiatives supporting young entrepreneurs.

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