Starbucks Regional Manager Wins $25.6 Million Verdict in Racial Discrimination Lawsuit

A Starbucks regional manager, Shannon Phillips, has been awarded a $25.6 million verdict by a New Jersey federal jury in a racial discrimination lawsuit against the corporation. Phillips accused Starbucks of terminating her employment based on her race, alleging that her dismissal was in response to the national backlash following the arrest of two Black men at a Philadelphia café.

After deliberating for nearly five hours, the eight-member panel granted Phillips $25 million in punitive damages and $600,000 in compensatory damages, affirming that her skin color played a significant role in her termination.

Phillips, who had worked for Starbucks for 13 years and supervised approximately 100 cafes, was fired less than a month after the arrest of Donte Robinson and Rashon Nelson on April 12, 2018. The incident, which was captured on cellphone video and went viral, sparked intense scrutiny of Starbucks for the alleged mistreatment of the two Black men, who were waiting for a business associate without having made a purchase when the police were called.

In an effort to address the racial controversy, Starbucks issued an apology and temporarily closed 8,000 U.S. stores for racial bias training.

During the civil trial, attorney Laura Mattiacci argued in her closing statements that Starbucks was seeking a “sacrificial lamb” to demonstrate its commitment to taking action following the arrests. She highlighted the testimony of district manager Paul Sykes, who is Black and reported to Phillips, stating that Phillips was highly regarded by her colleagues and that her abrupt termination was likely due to her race.

Mattiacci asserted, “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.”

In response, Starbucks attorney Richard Harris argued that Phillips lacked the necessary leadership skills required during the crisis and that she had been replaced by a White regional director. Harris contended that the company needed someone who could exhibit strength and resolution during those turbulent times.

Following their arrests, Robinson and Nelson reached an undisclosed financial settlement with Starbucks approximately three weeks later.

The verdict in favor of Shannon Phillips serves as a significant outcome in the ongoing conversation surrounding racial discrimination and bias in corporate environments. It highlights the importance of equitable treatment and underscores the potential consequences faced by companies that fail to address such concerns appropriately.

Starbucks has yet to comment on the jury’s decision, and it remains to be seen whether the corporation will pursue any legal action in response to the verdict.