Former Starbucks Manager Receives $25.6M in Lawsuit for Wrongful Termination After Black Men’s Arrests in 2018.

A former Starbucks regional manager, Shannon Phillips, has been awarded $25.6 million by a New Jersey federal court after claiming that she and other white employees were unfairly punished following the high-profile arrest of two black men at a Philadelphia Starbucks coffee shop in 2018. The jury adjudged that race was a decisive factor in Phillips’ termination, in violation of federal and state anti-discrimination laws.

Phillips won $600,000 in compensatory damages and $25 million in punitive damages after claiming that she was asked to carry out false administrative actions relating to a white manager who was placed on leave for reasons she knew were untrue. The company stated that this was due to an allegation that black store managers were receiving lower pay than white peers, but Phillips argued that the district managers were not involved in employee remuneration decisions and that white employees were being punished unjustly.

The lawsuit claimed that Starbucks was seeking to sanction white area-based employees “in an effort to convince the community that it had properly responded to the incident” involving the black men’s arrest. Phillips’ lawyer, Laura Mattiacci, contended that the company was searching for a “sacrificial lamb” to assuage public anger and demonstrate that it was taking action. If the company had picked a black employee for this role, “it would have blown up in their faces,” she said.

Starbucks rejected Phillips’ accusations, claiming that it needed a manager with a track record of “strength and resolution” to lead coffee shops through a crisis. The company further stated that Phillips was replaced with a regional manager who had previously navigated the aftermath of the 2013 Boston Marathon bombings. However, Phillips’ attorney referred to testimony from a district manager who stated that Phillips was admired by colleagues and had worked tirelessly after the arrests took place.

Following the case, Phillips’ attorney confirmed that the judge will consider awarding back pay, future pay, and attorney’s fees. Mattiacci told reporters that she would be seeking approximately $3 million for the lost pay and roughly $1 million on her fee application. Starbucks declined to comment.

In the wake of the arrest incident, the two black men received an undisclosed settlement and an offer of free college education from Starbucks. The company also altered its policies and closed branches nationwide for an afternoon of racial-bias training. The two men similarly reached a deal with the Philadelphia authorities offering a symbolic sum of $1 each along with a pledge from officials to establish a $200,000 program for young entrepreneurs. The city’s Police Department modified its procedures for dealing with individuals accused of trespassing on private property in response to the case.