A judge has ruled that Starbucks must pay an additional $2.7 million in compensation for lost wages and tax-related damages to a former regional manager. This decision comes after the manager had previously been awarded over $25 million, following allegations that she and other white employees faced unjust repercussions in the aftermath of the well-publicized arrests of two Black men at a Starbucks store in 2018.
Back in June, Shannon Phillips secured $600,000 in compensatory damages and a substantial $25 million in punitive damages. This verdict was the result of a New Jersey jury’s determination that her termination was influenced by her race, which directly violated both federal and state anti-discrimination laws.
A U.S. district judge recently ruled that Starbucks is obligated to provide Phillips with an additional $2.73 million. This sum encompasses compensation for both past and future lost earnings, benefits, and compensation to offset tax-related disadvantages linked to the lump sum payment. These details were outlined in court documents. In contrast, Starbucks contested the necessity of making any payment, asserting that Phillips had failed to sufficiently prove that she couldn’t have achieved similar or even higher earnings in the future.
The incident that sparked this legal battle took place in April 2018, when a manager at a Philadelphia Starbucks outlet called the police on two Black customers who were sitting in the store without making a purchase. The customers, Rashon Nelson and Donte Robinson, were eventually released without any charges being filed.
Shannon Phillips, who at the time held the position of regional manager responsible for operations in Philadelphia, southern New Jersey, and surrounding areas, was not directly involved in the arrests. Nonetheless, she alleged that she was instructed to place an unrelated white manager on administrative leave using reasons that she knew were false, as per her lawsuit.
Phillips, aged 52, claimed that she was terminated less than a month later, shortly after voicing objections to the suspension of the manager during the public outcry that followed the arrests.
Starbucks’ justification for placing the district manager on suspension, even though they weren’t connected to the store where the arrests occurred, was based on allegations that Black store managers were receiving lower compensation than their white counterparts. Phillips’ lawsuit argued that this reasoning was unfounded, as district managers had no control over employee salaries.
The lawsuit further alleged that Starbucks was engaging in actions to “penalize white employees” in the region, as a way of demonstrating to the community that they were responding appropriately to the incident.
Starbucks’ legal team countered by claiming that Phillips was dismissed due to the company’s need for stronger leadership following the arrests.
Starbucks is currently pursuing a new trial, contending that jurors who held negative opinions about the company were permitted to participate, erroneous information in witness testimonies had tainted the proceedings, and that Phillips should not have been granted “double damages” for both state and federal claims.
Conversely, Phillips’ legal representatives are also seeking a court order mandating that Starbucks cover $1.4 million in legal fees spanning from 2018 to 2023.
The video of the arrests sparked a nationwide outcry, leading Starbucks to ultimately reach a settlement with the two men for an undisclosed sum, along with an offer of free college education.
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Meanwhile, the two men entered into an agreement with the city of Philadelphia, each accepting a symbolic $1 and an assurance from officials to establish a $200,000 program for young entrepreneurs. The Philadelphia Police Department also adopted a new protocol for dealing with individuals accused of trespassing on private property, cautioning businesses against the inappropriate use of police authority.
