Starbucks Told to Pay $2.7M to Fired Manager on Top of $25M Jury Award

A judge has ordered Starbucks to pay an additional $2.7 million in lost wages and tax damages to a former regional manager who was earlier awarded more than $25 million after alleging she and other white employees were unfairly punished following the high-profile arrests of two Black men at a store in 2018.

In June, Shannon Phillips won $600,000 in compensatory damages and $25 million in punitive damages after a jury in New Jersey found that race was a determinative factor in Phillips’ firing, in violation of federal and state anti- discrimination laws.

The Philadelphia Inquirer reports that U.S. district judge Wednesday ordered Starbucks to pay Phillips another $2.73 million in past and future lost earnings and benefits as well as compensation for tax disadvantages due to the lump sum, according to court documents. The company opposed paying any amount, saying Philipps had not proven she couldn’t have earned the same or more in the future.

In April 2018, a Philadelphia store manager called police on two Black men who were sitting in the coffee shop without ordering anything. Rashon Nelson and Donte Robinson were later released without charges.

Phillips, then regional manager of operations in Philadelphia, southern New Jersey, and elsewhere, was not involved with arrests. However, she said she was ordered to put a white manager who also wasn’t involved on administrative leave for reasons she knew were false, according to her lawsuit.

Phillips, 52, said she was fired less than a month later after objecting to the manager being placed on leave amid the uproar, according to her lawsuit.

The company’s rationale for suspending the district manager, who was not responsible for the store where the arrests took place, was an allegation that Black store managers were being paid less than white managers, according to the lawsuit. Phillips said that argument made no sense since district managers had no input on employee salaries.

The lawsuit alleged Starbucks was instead taking steps to “punish white employees” who worked in the area “in an effort to convince the community that it had properly responded to the incident.”

Starbucks lawyers had alleged that Phillips was fired because the company needed stronger leadership in the aftermath of the arrests.

Starbucks is seeking a new trial, arguing that jurors were allowed to remain despite having expressed negative opinions about the company, that incorrect information in witness testimony “poisoned the well,” and that Phillips should not have been awarded “double damages” on both the state and federal allegations, the Inquirer reported.

Phillips’ lawyers, meanwhile, also want Starbucks ordered to pay $1.4 million in legal fees from 2018 through 2023.

Video of the arrest prompted a national outcry, and the company later reached a settlement with both men for an undisclosed sum and an offer of free college education.

The two men reached a deal with the city of Philadelphia for a symbolic $1 each and a promise from officials to set up a $200,000 program for young entrepreneurs. The Philadelphia Police Department adopted a new policy on how to deal with people accused of trespassing on private property —warning businesses against misusing the authority of police officers.