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Starbucks ordered to pay $25 million to ex-manager who claimed she was fired because she was white

Aaron McDade   

Starbucks ordered to pay $25 million to ex-manager who claimed she was fired because she was white
  • Starbucks was ordered to pay $25.6 million in damages to a former employee this week.
  • Shannon Phillips claimed she was fired from her role as a regional director because she was white.

Starbucks has been ordered to pay $25.6 million in damages to a former regional director who sued the company in the wake of a controversy that saw two Black men arrested while sitting at a coffee shop.

The director — who disagreed with Starbucks' handling of the issue that triggered a nationwide discussion on race — had claimed in a lawsuit that she was fired because she was white.

Shannon Phillips said in the lawsuit, filed in 2019, that her firing came in the wake of a 2018 viral video that sparked outrage and accusations of racism against Starbucks and against the employees of the Philadelphia store where the video took place.

Just over five years later, a jury in US District Court in New Jersey found on Monday that Starbucks discriminated against Phillips by firing her, which she claimed happened at least in part because she was a white woman. In the original complaint filed in 2019, Phillips said she worked her way up from being hired as a district manager in Ohio in 2005 to being promoted to a regional director overseeing about 100 stores in 2011.

The 2018 incident, captured on video, showed two Black men who said they were waiting for a third person in a Philadelphia Starbucks. One of the men eventually asked to use the restroom and was denied. Employees said they cited company policy that restrooms were for paying customers only.

The men were at one point asked to leave, employees said, and an employee ended up calling the police on them after they refused — accusing the pair of trespassing. The men were arrested, but Starbucks did not end up pressing charges. The incident drew outrage as the employees were accused of discriminating against the men, and led to apologies from the company and then-CEO Kevin Johnson.

They eventually settled a lawsuit against Starbucks and the city, but it wasn't the only legal action Starbucks faced in the wake of the viral moment. Phillips sued Starbucks in 2019, accusing the coffee giant of discriminating against her.

In the weeks following the video and criticism, Starbucks closed all 8,000 of its US locations so its employees could take part in racial bias training sessions. Around that time, Phillips claimed she was instructed by her superiors to suspend a white district manager who oversaw stores around Philadelphia, even though, she said, he was not directly involved and did not oversee the store where the incident took place.

She disputed that the white district manager was involved, said she had no performance-based reason to suspend him, and said the store in question was overseen by a Black district manager who was not facing discipline, she said in the suit.

About a year after she pushed back against the proposed discipline, Phillips claimed she was fired and was only told her situation was "not recoverable," despite, she said, receiving a bonus the month before and her superior agreeing she was still doing "exceptional" work.

The company denied in court filings that Phillips' race had anything to do with her firing, and said she failed in doing her job and understanding how serious the situation was as Starbucks was facing intense criticism.

A Starbucks spokesperson declined to comment on the verdict when reached by Insider, but told CNN it was "evaluating its next steps."

Laura Carlin Mattiacci, one of the attorneys representing Phillips, told the New York Times they were "very pleased" with the verdict. Attorneys representing Phillips did not immediately respond to Insider's request for comment.

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