Starbucks to Pay $25.6M for Race-Based Termination

Jurors recently awarded a former White Starbucks regional manager $25.6M – $600k in compensatory damages and $25M in punitive damages – finding that her race was a factor when Starbucks terminated her employment in 2018 after the arrests of two Black men at a downtown Philadelphia location made national news.

The men were arrested on suspicion of trespassing when they sat down at a Starbucks, asked to use the restroom but were denied because they had not bought anything, and declined to leave when asked.  The men were meeting a third (White) man there but were instead arrested.  The charges were eventually dropped, but Starbucks faced public backlash.

According to the lawsuit, Shannon Phillips was the regional manager in Philadelphia but was not involved with the arrests.  She was told to put a White manager, who also was not involved in the arrests, on administrative leave, but she objected because she knew the reasons for the leave were untrue.  Starbucks fired her shortly thereafter.  A Black district manager, who was responsible for the Philadelphia location where the arrests took place, was not fired.  

The lawsuit further alleged Starbucks was trying to “punish White employees” in Philadelphia “in an effort to convince the community that it had properly responded to the incident.”

What this means to you:

Race has no place in employment decisions – not with hiring, compensation, job assignments, promotions, performance reviews, discipline, or any other term or condition of employment.  All applicants and employees are protected from race discrimination, regardless of their race.

Make sure your workplace makes employment decisions without regard to protected characteristics such as race.  To learn about our Respectful Workplace, Managing Within the Law, or other programs or to book a workshop, please call 800-458-2778 or email training@fairmeasures.com.

Updated 10-10-2023