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Starbucks Fined $25.6 Million for Unfair Dismissal of White Employee in Racial Incident

The American chain of cafeterias Starbucks ordered to pay $25.6 million to former director

The American chain of cafeterias, Starbucks, has been ordered to pay $25.6 million (about €23.3 million) to a white former director who filed a complaint against the company for unfairly dismissing her. The dismissal occurred after the high-profile arrest of two black men in a Starbucks establishment in 2018, an incident in which she was not involved.

The incident and its aftermath

In April 2018, the manager of a Starbucks in Philadelphia called the police because two black men were sitting in the cafeteria without making a purchase. Subsequently, the police arrested the two men, and the incident was recorded on video and went viral on social media. This incident caused an image crisis for the company.

The two arrested individuals stated that they were waiting for another person for a business meeting. They were not charged with any crime and reached agreements with both the company and the city, with the latter committing to a youth scholarship program.

The former director’s lawsuit and trial conclusion

Shannon Phillips, a regional manager who oversaw the store where the incident occurred, was fired less than a month after the arrests. In 2019, she sued the company for unfair punitive action against her and other white employees. The jury trial, which took place in New Jersey, concluded that race played a determining factor in her firing, violating state and federal anti-discrimination laws.

As a result, the jury ordered Starbucks to pay Phillips compensation of $25.6 million.

Arguments presented during the trial

During the trial, Phillips’ lawyer, Laura Mattiacci, argued that her client was made a “scapegoat” by Starbucks in an attempt to demonstrate that the company was taking action following the highly publicized incident. Starbucks claimed that Phillips was fired because she was not an effective leader during the corporate crisis.

Starbucks’ response and aftermath

After the incident, Starbucks closed its more than 8,000 stores in the US to conduct an educational session on racism for its nearly 175,000 workers. Kevin Johnson, the company’s then president, publicly apologized to the arrested individuals.

Source: EFE

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