A staggering sum of over $25 million has been awarded to Shannon Phillips, a former Starbucks regional manager who faced termination following an incident involving two black men at one of her outlets in 2018.
In a unanimous decision, the jury granted Phillips $25 million in punitive damages, along with an additional $600,000. She filed a lawsuit against Starbucks, alleging that her employment was unlawfully terminated based on her ethnicity, which violated New Jersey law and Title VII of the Civil Rights Act of 1964.
Phillips and her attorney, Laura Carlin Mattiacci, expressed their satisfaction with the outcome. Mattiacci stated that Phillips had provided “clear and convincing evidence” to justify the punitive damages under New Jersey law.
Having demonstrated exemplary performance as a district manager in Ohio, Phillips was promoted to the role of regional manager in 2011. She was entrusted with overseeing around a hundred stores across the Mid-Atlantic region. Starbucks justified her dismissal by claiming that the “Philadelphia market needed a leader who could perform,” and alleged that Phillips had failed in every aspect of her role.
It was within Phillips’ jurisdiction that an incident occurred at a Starbucks location in Philadelphia, where two black men named Rashon Nelson and Donte Robinson were denied access to the restroom in 2018. The men explained that they were waiting for a third individual to discuss a potential business opportunity in real estate. The staff asked them to leave, and when they refused, the police were called.
The incident, captured on video, sparked widespread protests and compelled Starbucks to implement “sensitivity training” for its 175,000 employees at 8,000 stores.
Phillips asserted that weeks after the incident, Starbucks began disciplining white employees as a public show of addressing the matter, even though these employees had no involvement in the controversy at the Philadelphia store.
For instance, Phillips claimed that her black female supervisor instructed her to suspend Benjamin Trinsey, a white manager, based on allegations of racial discrimination, where it was claimed he paid employees from ethnic minorities less than their white counterparts. Phillips argued that Trinsey was not a discriminatory employer and did not have the authority to make salary decisions. Nevertheless, she followed the order and placed Trinsey on indefinite leave, only to lose her own job two days later.
Phillips further alleged that no action was taken against the black manager at the Rittenhouse Square location, while she received numerous complaints about the management style of black district manager Paul Sykes under her purview. Although the company investigated the allegations against Trinsey and suspended him, Sykes escaped any consequences.
During the proceedings, Sykes testified that he overheard discussions within Starbucks about sending a “strong message” following the racial incident, and that Phillips’ race played a role in her dismissal.
Starbucks contended that Phillips had missed crucial meetings and was unaware of the impact that the Rittenhouse Square store crisis had on the company. However, Phillips presented evidence that she was actively present during the dispute and had provided emotional support to her subordinates, including Sykes and Trinsey.
To counter Starbucks’ allegations of incompetence, Phillips revealed that she fully immersed herself in the company’s efforts to restore its reputation and remained there for the hourly staff throughout. She claimed to have collaborated with store managers in her region to fill shifts at businesses where staff members had fled due to fear of demonstrators.