Starbucks manager fired amid furore over racism wins $34 million in damages

A federal jury determined that Starbucks had fired the manager because she was white. PHOTO: NYTIMES

NEW JERSEY – The episode plunged one of America’s most ubiquitous brands into crisis.

In April 2018, two Black men entered a Starbucks shop in the Rittenhouse Square neighbourhood of Philadelphia for a business meeting with a white man who had not yet arrived. While they waited, and before ordering, one of the two asked to use the bathroom. He was refused. Eventually, they were asked to leave. When they did not, an employee called the police.

The subsequent arrests, captured in videos viewed millions of times online, prompted accusations of racism, protests and boycott threats.

The company’s chief executive officer apologised publicly, describing the way the men had been treated as “reprehensible”. Starbucks took the extraordinary step of temporarily closing 8,000 stores to teach workers about racial bias.

On Monday, in a surprising twist, a federal jury in New Jersey ordered Starbucks to pay US$25.6 million (S$34.35 million) to a former regional manager after determining that the company had fired her amid the fallout from the Rittenhouse Square episode because she was white.

The jury found that Starbucks had violated the federal civil rights of the former manager, Ms Shannon Phillips, as well as a New Jersey law that prohibits discrimination based on race, awarding her US$600,000 in compensatory damages and US$25 million in punitive damages.

Ms Laura Carlin Mattiacci, a lawyer for Ms Phillips, said she and her client were “very pleased” with the unanimous verdict, adding that “she proved by ‘clear and convincing evidence’ that punitive damages were warranted” under the New Jersey law.

A Starbucks spokesman declined to comment.

At the time of the episode, Ms Phillips oversaw about 100 stores in Philadelphia, southern New Jersey, Delaware and parts of Maryland. She had been promoted to the job in 2011 after what she called her “exemplary performance” in six years as a district manager in Ohio.

Ms Phillips said in the suit that Starbucks, as part of its damage-control effort after the arrests, had sought to punish her and other white employees in and around Philadelphia even if they had not been involved in the events that led to the police being called.

Ms Phillips said she had thrown herself into the company’s efforts to restore its credibility and had sought to support hourly workers, organising managers to staff stores and cover for employees who were scared to run a gauntlet of protesters.

Amid the image-burnishing campaign, Ms Phillips said one of her superiors, a Black woman, told her to suspend a white manager who oversaw stores in Philadelphia, though not the one in Rittenhouse Square, because of allegations that he had engaged in discriminatory conduct – allegations that Ms Phillips said she knew to be untrue.

In contrast, Ms Phillips said, no action was taken against the manager who oversaw the Rittenhouse Square store, a Black man who she said had promoted the employee who called the police.

Ms Phillips said she was fired not long after baulking at the order to suspend the white manager. She said that she had not been previously told that she was doing a bad job and that the only explanation she was given for the firing was that “the situation is not recoverable”.

Starbucks denied in court filings that Ms Phillips had been fired because she was white and said she was let go because she performed poorly in response to the episode that led to the arrests.

“During this time of crisis”, a lawyer for Starbucks wrote in a court filing, the company’s “Philadelphia market needed a leader who could perform”, adding that “Ms Phillips failed in every aspect of that role”.

Starbucks ultimately chose not to press charges against the men at the centre of the episode, Mr Donte Robinson and Mr Rashon Nelson, both 23 at the time.

Before suing over the ordeal, they reached a confidential financial settlement with the company and got a commitment from the city of Philadelphia to invest US$200,000 to help young entrepreneurs.

“I want to make sure that this situation doesn’t happen again,” Mr Robinson said in an interview at the time. “What I want is for young men to not be traumatised by this, and instead motivated, inspired.”

Efforts to reach Mr Robinson and Mr Nelson on Tuesday were unsuccessful. NYTIMES

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