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

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, 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.

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.