Starbucks to pay additional $2.7M over wrongful termination lawsuit

A New Jersey federal judge ordered Starbucks to pay an additional $2.7 million to settle a wrongful termination lawsuit from a former regional director against the coffee giant. Starbucks had already been ordered to pay $25.6 million in punitive and compensatory damages to Shannon Phillips after a trial in June of 2023. Court documents show the $2,736,755 in payment ordered Wednesday, Aug. 16, covers back pay, front pay and tax gross.

In her wrongful termination lawsuit, Phillips claimed that “her race was a determinative factor” in Starbucks’ decision to fire her back in 2018. Her firing came less than a month after two Black men were arrested while waiting for a business meeting at a Philadelphia Starbucks.

An employee called 911, accusing the men of trespassing after they refused to either make a purchase or leave the store. The arrests sparked nationwide protests, prompting Starbucks to close some of its stores for a day for racial bias training. The two men eventually reached a private settlement with Starbucks and the city.

Phillips claimed in the lawsuit that she wasn’t at the store the day of the arrests, and was not involved in the arrests in any way. She said she “actively worked” on “crisis management” efforts and “took steps to ensure that the retail locations within her area were a safe and welcoming environment for all customers, regardless of race.”

In a memo opposing economic damages filed in July, Starbucks argued “that there is no evidence of intentional discrimination.” The company added that Phillips “has failed to present any evidence that she could not earn the same (or perhaps even more) in the future and has similarly presented no evidence, beyond her speculation, as to what benefits she may have received had she remained at Starbucks.”