CAMDEN, N.J. – A recent legal battle involving Starbucks has taken another turn as a judge has ruled that the coffee giant must pay an additional $2.7 million in lost wages and tax damages to a former regional manager. This follows an earlier verdict in which the former employee was awarded more than $25 million after alleging racial discrimination against white employees in the aftermath of a high-profile incident involving two Black men in 2018.
Shannon Phillips, the former regional manager, initially won $600,000 in compensatory damages along with the staggering $25 million in punitive damages from a New Jersey jury. The jury concluded that her firing was influenced by her race, a violation of both federal and state anti-discrimination laws.
The U.S. district judge presiding over the case has now ordered Starbucks to pay an additional $2.73 million to Phillips, covering past and future lost earnings and benefits, as well as compensation for tax disadvantages due to the lump sum. The court documents reveal that the company contested this decision, arguing that Phillips had not proven her inability to earn an equivalent or higher income in the future.
The case stems from a 2018 incident in a Philadelphia Starbucks store, where a store manager called the police on two Black men, Rashon Nelson and Donte Robinson, who were sitting in the café without making a purchase. The incident sparked outrage and prompted allegations of racial profiling.
Phillips, who was the regional manager of operations in the Philadelphia area, southern New Jersey, and other locations, was not directly connected to the arrests. However, she claimed that she was instructed to place a white manager, who was also not involved in the incident, on administrative leave under false pretenses. She argued that this was a move to placate the community and unfairly implicated white employees.
At the time, Phillips objected to the decision, and she was fired less than a month later. The company’s justification for suspending the district manager, who had no involvement with the store where the arrests occurred, was allegedly rooted in claims that Black store managers received lower pay than their white counterparts. Phillips contested this argument, stating that district managers had no control over employee salaries.
Phillips’ lawsuit alleged that Starbucks was effectively attempting to “punish white employees” in the region to project an image of a proper response to the incident. Starbucks’ legal team countered by asserting that her termination was necessary for stronger leadership in the aftermath of the arrests.
Starbucks is now pursuing a new trial, citing concerns that jurors with negative opinions about the company were allowed to participate. They also claim that incorrect information in witness testimony had biased the outcome and that Phillips should not have been awarded “double damages” for both state and federal allegations.
Meanwhile, Phillips’ legal representation is pushing for Starbucks to cover $1.4 million in legal fees incurred between 2018 and 2023.
The video of the initial arrest triggered a nationwide outcry, leading Starbucks to settle with the two men for an undisclosed sum and offer them free college education. The men also reached a symbolic settlement with the city of Philadelphia for $1 each, accompanied by a promise to establish a $200,000 program for young entrepreneurs. The incident prompted the Philadelphia Police Department to revise its approach to dealing with trespassing accusations on private property, cautioning businesses against misusing police authority.
