Starbucks Faces Million-Dollar Compensation Order
In 2018, Shannon Phillips, a former regional director of Starbucks, was fired following the unjustified arrest of two black men at a Philadelphia branch of the coffee shop. This incident sparked protests across the USA. Phillips filed a lawsuit against the company, alleging racial motivation in her dismissal. Recently, a New Jersey court ruled in her favor, ordering Starbucks to pay her million-dollar compensation.
The Incident at Rittenhouse Square
The incident took place on April 12, 2018, at a Starbucks branch located in the elegant neighborhood of Rittenhouse Square in Philadelphia. According to local press reports, one of the two black men who were waiting in the store was denied permission to use the bathroom as he hadn’t made a purchase.
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Furthermore, both men were asked to leave the café after sitting at a table without ordering. The men, identified as Rashon Nelson and Donte Robinson, refused to leave, stating that they were waiting for a business partner. The store manager, who was also black, called the police, resulting in the arrest of the two individuals. They were later released without charges.
The arrests were captured on video and shared on social media, leading to widespread outrage and protests. Starbucks faced accusations of racism in its handling of the situation.
Following the incident, the police chief of Philadelphia issued an apology for the way the arrest was handled. Starbucks responded by closing its 8,000 stores across the USA for a day to provide racial sensitivity training to its employees.
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Damage Control and Costly Consequences
In 2018, Shannon Phillips served as a regional operations manager for Starbucks in Philadelphia and other areas of the country. Despite not being directly involved in the incident, Phillips claims that the company ordered her to put a white manager, who had no connection to the incident, on administrative leave. She defended the manager and refused to comply with the order.
Rashon Nelson (left) and Donte Robinson. (CBS)
Despite her support for the manager, Phillips was fired less than a month later. In 2019, she filed a lawsuit against Starbucks, alleging racial discrimination in her termination. The lawsuit claimed that Starbucks took actions to punish white employees who were not involved in the arrests but worked in Philadelphia and the surrounding area, as a way to demonstrate a response to the incident.
Starbucks argued that Phillips was dismissed due to her lack of leadership during the crisis. They stated that she seemed overwhelmed and unaware of the severity of the situation. However, the jury in New Jersey sided with Phillips, ordering Starbucks to pay her $25.6 million in punitive and compensatory damages.
Additionally, Phillips will also seek back wages. Starbucks expressed disappointment with the ruling and is currently evaluating its next steps.
People protest in 2018 outside the Philadelphia Starbucks where two black men were arrested. (Michael Bryant/Philadelphia Inquirer via AP)
