A New Jersey jury has awarded a white former Starbucks employee $25.6 million in damages after finding her race was a “determinative factor” in Starbucks’ decision to terminate her. During closing arguments, Shannon Phillips’ attorney alleged Starbucks fired her as a “sacrificial lamb” to appease activists who demanded action following community outcry over the arrest of two black men at a Philadelphia Starbucks.
Phillips’ complaint included federal and state claims. The complaint made federal claims under Title VII of the Civil Rights Act of 1964 and Section 1981 of the Civil Rights Act of 1866 and a state claim under the New Jersey Law Against Discrimination. Phillips prevailed on all three claims, and the jury awarded her compensatory and punitive damages.
Starbucks hired Phillips in 2005 as a district manager and promoted her six years later to Regional Director of Operations for locations in “Philadelphia, Southern New Jersey, Delaware, and parts of Maryland.” Phillips’ complaint alleges she consistently “received positive performance evaluations.”
Things took a turn, according to the complaint, when “two Black men were arrested at the 18th and Spruce Street location” on April 12, 2018. Although that location fell within Phillips’ territory,’ she “was not involved in the arrest in any way.”
In her capacity as Regional Director, Phillips “took steps . . . to address strong community reaction” after the arrest and “actively sought to ensure the safety of [Starbucks’] employees and customers.” Phillips collaborated with two Philadelphia-area district managers, Paul Sykes and Ben Trinsey, to respond to the outcry according to the complaint.
Starbucks reached a settlement agreement with the two arrested men on May 2, 2018. Five days later, Phillips was allegedly summoned to a meeting and ordered to place Trinsey, a white male employee not responsible for the 18th and Spruce Street location, on suspension due to “allegations of race discrimination that had been made against him.”
“[N]on-white, salaried managers at Trinsey’s stores had made claims that they were paid less than white employees.” Phillips’ complaint relates her objections to this suspension because Trinsey, as a district manager, “could not have any input on employee salaries,” which were set by Starbucks’ Partner Resources. [emphasis in original]
According to the complaint, Sykes, a black male employee, faced no disciplinary action despite overseeing the 18th and Spruce Street location where the arrests occurred and having “promoted to the [store manager] position ‘the employee’ responsible for making the call to police that lead to the arrest and the subsequent community reaction.”
The day after the Trinsey suspension meeting, Camille Hymes, the Vice President of Operations, allegedly summoned Phillips to a meeting “to negotiate her separation package as she was being terminated.” The only reason Phillips received “for her pending termination was ‘the situation is not recoverable’,” which the complaint argued was a “pre-text for race discrimination.”
Starbucks argued Phillips’ termination stemmed from her being “physically and mentally absent from meetings” and “appear[ing] overwhelmed.” Starbucks further argued Phillips “lacked awareness of how critical the situation was for Starbucks and its partners” and “failed to perform the essential functions of a Regional Director” following the incident.
“When [Phillips] told Hymes, upon learning of her pending termination, that her performance had been exceptional and that she had last received a bonus only the month prior, Hymes agreed,” but Phillips was terminated one day later and “replaced by substantially less qualified employees who had not complained of race discrimination by [Starbucks].”
On the federal claims, the jury awarded Phillips $300,000 in compensatory damages for harm done. The jury also awarded her $12.5 million in punitive damages for her federal claims after finding Starbucks acted with “reckless indifference to [Phillips’] federally protected right not to be discriminated against in employment on account of her race.”
On the state claim, the jury awarded Phillips $300,000 in compensatory damages for harm done. The jury also awarded her $12.5 million in punitive damages for her state claim after finding Starbucks’ “upper management” acted with “wanton and willful disregard of [Phillips’] right not to be discriminated against in employment on account of her race.”
Legal Insurrection has extensively covered another lawsuit related to questionable claims of racial profiling against customers. In 2016, Gibson’s Bakery in Oberlin, Ohio, caught a black Oberlin College student shoplifting two bottles of wine. Students and community members organized protests against the bakery, alleging Gibson’s Bakery had a history of racial profiling. According to a lawsuit filed by Gibson’s Bakery, Oberlin College produced materials in connection with the protests and libeling the company.
Gibson’s Bakery won its libel lawsuit against Oberlin College for its role in producing protest materials that accused the bakery of having a history of racial profiling. After the Ohio Supreme Court declined Oberlin College’s appeal, the college paid damages and interest of more than $36 million to Gibson’s Bakery.
The jury verdict sheet outlining the jury’s findings and determination of damages:
Phillips’ original complaint:
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