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Starbucks must pay another $2.7 million to employee who said she was fired for being White

<i>Tracie Van Auken/EPA-EFE/Shutterstock</i><br/>A New Jersey court ordered Starbucks to pay an additional $2.7 million to a former employee who successfully sued the company for wrongful termination
Tracie Van Auken/EPA-EFE/Shutterstock
A New Jersey court ordered Starbucks to pay an additional $2.7 million to a former employee who successfully sued the company for wrongful termination

By Danielle Wiener-Bronner, CNN

New York (CNN) — A New Jersey court ordered Starbucks to pay an additional $2.7 million to a former employee who successfully sued the company for wrongful termination, claiming she was fired for being White.

In June, a jury had ruled in favor of Shannon Philips, who worked at Starbucks as regional director over the Philadelphia area. It returned a verdict of $25.6 million.

In an order Wednesday, Judge Joel Slomsky said Starbucks has to make the additional payment for damages.

Starbucks did not have a comment about the order Wednesday, but said in June that it was disappointed in the decision. It has gone on to file post-trial motions contesting the June outcome.

Phillips, who worked for Starbucks for about 13 years and managed a region of stores in the area, was fired after the arrest of two Black men at a Philadelphia Starbucks in April 2018, an incident which sparked outrage.

The two men were asked to exit the coffee shop after sitting at a table without ordering anything. The men, who declined to leave because they were waiting for a business associate, were escorted out of the coffee shop in handcuffs after a store manager called the police. They later reached settlement agreements with Starbucks and the City of Philadelphia.

Phillips was not involved in the arrests, according to a lawsuit first filed in 2019.

In that suit, Phillips said that when Starbucks fired her following the arrest, it was discriminating against her because of her race.

Starbucks “took steps to punish White employees who had not been involved in the arrests, but who worked in and around the city of Philadelphia, in an effort to convince the community that it had properly responded to the incident,” according to the complaint.

The 2018 arrest was a PR crisis for the company. At the time, Starbucks took several steps to try to make amends and prevent a similar incident from happening again, including changing its policy to allow people to use Starbucks’ restrooms and spend time in stores, even if they haven’t made any purchases.

The coffee chain also closed about 8,000 company-owned stores for an afternoon for a mandatory anti-bias training for roughly 175,000 employees.

Phillips said that Starbucks had ordered her to place a White employee on administrative leave as part of these efforts, due to alleged discriminatory conduct which Phillips said she knew was inaccurate. After Phillips tried to defend the employee, who according to the lawsuit was not involved in the arrests, the company let her go, she said.

The reason for termination, according to the complaint, was that “‘the situation is not recoverable.’” The complaint argued that this was “a pre-text for race discrimination,” adding that Phillips’ “race was a motivating and/or determinative factor in [Starbucks’] discriminatory treatment.”

Starbucks, which denied the claims at the time, said in a 2021 court filing that after the incident, “senior leaders and members of Partner Resources all observed Ms. Phillips demonstrate a complete absence of leadership during this crisis.”

Phillips, the company argued, “appeared overwhelmed and lacked awareness of how critical the situation had become.” Phillips’ manager ultimately decided to dismiss her “because strong leadership was essential during that time,” according to the document.

— CNN’s Kristina Sgueglia, Laura Ly and Zenebou Sylla contributed to this report.

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