Starbucks Hammered Again: Fired Manager Awarded Additional $2.7 Million

Starbucks finds itself steeped in controversy again as Shannon Phillips, a Starbucks regional manager who previously won a staggering $25.6 million for wrongful termination, was awarded an additional $2.7 million for lost wages last week.

This judicial decision came on the heels of the notorious 2018 incident in Philadelphia where two Black men, Rashon Nelson and Donte Robinson, were arrested for sitting at a Starbucks store without making a purchase. The case attracted nationwide attention, prompting questions about racism, police procedures and public decorum.

Phillips, overseeing operations in regions like Philadelphia, wasn’t involved in these arrests. Nonetheless, she claimed in her lawsuit that she was unjustly ordered to suspend a White manager from another store, an individual also uninvolved in the arrests, on grounds she deemed untrue. Upon resisting this directive, Phillips was terminated within a month. Her lawsuit alleged that Starbucks was excessively eager to “punish White employees” in the affected region, seeking to assure the public they were addressing the incident.

Starbucks countered, arguing Phillips’ dismissal was due to a need for stronger leadership after the incident. They also sought a new trial, stating that jurors harbored negative views about the company and that witness testimonies contained inaccuracies.

While the viral video of the two men’s arrest heightened public scrutiny, Starbucks ultimately reached a confidential settlement with Nelson and Robinson. This included an offer of free college education. Moreover, they accepted a $1 symbolic settlement from the city of Philadelphia, which then pledged $200,000 to nurture young entrepreneurs. Interestingly, most retail establishments generally mandate a purchase if one wishes to occupy their seating, with failure to comply after repeated requests possibly resulting in arrest.

Phillips’ attorneys now seek an additional $1.4 million in legal fees from Starbucks for services provided from 2018 to 2023.

During her tenure at Starbucks, Phillips, with no college degree, had anticipated staying with the company until 70, especially given the generous compensation of around $289,000 annually. Following her abrupt termination in May 2018, she plunged into the job market, undertaking resume workshops and engaging recruiters. By August that year, Phillips secured employment at Raymour & Flanigan, albeit with a reduced pay scale and fewer benefits than her previous position.

Phillips also faced a health challenge in 2022, battling breast cancer. While undergoing chemotherapy and radiation treatments, she remained with Raymour & Flanigan. She argued that had she still been with Starbucks, she might have availed paid leave.

U.S. District Judge Joel H. Slomsky delivered the ruling in favor of Phillips. The amount constituted $1,053,133 in back pay, $1,617,203 in front pay, and $66,419 to compensate for the adverse tax implications of receiving a one-time award in such situations. The judge lauded Phillips’ proactive approach to employment post-Starbucks but limited the lost future pay to age 65.