A former regional director at Starbucks alleged that the coffee giant fired her because she's white. A jury just awarded her over $25 million.
Shannon Phillips, who oversaw about 100 coffee shops across four states, was fired by the company after a 2018 incident at a store in Philadelphia involving the arrests of two Black men. A video of the arrests went viral, leading to protests outside the location and prompting more than 8,000 Starbucks stores to undergo racial-bias training.
While Phillips was not involved with the arrests, she lost her job less than a month later after objecting that another white manager, who had been with the company for 15 years, was being placed on administrative leave due to alleged discriminatory conduct unrelated to the Philadelphia incident. The only reason Phillips was given for her firing was that "the situation is not recoverable," her 2019 lawsuit stated.
"I was terminated because I am white," Phillips said in court documents. "If I was Black, I would not have been terminated. I was terminated because I complained of and objected to race discrimination." The suit also accused Starbucks of taking steps to "punish white employees who had not been involved in the arrests … in an effort to convince the community that it had properly responded to the incident."
Phillips claimed her firing violated Title VII of the Civil Rights Act of 1964. In a 2021 court filing, Starbucks denied the allegations and stated that Phillips demonstrated a "complete absence of leadership" during the ordeal, resulting in her termination.
In June, an eight-member federal jury in New Jersey returned a unanimous verdict of $25.6 million— consisting of $25 million in punitive damages and $600,000 in compensatory damages—in favor of Phillips, according to her attorneys from Console Mattiacci Law.
Peter Spanos, an attorney with Taylor English Duma LLP in Atlanta, said the jury believed the evidence proved that Starbucks had an agenda to terminate nonminority employees who did not vigorously support Starbucks' public relations campaign to redeem its corporate image after the April 2018 incident.
"One conclusion that may be drawn from this jury verdict is that Starbucks' massive, nationwide campaign to respond to adverse publicity from the April 2018 incident backfired because it led to 'an inference of discrimination' that Starbucks had an 'agenda' against Caucasian employees," Spanos said.
Jaci Anderson, director of corporate communication at Starbucks, told SHRM Online that the company did not have a comment on the court decision at the moment.
[SHRM Online: The Damaging Effects of Workplace Racism]
Discrimination Against White Workers Faces Scrutiny
One-fourth (25 percent) of people in the U.S. say they have seen "a lot more" discrimination against white Americans since 2017, according to a 2022 survey.
The Starbucks ruling is not the first time a company has been ordered to pay for allegedly discriminating against a white worker. In 2021, a federal jury in North Carolina awarded $10 million in damages to a former health care executive who argued that he was fired because he is a white man and his employer was trying to diversify its workforce.
According to the U.S. Equal Employment Opportunity Commission (EEOC), "You are protected from different treatment at work on the basis of your race, whether you are white, Black or some other race."
Stephen Paskoff, CEO of training company Employment Learning Innovations in Atlanta and a former EEOC litigator, explained that there is serious tension in the legal space about how to balance equal employment opportunity and diversity, equity and inclusion (DE&I).
"The jury [in the Starbucks case] looked at this as discrimination, perhaps masquerading as DE&I," Paskoff said. "That speaks to the fact that you've got to be consistent in what you do and can't make decisions that are based on race, religion, age, et cetera. It can be extraordinarily inflammatory and liability-producing when you do."
Employers must ensure they're not engaging in disparate treatment related to race, he added. Employment decisions that are motivated by race can deteriorate an organization's culture, impact recruitment and retention rates, and be detrimental to their bottom line.
"Not only is Starbucks paying a big legal price," Paskoff said, "but you also have people now mad at them for apparently engaging in active racial discrimination towards this person."