Starbucks says it fired her for an ‘absence of leadership.’ She says it was because of her race. A jury returned a $25.6 million verdict in her favor

By Danielle Wiener-Bronner and Kristina Sgueglia, CNN

New York (CNN) — A jury on Monday found in favor of former Starbucks regional director Shannon Phillips, who sued the company for wrongfully firing her, claiming she was terminated for being White.

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.

The New Jersey jury returned a verdict of $25.6 million, including $25 million for punitive damages and $600,000 in compensatory damages, according to Console Mattiacci Law, which represents Phillips. The jury ruled unanimously after a six day trial, the lawyers said, noting that Phillips will also be seeking back and front pay.

Starbucks said it is disappointed in the decision and is evaluating its next steps, spokesperson Jaci Anderson told CNN.

This week’s verdict is the latest development in an incident that has sparked protest and outrage. In 2018, the two men were asked to leave 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 police on them. They later reached settlement agreements with Starbucks and the City of Philadelphia.

In a lawsuit first filed in 2019, Phillips said the company discriminated against her because of her race when she was let go.

The 2019 complaint said that following the arrest, 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.”

Phillips, who at the time oversaw areas including Philadelphia, 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, 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.

A crisis for Starbucks

The 2018 incident was a major PR crisis for the company. In the wake of the arrests, Starbucks took several steps to try to alleviate the situation.

Then-CEO Kevin Johnson apologized, saying that what happened was “reprehensible” and promising to make any changes needed to make sure that something like it doesn’t happen again.

Starbucks soon changed 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.

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

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