CAMDEN, N.J. – A federal court jury has found in favor of a white former Starbucks store manager who claimed she faced racial discrimination and firing from the coffee company after two Black men were controversially arrested at a Philadelphia store location, in the amount of $25.6 million.
Plaintiff Shannon Phillips of Woolwich Township, N.J. first filed suit in the U.S. District Court for the District of New Jersey on Oct. 28, 2019 versus Starbucks Corporation, of Seattle, Wash.
Phillips claimed the coffee giant discriminated against her and other Caucasian employees in the aftermath of the controversial arrests of two Black men at a Philadelphia store location.
In April 2018, store customers Donte Robinson and Rashon Nelson were asked to leave a Starbucks coffee shop in Philadelphia after sitting at a table without ordering anything. The men, who did not 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.
Robinson and Nelson later reached settlement agreements with both Starbucks and the City of Philadelphia. The terms included Starbucks undergoing company-wide racial sensitivity training.
Prior to her being let go, Phillips was charged with overseeing Starbucks stores in southern New Jersey, the Philadelphia area, Delaware and parts of Maryland. Two of her subordinates included district managers who oversaw stores in Philadelphia, one of whom included the district manager responsible for the store where Robinson and Nelson were arrested.
In the aftermath of the incident, Phillips claimed she worked to repair community relations after the arrests, but that “Starbucks took steps to punish white employees who weren’t involved in the incident.”
After Starbucks settled with Robinson and Nelson in early May 2018, Phillips alleged she was asked to put one of her district managers, a Caucasian male, on suspension for allegedly paying non-white employees less than their white counterparts.
Phillips’ lawsuit said that was “factually impossible” because district managers did not have the power to set salaried employee compensation, due to Starbucks’ own internal company policies and procedures.
Phillips’ lawsuit stated that the Caucasian male district manager in question had worked for Starbucks for 15 years, and that she had never observed any racially discriminatory comments or conduct from him.
In the lawsuit, Phillips said that same district manager was not responsible for the store where Robinson and Nelson were arrested and had no connection to that incident, but that an African-American district manager who did oversee that store was neither fired nor placed on suspension.
On May 8, 2018, Phillips said she was told she would be fired due to her “situation not being recoverable,” according to her lawsuit. She alleged she was replaced by “substantially less-qualified employees who had not complained of race discrimination.”
A spokesperson for Starbucks had initially denied the claims of Phillips’ lawsuit and said the company is prepared to defend against them in court.
“Starbucks exercised reasonable care to prevent and promptly correct any discriminatory or retaliatory behavior, if any such conduct occurred, and Phillips unreasonably failed to take advantage of any preventative or corrective opportunities provided by Starbucks or to avoid harm otherwise,” the company later added in a March 5, 2020 answer to the complaint.
According to the company, all actions the company took with respect to Phillips were for legitimate, non-discriminatory, non-retaliatory reasons and Starbucks would have taken the same actions regarding Phillips in the absence of any unlawful motivating factor, if such a factor existed.
After a designated placement transfer to a presiding judge from the U.S. District Court for the Eastern District of Pennsylvania in May, a second amended complaint was filed in Aug. 17, 2020 and that in turn was answered by Starbucks on Aug. 27, 2020.
Starbucks filed a motion for summary judgment on Nov. 11, 2021, which argued the Court should dismiss Phillips’ case for multiple reasons, chief among which was her failure to lead during a moment of decision.
The company said Phillips “appeared overwhelmed, ‘completely paralyzed,’ driven by ‘panic,’ and lacked awareness of how critical the situation was for Starbucks and its partners; did not attend scheduled meetings or showed up late; was physically and mentally absent from meetings; was sometimes unreachable by her team; appeared disengaged and stood in the corner at meetings where she was expected to lead or where Starbucks’ executive leadership was present; was unable to respond to questions and did not lead the discussion during partner roundtable sessions and lacked awareness with respect to pay disparities in her market.”
Additionally, the company pointed to the fact that Phillips’ successor was of the same racial background as her.
“Starbucks did not discriminate against Phillips because of her race nor did it retaliate against Phillips because she objected to Benjamin Trinsey’s suspension. Starbucks had legitimate reasons to terminate Phillips – her complete failure to lead her team during a key moment in Starbucks history. Indeed, there is no evidence that creates an inference of discrimination. Camille Hymes [Regional Vice-President for Mid-Atlantic Retail Operations], on whom Phillips pegs the discriminatory animus, hired someone who is the same race as Phillips to replace her, and even recommended Phillips for the TLA position,” the motion stated.
“Moreover, Starbucks did not hire Phillips for the TLA position because it decided to abandon the position and not hire anyone for the position. Because Phillips cannot meet her burden to prove that Starbucks’ decisions related to her employment were a pretext for discrimination, Starbucks is entitled to summary judgment. Accordingly, Starbucks respectfully requests that the Court enter judgment in its favor and against Phillips and dismiss her case with prejudice.”
In an Aug. 31, 2022 memorandum opinion, U.S. District Court for the Eastern District of Pennsylvania Judge Joel H. Slomsky (presiding in an assist to the New Jersey federal bench) ruled that Phillips had in fact put forth a prima facie case that she and other Starbucks employees were discriminated against for being white.
The judge pointed to the contrast between manager Paul Sykes, who is Black and was not disciplined after the arrests, and a white manager, Trinsey, who was suspended over a race-related wage equity dispute during the same period, as supporting evidence for Phillips’ claims.
However, Slomsky also found that Starbucks presented a legitimate, non-discriminatory reason for firing her – her perceived lack of leadership after the arrest incident, her physical and mental absence from meetings and appearing to be overwhelmed by the events surrounding her – and dismissed her retaliation claims.
On May 1, each side’s counsel issued pre-trial memorandums outlining their perspectives on the case.
“It is undisputed that in the month that followed the April 2018 arrests, defendant took adverse employment action against three Philadelphia-based employees and that all three of them are white. It is undisputed that defendant has never taken any adverse action against any Black employee in connection with the April 2018 arrests – including Mr. Sykes who oversaw the retail location where the arrests took place. Mr. Sykes himself believes that plaintiff’s race played a role in defendant’s decisions to terminate plaintiff, suspend Mr. Trinsey and retain him, testifying: ‘I did find it interesting because it happened in my district, and I certainly didn't cause that, but it was in my district and it was my manager and I felt really bad with what happened with [Mr. Trinsey] and then what happened with [plaintiff] because they were the furthest from it and I was the closest to it,” per the plaintiff’s memorandum, in part.
“This is not a coincidence. Plaintiff was fired because she is white. Defendant’s conduct violated the law – namely, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866 and the New Jersey Law Against Discrimination.
Starbucks, meanwhile, asserted that it had made the right decision in firing Phillips.
“Running out of excuses, Ms. Phillips now equates her termination to an insulting conspiracy by Starbucks to rid the Philadelphia Market of its white employees in order to correct its public image following the arrests of the two Black customers. There is no evidence to support this theory. In fact, the evidence demonstrates the opposite. Ms. Phillips was replaced by another white employee. Had Starbucks been seeking to rectify its public image by firing White employees in leadership connected to the arrests, then Starbucks would not have hired a white employee to replace Ms. Phillips,” according to the company’s memorandum.
“Finally, Ms. Phillips attempts to use Benjamin Trinsey, Philadelphia District Manager, to support her conspiracy because he is a white employee who no longer works for Starbucks following the arrests. However, Starbucks did not terminate Mr. Trinsey. In May 2018, several employees complained of Mr. Trinsey’s treatment towards partners, including his inappropriate comments about race and sexuality in addition to allegations of pay disparities. Starbucks suspended Mr. Trinsey so that it could investigate these partners’ complaints of race and sex discrimination against Mr. Trinsey. Ms. Phillips repeated denial of Starbucks’ requests that she suspend Mr. Trinsey to allow Starbucks to investigate the claims against him because of her friendship with Mr. Trinsey further emphasizes Ms. Phillips’ lack of awareness regarding the issues in her market, in particular those involving race. Starbucks did not expect Ms. Phillips to be the perfect leader, however, it did expect her to be present with a willingness to try and listen. Ms. Phillips could not even do that.”
UPDATE
After a six-day trial, the federal court jury in Camden, N.J. found in Phillips’ favor, to the tune of $25.6 million and in agreement with her argument that Starbucks fired her because she is white, and not due to any failures of management or leadership on her part.
$25 million of the award was comprised of punitive damages, while $600,000 was tied to compensatory damages.
Specifically, the jury decided that Starbucks viewed the color of Phillips’ skin as a key factor in firing her, which it believed violated anti-discrimination laws both on the federal level and on the state level in New Jersey.
“The jury unanimously found that Ms. Phillips’ race was a determinative factor in her termination. We are very grateful for their attentiveness and work in this case,” lead trial counsel for the plaintiff, Laura C. Mattiacci, said.
Furthermore, Slomsky will consider a future petition for Phillips to be awarded back pay and future wages.
Counsel for Starbucks did not respond to an inquiry from The Pennsylvania Record for comment.
The plaintiff is represented by Stephen G. Console, Laura C. Mattiacci and Katherine Charbonnier Oeltjen of Console Mattiacci Law in Moorestown, N.J.
The defendant is represented by Hannah Lindgren and Tara Param of Littler Mendelson and Richard R. Harris of Holland & Knight, all in Philadelphia.
U.S. District Court for the District of New Jersey case 1:19-cv-19432
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com