In October 2019, Plaintiff Shannon Phillips (“Phillips”) filed suit in federal court against Starbucks Corporation d/b/a Starbucks Coffee Company (“Starbucks”), alleging she was fired because she is Caucasian in a position of authority in the wake of the April 12, 2018, arrests of Donte Robinson (“Robinson”) and Rashon Nelson (“Nelson”) at a Starbucks located on 18th and Spruce Streets in Philadelphia.

Phillips sued Starbucks on racial bias claims under Title VII of the Civil Rights Act and New Jersey law, seeking economic loss and compensatory and punitive damages. Phillips had worked for Starbucks for 13 years before she was fired in May 2018. At the time of her termination, she held the position of Regional Director and oversaw around 100 stores in the greater Philadelphia area.

The lawsuit stems from an incident on April 12, 2018 when two customers, Robinson and Nelson, were arrested after refusing to leave a table at a Philadelphia Starbucks while waiting for an acquaintance to join them for a business meeting. A manager had asked them to leave because they didn’t order anything. A video of their arrest went viral, sparking protests and prompting Starbucks to issue an apology and embark on what it described in legal filings as the “largest corporate response in American history.”

After deliberating for more than five hours, the jury found that the race of Phillips was a determinative factor in the company firing her in violation of federal and New Jersey laws against discrimination and awarding her $600,000 in compensatory and $25 million in punitive damages.

Title VII of the Civil Rights Act, as amended, protects employees and job applicants from employment discrimination based on race, color, religion, sex and national origin. Title VII protection covers the full spectrum of employment decisions, including recruitment, selections, terminations, and other decisions concerning terms and conditions of employment.

Phillips, a non-minority, alleged her termination was “reverse race discrimination.” In cases involving “reverse race discrimination,” a plaintiff must demonstrate is as follows: (1) the plaintiff is qualified for her position; (2) the plaintiff suffered an adverse employment action; and (3) the adverse employment action gave rise to an inference of discrimination.  Only the third element was in dispute – whether the adverse action gave rise to the inference of discrimination.

As in most claims of discrimination, the facts or circumstances of an employee’s performance and the facts surrounding the termination take front and center stage. In this case, the facts surrounding her termination also supported her claim for “the inference of discrimination.”  Phillips alleged she was an excellent employee and had always received good performance evaluations.

Phillips alleged that after the incident on April 2, 2018, she worked closely with the District Manager for that particular store (who made the call to the police) and their employees and her superiors to coordinate Starbucks’ “crisis management” and ensure safety of the Starbucks’ employees at that store and other stores under her command. She was even encouraged to apply for a position to support Starbucks’ Government and Community Affairs Unit.

Phillips alleged that she was instructed to suspend one of her other managers, a Caucasian, at another Philadelphia store based on alleged race discrimination charges by that store’s employees (involving pay discrimination based on race), but that she was never asked to suspend the African-American District Manager of the store where the Donte Robinson incident occurred.  A few days after suspending the Caucasian manager, Phillips was terminated and it was explained to her “the situation is not recoverable.” This statement was never fully explained, according to Phillips, by her Starbucks’ superiors.

Among other arguments, Starbucks argued that Phillips did not sustain racial discrimination because she was replaced by a Caucasian male and that it had a legitimate non-discriminatory reason for Phillips’ termination. This included testimony from her supervisors that Phillips was overwhelmed after the incident, lacked awareness of the situation at Starbucks and failed to perform her essential functions of a Regional Director after the incident in April 2018.

The jury did not agree. In a unanimous decision, the jury found that Starbucks did wrongfully terminate Phillips and awarded her over $25 million in compensatory and punitive damages.  One of the key pieces of evidence that was discussed at the trial involved the lack of documentation or evidence to support Starbucks’ position as to their legitimate non-discriminatory reason for Phillips’ termination. Other than testimony of Phillips’ supervisors, there was not much in terms of documented incidents showing that Phillips was “overwhelmed” or “lacked the awareness of the situation.”

Documentation as to an employee’s pay, performance, incidents and/or time at a company should be documented from the start of their employment through the end of their employment. In particular, documents to support, explain, and demonstrate the reasons for adverse employment decisions should be carefully collected in “real time” at the time of the decision and maintained. Documented examples of the reasons for an employee’s termination is important and beneficial both for the employee and the employer.

If you have any question about the Starbucks verdict or other employment matters, please contact us at info@gstexlaw.com.  The attorneys in our Austin and Dallas have significant experience counseling clients in employment-related matters.

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