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In a groundbreaking ruling, a New Jersey jury unanimously sided with a former Starbucks employee, Shannon Phillips, who filed a lawsuit against the coffee giant for wrongful termination based on racial discrimination. 

The jury's verdict awarded Phillips a staggering $25.6 million, consisting of $25 million in punitive damages and $600,000 in compensatory damages. 

2018 Racial Firestorm

The lawsuit stems from an incident that occurred in April 2018 when two Black men, Donte Robinson and Rashon Nelson, were arrested at a Starbucks store in Philadelphia while waiting for a business meeting.

 The incident gained widespread attention and sparked nationwide protests, highlighting the issue of racial bias in public spaces. As a result, Starbucks temporarily closed its stores for a day to conduct racial bias training for its employees.

Less than a month after the arrests, Phillips, a regional director for Starbucks, received notice of her termination. 

Phillips, who had been with the company for nearly 13 years, vehemently denied any involvement in the incident and stated that she was not even present at the store on that day. 

She filed a lawsuit in 2019, alleging that her race played a significant role in her termination.

Starbucks Racial Discrimination Lawsuit

Following a six-day trial, the New Jersey jury ruled in favor of Shannon Phillips, holding Starbucks accountable for wrongful termination based on racial discrimination. The jury's decision to award $25.6 million in damages, included punitive damages.

Court documents reveal Starbucks' claimed that Phillips appeared overwhelmed and lacked awareness of the gravity of the Donte Robinson and Rashon Nelson arrests.

Phillips claims she "actively worked" on "crisis management" efforts. And "took steps to ensure that the retail locations within her area were a safe and welcoming environment for all customers, regardless of race," according to her 2019 civil complaint.

During the trial, key testimony came from a Black district manager at Starbucks, who testified that he believed Phillips' race played a role in her termination. At the time she was terminated, Phillips was the Regional manager and his boss.

 He also noted that his race likely shielded him from facing similar consequences. These statements further supported Phillips' claims of racial discrimination within the company.

Phillips' attorney Channa Lloyd said, "Starbucks chose not to terminate the District Manager of the store where the arrests took place, who was Black, but instead terminated his White supervisor, Ms. Phillips."

"Other companies are definitely going to have to be much more thoughtful and clear about why they're exercising terminations when they're faced with this type of situation," Lloyd added.