Background

In 2018, two Black men were arrested at a Starbucks in Philadelphia for sitting in the coffee shop without ordering anything. The incident caused a national outcry and led to a discrimination lawsuit against the company.

The Lawsuit and Verdict

A former regional manager, Shannon Phillips, filed a lawsuit against Starbucks, alleging that she and other white employees were unfairly punished following the arrests. In June, a jury in New Jersey found in favor of Phillips, awarding her $600,000 in compensatory damages and $25 million in punitive damages.

Judge’s Ruling

U.S. District Judge Joel Slomsky recently ordered Starbucks to pay Phillips an additional $2.7 million in lost compensation and tax damages. The company had opposed paying any amount, arguing that Phillips had not proven she couldn’t have earned the same or more in the future.

Starbucks’ Response and Legal Proceedings

Starbucks is seeking a new trial, claiming that jurors with negative opinions about the company were allowed to remain on the case, witness testimony contained incorrect information, and Phillips should not have been awarded “double damages” on both state and federal allegations. Phillips’ lawyers are also requesting $1.4 million in legal fees.

Settlement and Aftermath

Following the incident, Starbucks reached a settlement with the two Black men for an undisclosed sum and offered them free college education. The men also reached a symbolic $1 settlement with the city of Philadelphia and secured a promise to establish a $200,000 program for young entrepreneurs. The Philadelphia Police Department implemented a new policy on handling trespassing incidents to prevent businesses from misusing police authority.