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Starbucks reaches settlement in racial bias scandal

Starbucks reaches settlement in racial bias scandal

The city sets up $200k program as part of settlement

Following a racial discrimination scandal at a Starbucks in Philadelphia, the Seattle-based coffeehouse giant said it has reached a settlement with the two men involved in the incident.

The agreement made with Donte Robinson and Rashon Nelson includes an undisclosed financial settlement, and an offer to pay for their undergraduate degrees at Arizona State University through the Starbucks College Achievement Plan. The settlement comes less than a month after both men, who are black, were arrested for trespassing while sitting in the cafe without making a purchase.

In a joint statement, the men said: "We appreciate the opportunity to have meaningful discussions with Kevin Johnson and the group around the table to address hard issues. We all recognize the importance of communication about differences and solutions, and that we will be measured by our action not words.”

The city of Philadelphia also reached a settlement with two men that calls for Nelson and Robinson to receive $1 each. The payment is symbolic, and includes an agreement for the men not to pursue a lawsuit against the city or its employees, spokesman Mike Dunn told Nation’s Restaurant News.

The city has also agreed to fund a $200,000 pilot program for city public high school students with aspirations of becoming entrepreneurs, Dunn said.

Mayor Jim Kenney said he was pleased to prevent potential claims against the city.

“This was an incident that evoked a lot of pain in our city, pain that would’ve resurfaced over and over again in protracted litigation, which presents significant legal risks and high financial and emotional costs for everyone involved,” Kenney said in a statement. 

Since the incident, CEO Kevin Johnson has been working furiously to restore confidence in the brand by apologizing in various national media interviews. He called the incident “reprehensible” and blamed local store practices that call for asking people who are not customers to leave the store. The manager at the café has also since left the company.

On Wednesday, Johnson thanked Robinson and Nelson for “their willingness to reconcile.”

“I welcome the opportunity to begin a relationship with them to share learnings and experiences,” he said in a statement. “And Starbucks will continue to take actions that stem from this incident to repair and reaffirm our values and vision for the kind of company we want to be.”  

Starbucks said further details about the settlement will be provided in a mutually agreed public statement.

Starbucks will be closing 8,000 company-owned stores in the afternoon of May 29 for a training meeting with nearly 175,000 employees. The educational program is designed to ensure Starbucks employees and customers feel safe and welcome, the company said.

Contact Nancy Luna at [email protected] 
Follow her on Twitter: @FastFoodMaven

Correction: May 02, 2018
This story was updated with more information on the Starbucks' end of the settlement.
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