Discrimination Claims Brewing: Early Observations in the Saga of Missouri v. Starbucks
In February 2025, the state of Missouri sued Starbucks Corporation, alleging the company committed race discrimination when it announced and followed particular steps “to advance racial and social equity.”
Grounds For Suit?
The primary alleged practices at issue in the suit were Starbucks’ Black, Indigenous, and people of color (BIPOC) mentorship program and alleged preferential access to training for members of diversity-related affinity groups; setting goals for BIPOC representation in its corporate (30%) and other (40%) roles; and pinning a portion of executive compensation and bonuses to BIPOC retention, participation in the BIPOC mentorship program, and an evaluation of the diversity of the executive’s management team.
Starbucks announced these “steps” in October 2020 and reported on them in various shareholder communications over the next four to five years.
Observations
Observation No. 1: Starbucks is getting roasted for being an early adopter of a too-far trend. Starbucks made the news in 2018 when a white manager in Philadelphia called police to remove two Black businessmen who were, by their account, waiting for a colleague to order. Starbucks addressed the issue pretty swiftly, sending its CEO to meet with the men and the police commissioner, clarifying an ambiguous policy on noncustomer bathroom access that had been at the root of the incident, and closing all stores for a full day for racial bias training the month after the incident. I’m no public relations expert, but I think those moves may be studied and probably lauded in future business and crisis management courses.
Rushing to declare it would take specific actions on the other side of the counter, however, may be Starbucks’ undoing. If Missouri’s attorney general (AG) is right, Starbucks went beyond advocating for certain policies as a corporate citizen, and by setting targets for employee representation in its workplace(s) by race, it went beyond permissible statistical analyses to conduct an internal analysis of whether its recruitment, hiring, retention, and promotion practices were nondiscriminatory.
Observation No. 2: Just because everyone else is doing it doesn’t mean it’s a good idea. Missouri’s AG also laments the widespread use of environmental, social, and governance (ESG) metrics generally in executive compensation across the S&P 500 and points out other suits in which corporations were found to have tied employee diversity metrics to executive compensation, including Duvall v. Novant Health, Inc. In the case, a white former executive ultimately recovered over $3 million in lost compensation (though his $10 million punitive damages award was reduced to $300,000 by the trial court and set aside entirely on appeal).
Observation No. 3: It seemed like a good idea at the time—the number one source of Missouri’s allegations is Starbucks’ own publications. Missouri’s 59-page complaint is littered with footnotes, 171 of them to be exact, and the majority of them reference various shareholder and financial reports (I’m not a corporate attorney of any sort and could scarcely tell you the difference between a 10-K and a 401(k), but basically we’re talking about titles with words like “Proxy,” “Annual Meeting,” and “Fiscal” here), as well as employee communications and press releases.
Assuming no errors in transcription or truncation, the state of Missouri was able to quote extensively from Starbucks’ own publications, housed on its website. There’s little doubt that the authors of those reports were proud to trumpet their results to the shareholders and others who wanted to see the company lead its peers and thought it was good business for Starbucks to push these priorities.
Takeaway
Starbucks has filed a request to dismiss Missouri’s complaint, and the employees’ union has filed an amicus brief in support of the request to dismiss. The company’s request rests primarily on nuances of standing and other technical details, the discussion of which could cure insomnia. The union focused on the much more interesting, but rarely asserted, statutory exception permitting limited frameworks of protected class-based favoritism to redress past discrimination—a topic that will have to wait for another day.
Whitney Brown is an attorney with Lehr Middlebrooks Vreeland & Thompson, P.C., in Birmingham, Alabama, and can be reached at 205-323-9274 or wbrown@lehrmiddlebrooks.com.
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