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Coffee City

Melissa Allison follows the world's biggest coffee-shop chain and other Seattle caffeine purveyors.

June 23, 2009 at 10:02 AM

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Starbucks pays $120,000 to settle racial discrimination lawsuit, but the check hasn't been cashed

Posted by Melissa Allison

Starbucks agreed in April to pay a former lead network engineer in Seattle $120,000 plus a mediator's fee to settle a lawsuit that alleges racial discrimination and retaliation "so severe that it required him to take a medical leave of absence."

Victor Washington of Shoreline, who is African-American and worked for Starbucks from September 2006 until May 2008, alleges in the July 2008 lawsuit that a white co-worker made racist comments to him such as repeatedly telling him to "fetch" the co-worker's umbrella and tie his shoes for him. In the lawsuit, Washington says he complained to his supervisor and to Starbucks' human resources department, and that they took no action, although the supervisor increased his workload and gave him undesirable assignments.

Starbucks said in a written statement that it investigated Washington's allegations while he worked there and found them without merit, and that it settled the case to avoid further legal costs.

The company wrote Washington a check for $120,000, which it says in a court filing was "compensation for emotional distress and attorneys' fees." But Washington has not cashed it, and Starbucks last week asked the U.S. District Court for the Western District of Washington to enforce the settlement.

In a telephone interview, Washington said he plans to dispute the amount of the settlement agreement, which he thinks should be $140,000.

"I think they got out extremely cheap as it was," he said. "The only reason I settled was because of issues with my former lawyer."

Washington's former lawyer, Joyce Thompson of Frank Freed Subit & Thomas in Seattle, did not return phone calls. She and attorney Jillian Cutler have asked the court to tell Starbucks to cancel its outstanding check to Washington and cut two separate checks -- one for their fees and costs of $31,684 and a second check to Washington for the balance of $88,316.

Starbucks said in a written statement that, "Our thorough investigation proved Mr. Washington's allegations to be completely unsubstantiated and without merit. We strongly believe we would have prevailed had this case gone further. However, we made a fiscally sound business decision to avoid further costs of litigation. Our hope is that this issue will be resolved soon so we, and Mr. Washington, can move on."

It is unusual for terms of a legal settlement between an employer and a former employee to be publicly available, because both sides typically agree not to discuss terms of settlement and ask that the court seal any documents with settlement details.

In 2006, Starbucks made a five-year, $2.5 million commitment of cash and donations to the National Association for the Advancement of Colored People.

At that time, the NAACP then-CEO Bruce Gordon said, "We applaud Starbucks leadership role in supporting programs to ensure a society in which all individuals have equal rights and there is no racial hatred or racial discrimination."

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