Starbucks launched a multimillion-dollar global brand campaign in 2014 called “Meet Me at Starbucks.” The ad focused not on coffee, but instead on the idea that Starbucks stores were a great place to socialize,

whether to catch up with friends, conduct business, or hold a group meeting.²³⁹ But in some Starbucks locations,

it was only OK to hang out if you were buying something.

Up until mid-2018, Starbucks didn’t have a corporate policy on loitering. Instead, individual stores were expected to set their own rules about whether people could sit inside or use the restroom for free; at some locations, the answer was yes, but at others, it was no.²⁴⁰ This was the case at a Philadelphia Starbucks where two black men were arrested for trespassing and disturbance. Business partners Donte Robinson and Rashon Nelson were waiting to meet with an associate when one of them asked to use the restroom. They hadn’t purchased anything, and the store manager called the police after the men refused to leave. A video of Robinson and Nelson being taken away in handcuffs went viral and sparked public outrage and accusations of racial profiling.²⁴¹

Starbucks CEO Kevin Johnson apologized publicly for the incident and flew to Philadelphia to meet with Robinson and Nelson in person.²⁴² The men settled with Starbucks for an undisclosed amount plus an offer of a free college education through the company’s partnership with Arizona State University. They also settled with the city of Philadelphia for a symbolic $1 each and a promise that the city would start a $200,000 entrepreneurship program for its public high school students.²⁴³

The Philadelphia location did have a no-loitering policy, but the guidelines for whether police should be engaged to enforce rules varied by region and may have been difficult for managers to interpret. Johnson said that threats and serious disturbances may warrant law enforcement, but that the Philadelphia manager’s decision to call the police in this situation was “completely inappropriate.”²⁴⁴ A corporate spokesperson said the manager was no longer employed by Starbucks as part of a “mutual decision.”²⁴⁵ The company closed more than 8,000 of its U.S. locations for an entire day soon after the event to conduct training on racial and other unconscious biases.²⁴⁶

Starbucks eventually announced that it was changing its corporate policy (or lack thereof) on loitering.

In a statement, the company said, “any person who enters our spaces, including patios, cafes and restrooms,

regardless of whether they make a purchase, is considered a customer.”²⁴⁷ Some praised the company’s decision,

but others questioned whether the decision made good business sense.

Questions

What would you have done if you were CEO of Starbucks?

1. I would not have instituted a corporate loitering policy.

Decisions on how to manage customers and when to involve police should be made by store-level leadership, not corporate executives. Some locations are busier than others and should be able to decide whether nonpaying customers are taking up space that would otherwise go to paying customers. Managers should also have the discretion to call the police when they feel it’s appropriate. A single bad decision by one store manager shouldn’t represent the entire company, and most managers know how to apply these types of policies in a fair and nondiscriminatory fashion. The additional bias training will help prevent similar incidents from occurring in the future.

2. I think the new corporate loitering policy is a good idea. This type of leadership should come from the top of the organization and set the tone for what’s important to the company. A corporate policy would provide clearer guidance to store managers on how to handle nonpaying customers and would also protect the company from liability due to store managers making bad decisions. Starbucks should also provide clear and consistent guidelines for managers on when it’s appropriate to call law enforcement. 3. I think that corporate loitering policies might be a good idea, provided they do not lead to excessive lost business for particular stores. For example, a good policy might state that loitering is welcomed as long as there are no paying customers waiting for a seat. If paying customers don’t have anywhere to sit, then nonpaying customers should leave to make room for them. I think all employees should participate in unconscious-

bias training to ensure the policy is applied fairly and consistently.

4. Invent other options.