SBUX Starbucks Corporation

By Scott Calvert 

Starbucks Corp. and the city of Philadelphia Wednesday announced separate settlements with two black men whose arrest at a downtown Starbucks in April sparked protests and prompted an apology from the Seattle-based company.

Starbucks said it would pay Rashon Nelson and Donte Robinson an unspecified sum. It said the agreement, reached earlier this week, will also include "continued listening and dialogue between the parties and specific action and opportunity." The company said further details will come in "a mutually agreed public statement."

Philadelphia, meanwhile, will pay each man $1 and fund a $200,000 grant aimed at helping local students who aspire to be entrepreneurs.

A lawyer for the men didn't immediately respond to a request for comment.

On April 12, a Starbucks manager called police when Messrs. Nelson and Robinson allegedly refused to leave the cafe after they were denied use of the restroom because they hadn't made a purchase. They have said they were waiting for a business meeting. A video of the men being handcuffed by police went viral.

The men weren't charged with any crimes.

"I want to thank Donte and Rashon for their willingness to reconcile," Starbucks Chief Executive Kevin Johnson said in a statement. "Starbucks will continue to take actions that stem from this incident to repair and reaffirm our values."

The incident sparked protests outside the Center City cafe and calls for a company boycott. The manager who called police no longer works there, Starbucks has said. Later this month, the chain plans to close all of its more than 8,000 U.S. company-owned stores for an afternoon to provide employees with antiracial-bias education.

Philadelphia officials said Messrs. Nelson and Robinson approached the city about the $200,000 grant and agreed not to sue the city in return for the $1 payments.

"I am pleased to have resolved the potential claims against the city in this productive manner," Philadelphia Mayor Jim Kenney said in a statement. "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."

Mr. Kenney said Messrs. Nelson and Robinson "invited us to partner with them in an attempt to make something positive come of this."

The mayor's spokesman said the city agreed to fund the grant "for a pilot program for city public high-school students with aspirations of becoming entrepreneurs." He said Messrs. Nelson and Robinson won't receive any money from the grant.

Philadelphia Police Commissioner Richard Ross offered a public apology to the two men in April, saying he regretted initially saying the officers who arrested them did nothing wrong. The commissioner defended the officers' actions in other ways, though, and denied that race had affected the police response.

Write to Scott Calvert at scott.calvert@wsj.com

(END) Dow Jones Newswires

May 02, 2018 15:40 ET (19:40 GMT)

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