Shipley Do-Nuts owner accused of sexual misconduct and racism

HOUSTON, Texas (KTRK) -- Former Shipley Do-Nuts workers say there is something not so sweet going on behind the scenes of one of Texas' favorite brands.

Lawrence Shipley III is accused of groping three women identified as long-time employees in a lawsuit filed Friday in Harris County.

Attorneys for Martha Garcia, Elizabeth Peralta, and Esmeralda Sanchez allege the women were terminated in December 2016 after Shipley had created a hostile work environment.

The nine-page lawsuit chronicles allegations of sexual misconduct, racial discrimination, and even false imprisonment as Shipley patrolled a company-owned home with a gun.

"Unwelcome touching....and unwelcome sexual comments"

Stories of Shipley's alleged groping and humiliation are described in full detail in the court filing.

According to the lawsuit, Peralta alleges her boss hugged her "tight across her front and touched her rear or buttocks. He stared at her breasts and crotch area. He spanked her rear. He made comments about her appearance."

While Garcia also accused Shipley of similar actions, the lawsuit describes an incident involving Sanchez in which the owner allegedly did nothing to protect her from sexual harassment.

"Christopher Halsey, Warehouse Supervisor, stared at Sanchez's breasts and made an inappropriate comment about what he was thinking about, insinuating something of a sexual natural," the lawsuit reads. "When Sanchez complained to Lawrence Shipley, he faulted Sanchez for her behavior or her dress, saying she encouraged Halsey."

The lawsuit also alleges Halsey was never disciplined for his illegal conduct.

Allegations of racial and national origin discrimination

Shipley is also accused in a rash of racist incidents, from the use of racial epithets ("wetback") to allegations he repeatedly asked if Sanchez was "legal."

"He said 'you Mexican people' in reference to Sanchez and other Mexican employees. He called Sanchez and other Mexican female employees 'girls.' He mocked Sanchez's accent," the lawsuit alleges.

The lawsuit also details claims by Garcia, who said Shipley often commented that her clothes or accessories were not appropriate "for a Mexican."

The three women allege that Shipley only invited white workers to the company Christmas party.

"He said that Mexicans are 'caca,'" Shipley is accused of saying.

Locked in and unable to leave

One of the most disturbing allegations in the lawsuit describes Shipley, armed with a gun, preventing Garcia from leaving a house owned by the company.

"After Lawrence Shipley terminated her employment on December 16, 2016, he locked her in a company-owned house that she was cleaning because Lawrence Shipley had evicted her elderly mother, a former Shipley employee, from her long-term home," the lawsuit says. "He locked her into the house without her consent and had no legal authority to falsely imprison her. She has a just fear of injury to her person, property and reputation."

Attorneys for Garcia allege the incident caused her severe emotional distress, and all three women are seeking $1 million in damages for mental anguish and loss of income, in addition to back pay.

Lawyers for the women released this statement to Eyewitness News on Sunday:

We will not discuss in detail pending litigation. We are confident our clients will prevail on their claims against the Shipley defendants.

On Tuesday afternoon, Shipley's marketing and events director, Stacey Michel, also released this statement:

The erroneous claims by these former employees named in this lawsuit are unfounded. This is nothing more than a retaliation lawsuit against Shipley Do-Nuts and Lawrence Shipley, III for their termination in December of 2016, and is linked with ongoing litigation in which Shipley Do-Nut Flour and Supply, Co. was defrauded out of over one million dollars. The Equal Employment Opportunity Commission (EEOC) investigated these claims and decided to close its investigation without further action. Our legal team is challenging these allegations and we look forward to all of these claims being resolved by the Court in our favor, as we have already won a $22,000 judgement against them.