Chuck Peters rolls his wheelchair through the break-of-dawn bustle of his iconic East San Jose bakery. White-aproned clerks sort fresh donuts in the display case. Flour-caked bakers sidestep each other from counter to oven. They all ignore Peters, the 73-year-old boss with the gravely voice and murky blue eyes.

Though frail and stroke-slackened, Peters’ temper is legend. For now, he cools his usual guff and parks alongside the register of Peters’ Bakery, whispering distance from the woman he’s tried twice—and failed—to fire. But he’d rather not talk about Marcela Ramirez.

“That’s nobody’s business,” Peters says, his voice taut.

To his left, Ramirez, in a pink polo and sensible updo, swaps how-do-you-dos with her earlybird regulars. Peters pretends she’s not there. She returns the favor, dancing around his imagined force field.

Ramirez can’t quit. As a mother of two, she can’t afford to leave. And Peters certainly can’t fire her. His past attempts have mired the shop—his family’s legacy—in federal litigation amid charges of racism.

Now, as part of the public record, it’s anybody’s business. Peters’ father founded the bakery in 1936 and built it into an East Side institution. Its burnt almond cake is considered a local specialty requested for birthdays, baptisms, graduations, wakes and quinceañeras.

In August of 2011, Peters decided he’d had enough of Ramirez, an employee since 2001. It's unclear how the conflict arose, as both parties declined to elaborate. Records, however, say that at various times, Peters asked her to drop the accent and to lighten up about the term “wetback.” According to depositions, he also said to Ramirez, “I never trusted your kind of people.”

Peters vowed to report her mom to federal immigration officials if she posted anything negative on social media, records say. He also allegedly threatened to destroy her in court if she sued him, adding that he didn’t think she could afford to anyway because she probably sent all her money back to Mexico.

At her union’s behest, Ramirez filed a discrimination complaint the week she lost her job through the Equal Employment Opportunity Commission (EEOC), which enforces federal discrimination laws. Peters shot back, accusing her of defamation for daring to report him and calling him Portuguese. Peters struggled to defend his actions.

“My family owned several acres of fruit orchards and every year we had ‘wetbacks’ work for us, you know, illegals, and there was no discrimination,” the EEOC claims he told their investigator, Martin Olsen.

A judge unsurprisingly tossed Peters’ claim, which gave Ramirez grounds to file a second EEOC charge for retaliation.

In summer 2012, a year after her firing, Ramirez’ union—the United Food and Commercial Workers Local 5—won her job back through arbitration. But four and a half months passed before Peters paid her lost wages, pension contributions and benefits. He also distributed copies of Ramirez’ complaints to the other employees, which the EEOC called an effort to intimidate her co-workers. Weeks later, Peters tried to write her up for counting change in the employee tip jar—a routine task that all the clerks take turns doing.

The EEOC sued Peters’ Bakery on her behalf in fall 2013. The lawsuit seeks punitive damages as well as compensation for Ramirez’s medical costs from the stress of losing her job. Though her husband works, Ramirez depends on her salary to pay for two mortgages and catholic school tuition for her two young children.

“Marcela has been a very brave person,” said Tony Alexander, a UFCW Local 5 union rep. “She’s been a trooper through all this. The other people in the bakery have been strong, too. They see Peters every other day. They put up with him. Then he rolls out and they get to go back to their business.”

Peters’ father, Tony Peters, was born in 1907 to a poor Portuguese family in San Jose. Throughout grade school, Tony Peters struggled to learn English. Chuck Peters told San Jose Inside that his father’s alfalfa allergy kept him from following the other men in his family into the dairy business. So he took up work at an uncle’s San Francisco bakery instead, where he learned the trade well enough to start his own operation.

The San Jose bakery first opened on Delmas Avenue and San Carlos Street. A decade later, it moved to Alum Rock Avenue, where it stands today, tucked into an aging row of shops.

Employees unionized early on, while Tony Peters’ children carried on the family business by managing the cash-only bakeshop. The younger Peters had other plans. After earning a bachelor’s in animal husbandry from Cal Poly, San Luis Obispo, he became a cattle driver.

“I wanted to be outdoors,” he says. “I wanted to work with the animals.”

A stroke waylaid his plans to retire as a cattleman. About eight years ago, his brother, David Peters, offered to divvy up ownership of the bakery, giving Chuck Peters something to do and his brother a chance to semi-retire. Managing people, however, has proven more challenging than ranging a herd of 500 cows and as many calves.

This summer, on the last day of June, he summoned Ramirez to his back-office lair to let her know she’d be out of a job by the end of the week. Ramirez asked why.

“I don’t have to give you a fucking reason,” he replied, according to court records. “I don’t like you. You’re done.”

Ramirez walked away visibly shaken. Her supervisor, Sabrena Righetti, marched with her back to the office to demand an explanation for the firing.

“My sanity, before I fucking lose it and kill someone,” they recall Peters saying—twice—which brought both women to tears. Ramirez called her union, which dispatched Alexander.

“I’m firing her for my mental health reasons,” he told the union rep, who took notes. “For my sanity. I’m gonna lose my fucking sanity. I’m gonna kill someone.”

Peters insisted that Ramirez has cost him a fortune, that she’s driving him mad, that she’s why he’s on meds. Plus, he said, she lied about him being Portuguese when he’s really an American of Portuguese descent.

But without progressive discipline, Peters couldn’t just fire Ramirez, let alone in the middle of a lawsuit. A federal judge reinstated her job last month, at least for the duration of the suit.

The bakery’s attorney, Victoria Booke, disputes the allegations of “racial animus.”

“A third of his workforce is Hispanic,” she said. “We do totally agree that two parties do not care for each other. The best outcome, I think, is for them to part ways. Because it can’t be good for her working for someone she doesn’t like either.”

U.S. District Court Judge Beth Labson Freeman said it’s not that simple, that "few people have the luxury to simply leave a job when there is conflict with the boss." For a working-class clerk with no formal education, leaving would cause undue hardship on her and her family. Besides, the EEOC added, at this point the case has been taken up by a federal agency as a public interest lawsuit.

“It’s bigger than Marcela now,” said Alexander, her union rep. “She’s not the one who filed this, the EEOC did.”

Because people depend on the business for their livelihood, Alexander cautioned against boycotting the business on account of one person. Like its customers, Peters’ Bakery employees have a strong sense of loyalty to the place. Some of the clerks and bakers have worked there longer than Chuck Peters.

“The people who work there, at the counter and in the kitchen, they’re the face of the bakery,” Alexander said. “Not crazy Chuck.”

Jennifer Wadsworth is the news editor for San Jose Inside and Metro Silicon Valley. Email tips to [email protected]. Follow her on Twitter at @jennwadsworth. Or, click here to sign up for text updates about what she’s working on.