Lawsuit: Shipley Do-Nuts owner 'regularly' groped employees, used racial slurs

Lawrence Shipley III and his sister, Sharon Shipley, have a chain with 240 locations in six states. Lawrence Shipley III and his sister, Sharon Shipley, have a chain with 240 locations in six states. Photo: Karen Warren, Staff Photo: Karen Warren, Staff Image 1 of / 11 Caption Close Lawsuit: Shipley Do-Nuts owner 'regularly' groped employees, used racial slurs 1 / 11 Back to Gallery

Three former Shipley Do-Nuts employees are suing the company's owner for allegedly groping them and making racist remarks, accusations that are consistent with a bevy of civil rights lawsuits filed by former workers since 2004.

The women claim that Lawrence Shipley III "regularly subjected them to unwelcome touching, other inappropriate physical behavior and unwelcome sexual comments," according to a lawsuit filed in Harris County on Friday against the donut company and its owner.

"(Shipley) hugged Elizabeth Peralta tight across her front and touched her rear and buttocks," the suit says. "He stared at her breasts and crotch areas. He spanked her rear."

The other plaintiffs allege similar action from Shipley while working at the Houston-based chain's North Main Street location. During one incident, plaintiff Esmeralda Sanchez claims Shipley did not punish a male supervisor who made sexual innuendos to her, instead saying that the way she dressed encouraged the behavior. They seek more than $1 million in damages.

The three women are also plaintiffs in a federal lawsuit filed against the company last year for failing to pay overtime, an allegation that's been lodged many times against the company in suits.

EDITORIAL: Shipley needs to shape up, or risk losing Houston's love

In an email Sunday, Lawrence Shipley said his accusers were caught "red-handed in an elaborate corruption scheme whereby they duped the Shipley companies and more than 20 franchisees out of legitimate delivery and freight services for their own financial gain."

"And if I were to become somebody I'm not and stumble over to the dark side, it wouldn't be with these low lifes," he wrote. "What a baseless, pathetic accusation. That's my comment."

An attorney for the three women said it was unclear what Shipley meant in his statement. Karla Evans Epperson said she was not aware of any legal actions against her clients that would explain Shipley's comments. Two of the women worked in housekeeping, and the other did clerical work, according to the first suit.

Epperson said she wasn't surprised by Shipley's comments, though.

"This isn't his first rodeo," she said.

History of abuse

Court records show the company has been cited for discrimination multiple times by the Equal Employment Opportunity Commission, including for requiring pregnant employees to provide documents showing they are not “high risk.”

In a 2006 suit, Shipley’s was ordered by the EEOC to give back pay to a former employee who alleged he was fired as retaliation for filing an official complaint in which he said he was “extorted, threatened with violence and repeatedly called a ‘wetback’" at the factory, court records shows.

In their most recent suit, the three women - all Hispanic - also claim that Shipley routinely made comments about their race, including using the term "wetback" and referring to one of the plaintiff's husband as her "Mexican in a white shirt" and a "bitch." Shipley also mocked their accents, and regularly asked if one plaintiff was "legal" to work in the United States, despite knowing she was, according to the suit.

The company had to pay a $1.8 million fine in 2008 for conspiring to harbor illegal aliens. Lawrence Shipley also pleaded guilty to a misdemeanor charge.

One of the women also claims that Shipley locked her inside one of the company-owned homes near the North Main Street location. “(Martha) Garcia was not able to leave while Lawrence Shipley (armed with a gun) and others patrolled the premises,” the suit says.

That claim is consistent with what other employees have said in lawsuits. In a 2006 suit filed in Texas' Southern District, 15 workers said they were “forced to endure inhumane and egregious conduct” at the company’s Houston factory, including having to pay a supervisor to request vacations that were later denied, being forced to work while injured and having a supervisor use their identification to take out loans.

They also said they were “kept like virtual prisoners” inside the North Main Street factory, which was surrounded by barbed wire fence and had gates that were often locked during work hours. The workers also claimed they were required to purchase food from one of the supervisor’s friends.

Other plaintiffs in the suit claimed they were also groped or touched while working at the factory, including with used sex toys that their manager kept and made them clean. Others were forced to clean the manager’s shoes, the suit says, and some workers were hit, punched and kicked.

Multiple employees also said they were threatened with guns by managers, one of whom was described in the suit as saying that “killing a wetback is like killing a dog” and “if you kill a wetback, no one cares.”

“Plaintiffs were called by racially derogatory names on a daily basis while working for (Shipley’s), including beings called ‘wetbacks,’ ‘stupid wetbacks,’ ‘lazy wetbacks’ and ‘damn wetbacks,’” the suit said.

Managers were also described in the suit as throwing out applications submitted by African Americans, who were referred to by the N-word.

One of the managers in that suit is also named in the most recent suit against the company.

This story has been updated with comments from Lawrence Shipley III and an attorney for his accusers. It was also updated with a correction on the amount Shipley Do-Nuts was fined for harboring illegal immigrants.

Robert Downen covers crime for the Houston Chronicle. Follow him on Twitter or email him at robert.downen@chron.com.