Lobster 207, a Trenton, Maine U.S.A.-based fishing cooperative, has received just over USD 1 million (EUR 847,631) in damages after arbitration upheld the firing of its former CEO.
Lobster 207 is a wholesale and retail business of the Maine Lobstering Union, which is itself a division of the International Association of Machinists and Aerospace Workers District 4. The organization overhauled its management last year.
An arbitrator hearing the case found that the firing of former CEO Warren Pettegrow was justified, and the arbitrator ordered him to pay Lobster 207 USD 1.021 million (EUR 865,431) in damages, according to a release from Lobster 207. The arbitrator found that Pettegrow broke his contract with Lobster 207 by competing directly with the company to benefit his own family’s lobster pound.
“The company and its membership are gratified that the arbitrator ruled in our favor in recognizing that our former CEO was properly discharged based on the facts and circumstances presented to our board,” Lobster 207 CEO Michael Yohe said in a statement. “Lobster 207 remains committed to our mission of protecting the interests of Maine’s lobstering men and women. We look forward to presenting our federal court case before a Maine jury.”
The saga began, Mount Desert Islander reported, when Lobster 207 purchased the Trenton Bridge Lobster Pound’s wholesale business, and its wholesale facility, for USD 4 million (EUR 3.3 million). Pettegrow, who ran the lobster pound, was brought on as the company’s CEO.
A contract signed stipulated as a condition of the sale that the lobster pound would not compete with Lobster 207 in the wholesale business, but that Pettegrow’s family business could continue to operate its lobster-buying station for the restaurant’s operations.
However, a lawsuit filed in 2019 claims that Pettegrow directed Lobster 207 trucks to unload lobster at the lobster pound to be sold back to Lobster 207 at a higher price, sold “phantom” lobsters that didn’t exist, and pocketed a USD 0.10 (EUR 0.08) per-pound premium that Lobster 207 decided to pay its members.
In 2020, Pettegrow filed for arbitration, claiming he was terminated without warning or cause. However, the arbitrator ruled Pettegrow breached his employment agreement.
“The arbitrator found that Warren Pettegrow had breached his employment agreement and fiduciary duties to Lobster 207 by committing acts of ‘gross misconduct’ and that, ‘from day one,’ Pettegrow had intended to assist his parents and their company, Trenton Bridge Lobster Pound, Inc., in making money in the wholesale lobster business at Lobster 207’s expense,” Lobster 207 said in a release. “The arbitrator concluded that ‘as Lobster 207’s CEO, Warren Pettegrow should have been well-aware of [Lobster 207’s] mission to save lobstermen money by avoiding the middleman as much as possible and bringing transparency to the prices received.’”
Now, Pettegrow will face a federal racketeering case, which is pending before the U.S. District Court in Bangor, Maine.
