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August 25, 2021

Arbitrator upholds firing of Lobster 207 co-op CEO, clearing way for racketeering lawsuit

stacks of traps File photo / Laurie Schreiber A lobster cooperative prevailed this week in a hearing regarding its CEO’s dismissal last year.

The former CEO of Lobster 207, a fishing cooperative owned by the Maine Lobstering Union, on Monday lost in an arbitration proceeding over his firing in 2020.

The decision against Warren B. Pettegrow of Trenton upholds his dismissal and is expected to allow a federal racketeering lawsuit, pending before the U.S. District Court in Bangor, to continue toward trial, according to a news release from the co-op.

Named as defendants in the suit brought by Lobster 207 are Pettegrow, his company, Poseidon Charters Inc., Anthony D. and Josette G. Pettegrow of Trenton, and their company Trenton Bridge Lobster Pound Inc.

Lobster 207 filed the suit in December 2019. Pettegrow subsequently requested that the matter go before an arbitrator rather than a jury. 

After eight days of hearing involving testimony by 10 witnesses, the arbitrator issued an award in favor of Lobster 207 and against Pettegrow in the amount of $1.02 million.

The arbitrator found that Pettegrow had breached his employment agreement and fiduciary duties to Lobster 207 by committing acts of “gross misconduct” and that he intended to make money in the wholesale lobster business for Trenton Bridge Lobster Pound Inc. at Lobster 207’s expense, according to the release.

The arbitrator found 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,” the release continued.

Speaking on behalf of Lobster 207, its CEO, Michael Yohe, said, “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 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 suit claims the defendants systematically embezzled funds, submitted fraudulent invoices, up-charged for lobster products and competed with the wholesale lobster business that they had sold to Lobster 207. 

The co-op said those actions, from 2017 to 2019, violated the federal Racketeer Influenced and Corrupt Organizations law and also constituted fraud, breach of contract and other charges.

In 2017, the Maine Lobstering Union purchased the wholesale operations of the Trenton Bridge Lobster Pound from Anthony and Josette Pettegrow. As part of the transaction, Warren Pettegrow was named as CEO of Lobster 207 and the Pettegrows agreed they would withdraw from the wholesale business and not compete with Lobster 207’s operations.

The union got its start in 2013 when lobstermen, concerned about falling catch prices, approached the International Association of Machinists and Aerospace Workers District 4. With District 4’s help, hundreds of lobstermen along the coast formed the Maine Lobstering Union Local 207.

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