Tuesday, April 16, 2024

Edward Teach files suit against former employee, now Flying Machine manager, for product tampering

Thursday, the brewery initiated legal action against a former employee for tampering with its products and defaming ETB and its owner, Gary Sholar. (Port City Daily/Peter Castagno)

NEW HANOVER COUNTY — Controversy initiated by a viral Facebook post alleging misconduct by the owner of Edward Teach Brewery has escalated. Thursday, the brewery took legal action against a former employee for tampering with its products and defaming ETB and its owner, Gary Sholar.

ETB filed a complaint against Erik Peterson — once the head brewer of Edward Teach from 2017 to 2022 and now the director of operations for Flying Machine Brewing Company. Peterson has been working at Flying Machine since February 2022.

The lawsuit alleges Peterson stuck QR codes to cans of ETB products stocked at the 3501 Oleander Drive Harris Teeter around 4:30 p.m. on Jan. 2 and at the 2800 S. College Rd. location around 4:45 p.m. The stickers directed users to a Facebook page, which the suit says Peterson authored. It claimed “The Edward Teach owner (Gary Sholar) is a terrible person” and provided a hyperlink to a Facebook post that went viral throughout the Wilmington community.

Penned by local musician Madonna Nash, the post, published Dec. 29, 2023, accuses Sholar of engaging in inappropriate and threatening behavior during her daughter’s Nov. 16 performance at the brewery. ETB has since described the post as false and defamatory.

The lawsuit contained quotes from the post, including the allegation that Sholar was “visibly drunk off his ass, erratic, aggressive and terrorizing”; “touched inappropriately, disrespected, and terrorized a 20 year woman who was hired by and working for his establishment, making for a toxic and hostile work environment”; “throwing chairs hitting his own patrons”; and “drinking BEHIND the bar! Totally illegal!”

Nash wrote in a subsequent Facebook post that two victims were at the heart of the situation, the second was a friend of her daughter’s, also at Edward Teach the night of the show. Nash claimed Sholar “charged at her friend.”

Sholar has countered the incident in a StarNews interview, stating he was not “appreciably impaired,” though admitted to drinking that day. ETB responded to its own account of events on Facebook, stating Sholar did not throw a chair, but put it between a patron he was arguing with and himself to create distance, but it fell backward and did not hit anyone. He conceded to exchanging expletives and harsh language with the performer’s friend during the incident, but argues she initiated the altercation and disputes characterizations of his behavior as threatening.

Nash and her daughter have not responded to PCD’s multiple requests for an interview. However, on Jan. 5, Nash wrote: “Although we cannot comment at this time due to it being an ongoing investigation, we would like to thank everyone in our community for their outpouring of support.”

PCD has checked in with Lt. Greg Willett from the Wilmington Police Department multiple times throughout the last few weeks about an investigation being conducted. As of Thursday, none had been initiated, he said.

As well, Alcohol Law Enforcement spokesperson Antwan Happoldt told PCD the ALE is looking into the situation but has not opened a formal investigation into Sholar or Edward Teach. According to the Alcohol Control Beverage Commission, “no permittee or his agents or employees shall be or become intoxicated on the licensed premises.”

After Nash’s post gained more than 1,000 shares and 956 comments, businesses began boycotting the brewery’s products, including Blind Elephant, Barbary Coast, Jimmy’s, Satellite, Rumcow, among at least a dozen more. 

On or around Jan. 2, 2024, the QR codes were stuck on ETB products at the two area Harris Teeter stores. The brewery subpoenaed the chain grocery store for video footage to learn who was behind the vandalism. 

Peterson acted without justification, according to the lawsuit, which alleges his sole intention was to hurt Edward Teach’s business. These actions cost ETB more than $25,000 in damages, thus claiming Peterson exercised negligence by disseminating information from an individual who did not witness the Nov. 16 incident.

The lawsuit states Peterson, nor Nash were at the bar the night of the confrontation.

“As ETB’s former Head Brewer, and as the current Director of Operations for Flying Machine Brewing, Peterson knew that a significant portion of ETB revenue comes from the sale of its products in grocery stores,” the suit adds. “Moreover, Peterson knew that potential ETB customers would be induced not to purchase ETB products after reading the defamatory Facebook post.”

The suit states the text above the barcode instructed customers to “SCAN ME”; it claims the labels were intended to appear as if they were part of ETB’s product packaging. ETB argues Peterson’s objective was to disrupt their business as “close to the point of sale as possible.”

Attorney Thomas Varnum of Brooks Pierce told PCD he believes Peterson’s actions are not attributable to Flying Machine Brewing Company. He said Tuesday that tampering is in violation of federal statute 18 USC section 1365 F1, which refers to the crime of intentionally placing or inserting writing on a consumer product before its sale. Peterson has not been charged with this crime, however, as Sholar’s case is in civil court.

Peterson declined to comment on the lawsuit. PCD also reached out to FMBC owner Grant Steadman to find out if Peterson is still employed with the brewery. Flying Machine responded:

“We have an intimate understanding of operating in a competitive market and know how important it is to have all retail products respected. According to the lawsuit, the named employee worked as Head Brewer for Edward Teach Brewery from August 2017 to February 2022. As correctly stated in the lawsuit, any actions that may have been made by this person would have been on his own volition and ‘not in any official capacity on behalf of Flying Machine Brewing.’  Furthermore, this person is not in a department that has any responsibility for the sale of product to any retail establishments.  We in no way condone the actions represented in the lawsuit for any reason and we believe such actions would be a violation of our company policy. Anything related to this matter will be handled internally and we will have no further comment.”

The lawsuit requests the court hold a trial by jury to determine the extent of damages and appropriate compensation. This includes amounts Peterson owes ETB, plus awards of compensatory, punitive, and treble damages, and attorney fees.

Though nothing has been officially filed against Nash, the brewery is considering pursuing legal action in response, according to Varnum. He said they’ve attempted to reach out to Nash but have not made headway.

“At this time, nothing has been commenced but nothing is off the table,” he said. 

ETB has an affidavit provided by one witness, Christine Sprow. There were roughly 15 to 20 witnesses of the event, according to Nash and ETB’s posts, but many have not responded to PCD’s inquiries. Sprow stated she was a witness of the Nov. 16 event and Nash’s Facebook post inaccurately portrayed the incident. The post was “grossly exaggerated,” Sprow stated in the affidavit, and added she did not see Sholar make contact with the musician.

Varnum said the brewery is reacting to the situation as it unfolds and there is no set timeline to initiate further litigation.


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