Suit Claims Former Norwegian CEO Had Improper Relations with Employees

By ,   March 16, 2017 ,   Cruise Industry

Two former NCL (Norwegian Cruise Line) Holdings CEOs are duking it out Dr.Phil style in a lawsuit that claims one was fired because of improper relationships with employees.

When former CEO Kevin Sheehan abruptly resigned in January 2015 after 7 years with the cruise line, the reason for his departure wasn't publicly released. But according to a lawsuit filed by his predecessor, Colin Veitch, in Miami-Dade County circuit court in November, the Miami-based cruise company and many in the industry knew the circumstances of his departure.

According to the suit, Norwegian and its affiliated companies have “long been aware” of Sheehan’s “improper behavior and relationships” with employees aboard its cruise ships. The allegations about Sheehan’s personal conduct appear in a section of lawsuit in which Veitch says Sheehan libeled him in an email to a trade publication.

The primary charge in the suit relates to Veitch’s severance package. Sheehan purposely withheld payments from Veitch, the suit alleges, resulting in millions of dollars in damages to Veitch.

But Veitch also claims libel, saying that Sheehan sent a “vindictive, false and defamatory” email to Travel Weekly after the trade publication published a glowing article about Veitch in December 2014. Travel Weekly eventually published Sheehan’s email and took down the article on Veitch’s tenure at Norwegian and his role in several of the line’s most innovative concepts — some that proved successful and others that were not.

Veitch, who retired after leaving Norwegian, claims in the suit that the email was an attempt by Sheehan and Norwegian to destroy his reputation and salvage Sheehan’s own.

Why? Because he was jealous, Veitch claims in the suit, and because Sheehan had a tainted reputation of his own.

Veitch claims Sheehan abused his power at the company, engaging in improper relationships with “numerous crew members, shoreside staff, staff of affiliated companies and other travel industry-related personnel.” That included moving employees between ships to coincide with executive visits and influencing promotions based on the individual’s relationship with Sheehan.

According to the legal complaint, a month-long investigation by NCLH from December 2014 to January 2015 prompted Sheehan’s departure, after the investigation confirmed a pattern of “personal and professional misconduct and recklessness, stunning in its scope and hubris, corrosive and detrimental in its impact on the company.”

Though the board of the company was well aware of Sheehan’s indiscretions, the suit claims, the company didn’t fire him until December 2014. Frank Del Rio, CEO of Prestige Cruises International, which NCL acquired, took over as CEO after Sheehan.

Norwegian, which has a policy of not commenting on matters of litigation, made an exception for this case.

“In light of the outrageous and false statements made by Mr. Veitch, [NCL] will respond on a very limited basis to confirm that it will be seeking sanctions against Mr. Veitch and his counsel for the improper allegations contained in the lawsuit,” said Vanessa Picariello, a spokeswoman for the cruise company.

Since the suit was filed, Norwegian’s attorneys have sought to strike from the record what they characterize as “immaterial, impertinent and scandalous” allegations against Sheehan from Veitch’s complaint. The cruise company’s attorneys are also seeking to depose Vetich to uncover how he knew about the allegations and what material proof he has for them, according to court documents.

In a motion filed last week, Veitch’s attorneys said he has no objections to the deposition, because

“Mr. Sheehan’s sexual misbehavior was not confidential at all, but rather was widely known: ‘Practically everyone inside NCL, and most people outside NCL in the broader cruise industry, were aware for many years of Mr. Sheehan’s indiscretions, and the board’s toleration of same.’”

Last year, Veitch settled a lawsuit against The Virgin Group for $300 million after Veitch alleged that Virgin stole his plan to build two “ultra ships.”