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The Boston Globe

Business

Market Basket vows to replace dissident workers

Market Basket moved Wednesday to break up the walkout by employees and stem millions of dollars in daily losses at the fractured grocery chain, warning that the company would begin replacing workers unless they returned to their jobs next week.

The threat to remove uncooperative employees ratcheted up the pressure to reach a broader deal between warring factions of the Demoulas family on the potential sale of the company. Wednesday marked the third day of negotiations on an offer by ousted president Arthur T. Demoulas to buy the shares of rival family members.

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The company’s cochief executives who replaced Arthur T. Demoulas said in a statement that they “need to have associates working to support stores, customers and vendors. We need associates to return to work on Monday, Aug. 4.”

The executives said Market Basket would begin hosting a job fair Monday to find new store directors, accountants, buyers, and other associates to help run the 71-store chain. Those job categories account for more than 600 positions at the company, current and former managers said, though it was unclear Wednesday night how many new employees the company needs.

The announcement drew an emotional reaction from employees who have refused to work as a demonstration of their solidarity with Arthur T. Demoulas. He was fired by his cousin, Arthur S. Demoulas, in late June, touching off a war for control of the company and a series of loud employee rallies.

Some employees said Wednesday that they will not budge in the face of possible termination.

“Everybody knows how all the employees feel, that we’re going back to work when Arthur T. Demoulas is reinstated as president of the company,” said Mike Maguire, director of produce operations at Market Basket. “We’re a pretty rigid bunch here at Market Basket. We’ve lived through plenty of adversity. Our demands are few.”

Others said they have continued to go to work every day, but the company’s managers appeared to be targeting their jobs anyway.

“We’re still cleaning the stores. We’re painting. We’re doing all that we can do,” said Brian McCullough, an assistant director of the Woburn store. He said the company would not accomplish anything by replacing workers because many customers have vowed not to shop at Market Basket until Arthur T. returns.

“Threaten us all you want, but customers aren’t going to come back to the building,” he said. “They are pulling up and telling us they aren’t coming back until Artie T. comes back.”

A company spokesman reiterated that Market Basket will not fire any employees willing to work.

The employee rallies on behalf of Arthur T. constitute an extraordinary show of support for a multimillionaire chief executive in an era when most corporate workers barely know their CEOs and would be loath to risk their jobs on behalf of top executives. Market Basket employees do not belong to a labor union.

The protests and customer boycott have left stores with hardly any fresh food or shoppers. Negotiations to resolve the dispute are not proceeding fast enough to prevent massive financial losses.

Arthur T. declined to comment Wednesday on the threat facing his former employees, citing a strict confidentiality agreement surrounding the negotiation of the potential sale of the company.

Arthur T. has offered to buy the shares of Arthur S. and other relatives, who own 50.5 percent of the company. The company’s board, whose majority favors Arthur S., has said it was still evaluating Arthur T.’s bid and offers from other suitors. People familiar with the talks said discussions Wednesday continued to focus on Arthur T.’s offer.

The anger surrounding the standoff — extending from employees to both sides of the Demoulas family — is threatening to unravel a company worth billions of dollars that provides more than 25,000 jobs in Massachusetts, Maine, and New Hampshire.

Business specialists said the effort to replace protesting employees could further inflame emotions during the already tense negotiation, especially given the volatility of family members who have been fighting about Market Basket for 30 years.

“Management is playing hardball,” said Gary Chaison, a professor of industrial relations at Clark University. “I think the way out of this dispute . . . is to show conciliatory gestures. They’re doing it wrong. The best way to do that is to reinstate the fired workers and tell the striking workers that they’re hurting their own job prospects.”

Other observers said the move appeared to reflect a practical necessity for a business that is losing millions of dollars because of a lack of workers to carry out essential tasks. “The cochief executives are being very tolerant of the situation, but they understand that they have a business and they have to run it,” said Ted Clark, director of the Center for Family Business at Northeastern University. “This is one of the laws of physics in business — every action has an equal and opposite reaction.”

John Garon, a manager at the Burlington store, said 68 of Market Basket’s 71 store managers have signed a pledge that they won’t work for anyone but Arthur T. Demoulas. The three managers who didn’t sign, he said, are on vacation.

Though he’s attended rallies and protests in support of Arthur T. Demoulas, Garon said he has otherwise clocked in for his shifts. “We’ve been at work all week,” he said. “There are no customers in the stores. They’re boycotting.”

Casey Ross can be reached at cross@globe.com. Taryn Luna can be reached at taryn.luna@globe.com. Follow her on Twitter @TarynLuna. Jack Newsham can be reached at jack.newsham@globe.com. Follow him on Twitter @TheNewsHam. Callum Borchers and Erin Ailworth of the Globe staff contributed to this report.
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