Workers demand reinstatement of ousted Market Basket leader
Allegiance to Arthur T. Demoulas at headquarters
TEWKSBURY — It was a scene unimaginable at most American corporations: a group of mutinous employees plotting from inside company headquarters to overthrow their newly appointed bosses.
But this is no ordinary American firm. It is the family-owned Demoulas Super Markets Inc., where two cousins have been locked in a long, bitter power struggle for control of the multibillion-dollar Market Basket grocery empire.
Now rank-and-file Market Basket employees are joining the battle. In an extraordinary public display, they have posted signs inside and outside company headquarters in support of ousted president Arthur T. Demoulas and issued a “non-negotiable” demand that he be reinstated weeks after being fired by a board of directors controlled by his cousin Arthur S. Demoulas.
“Arthur T. comes back. That’s it,” said Steve Paulenka, a 40-year Market Basket veteran who supervises facilities and operations.
The protesting employees will not say what they plan to do if their demands are not met, but offered this hint: “They can’t run this company without the team at headquarters,” said a second manager, Tom Gordon, a grocery supervisor who has worked there for 39 years.
Gordon and Paulenka were two of four well-pressed senior Demoulas employees who arranged a meeting with a Boston Globe reporter Tuesday morning inside company headquarters in Tewksbury, down the hall from the offices of the two new co-chief executives the board had just hired to replace Arthur T. The four said they had the backing of the 120 or so employees at headquarters and also claimed the support of thousands more workers at the 71 Market Basket stores.
“This isn’t work for all of us, this is a family,” Gordon added. “You take down one, you get the 25,000 behind us.”
Gordon and Paulenka were joined Tuesday morning by Jim Lacourse, a buyer for Market Basket, and Diane Belanger, an administrative assistant.
The revolt is plain to see from the road where the company’s squat office building is located. The street entrances to the parking area, for example, are flanked with large yellow signs bearing a message of support for Arthur T. Demoulas: “We got your back Mr. D. Stay Market Basket Strong!”
Inside the offices many walls have flyers and posters of Demoulas with the phrase “I Believe,” that evoke the presidential campaign slogan of Barack Obama. And last weekend employees at the Market Basket in Burlington sought to rally customers to the cause, stuffing shoppers’ bags with a pamphlet titled, “We are Market Basket and we need your help!!!”
The two new bosses tapped to succeed Arthur T. Demoulas — Felicia Thornton, a former finance chief for Albertsons supermarkets, and James F. Gooch, previously president of RadioShack Corp. — struck a conciliatory tone toward the protesting employees.
“We understand this has been a very emotional time for the organization,” Thornton and Gooch said in a statement. “We are trying to be respectful as employees work through the challenges of the transition.”
But the unusual public display of dissent from employees to their bosses left some specialists in family business issues agog.
“Wow,” said Ted Clark, executive director of Northeastern University’s Center for Family Business. “It certainly shows their loyalty.”
Though he admired their moxie, Clark likened the actions of the Demoulas employees to a game of chicken: With new bosses in control, some workers probably believe that their jobs are in jeopardy anyway, so they may as well make a bold statement.
“With all the craziness around them,” Clark said, “why not put it all out there?”
Tom Hubler, president of Hubler for Business Families, a consultancy in Minneapolis, said the employees are probably setting themselves up to get fired.
“It’s admirable and really wonderful,” Hubler said, “but they’re going to go down with the ship.”
Arthur T. Demoulas and two top Market Basket executives were removed from their posts in late June when the Demoulas family members who serve as the company’s directors tilted in favor of Arthur S. Demoulas.
The board said that Arthur T. had been insubordinate and spent money recklessly. The feud dates to the 1970s, when the family of Arthur S. accused the Arthur T. side of cheating them out of company shares. Since then the cousins have raucously fought inside the boardroom and the courtroom — and once with their fists during a break in one legal proceeding.
The soap opera-like drama among owners contrasts sharply with the high regard for the Market Basket chain among its customers. The chain is a powerhouse in the grocery business, with revenues of $4.6 billion in 2013. Forbes ranks Demoulas Supermarkets as the 127th-largest private company in the United States.
Meanwhile Gooch and Thornton said they have spent their first weeks visiting stores and meeting with employees, offering assurances that benefits such as the company profit-sharing program and bonuses will remain intact, and promising to move forward with several store openings.
“We have visited nearly every store and we will continue visiting stores reinforcing to associates our commitment to customers,” Thornton and Gooch said in their statement Tuesday.
Even so, the pair has been met with resistance and distrust — employees seem sure the plan is to sell off Market Basket stores, with the few Demoulas family members and relatives who own the company’s stock getting rich.
What happens next is unclear. The four employees who spoke publicly said they are waiting for a response from the Demoulas board.
On Tuesday, the board declined to comment on the employees’ demands, instead issuing a brief statement reiterating the perceived faults in Arthur T.
For now, Paulenka acknowledged the group took a big risk.
“We’re a crazy bunch,” Paulenka said. “If this was a poker game, we just went all in.”