2014 Bostonians of the Year: Market Basket employees
The grocery chain’s 25,000 workers risked their jobs to support a benevolent leader and highlighted that a company formula of low prices and good wages can succeed.
It was a riveting business story that became an even more compelling human interest story. When Arthur T. Demoulas, beloved president of the New England grocery chain called Market Basket, was fired in June, who could have anticipated what happened next? An employee walkout and customer boycott to demand Artie T.’s return, actions that crippled the business and stretched out for six weeks. Arthur T.’s cousin and rival Arthur S. Demoulas, together with his affiliated shareholders, was finally forced to sell the company to Artie T.
The 25,000 employees — many with decades of service and working alongside their husbands, mothers, sons, aunts — showed incredible devotion to a boss and remarkable stamina and determination. They knew their pay and benefits were unmatched in today’s cutthroat world of retail and gambled that if they stuck to their protests, they could emerge victorious. They caught the attention of customers, governors, US labor secretaries past and present, CEOs and business scholars from all over. When the company sale was announced in late August and employees returned to work, the joy was contagious. People who had never shopped a Market Basket before just had to visit to see what the fuss was about.
For showing such pluck and perseverance and power, we’re calling the Market Basket employees our 2014 Bostonians of the Year.
10 REASONS WHY THE MARKET BASKET PROTESTS MATTERED
1) Demonstrated that happy employees can lead to profitability
“What we see in this story,” MIT Sloan professor Deborah Ancona said at an MIT/Boston Review forum in September, “is that it’s possible to pay employees a living wage, to provide profit sharing, to treat people with dignity and respect, to give customers low prices — and still make a profit. . . . You do not need to make a choice between treating people fairly and making money.” Research appears to bear this out: Historically, stocks of publicly traded organizations on the Fortune 100 Best Companies to Work For list have outperformed the Standard & Poor’s 500 and the Russell 3000 indexes, according to Seattle-based Russell Investments.
2) Spotlighted stakeholder capitalism
Stakeholder capitalism — Asserts that a company should benefit all of its interested groups: owners, shareholders, employees, customers, and the community
Shareholder capitalism — Holds that a company exists to make money for its owners and shareholders
3) Put CEOs everywhere on notice
The support for Artie T. shown by his 25,000 employees prompted what Globe columnist Shirley Leung called “corporate soul-searching.” Business leaders spent the late summer and fall asking themselves Would my workers fight for me? Car dealer Herb Chambers shared with Leung in November: “I would like to believe they all would, but I would question that.” Meanwhile, Eliot Tatelman, president and CEO of Jordan’s Furniture, told the Globe Magazine in August: “I don’t know Arthur T., but I’d love to meet him, follow him around for a month and see how he accomplished what he did. My hat’s off to him.”
4) Affirmed the power of passionate customers
They let their wallets do the talking. Many shoppers signaled that if you anger the Market Basket employees they interact with every week, they will boycott your stores. As proof, some taped their receipts from competing grocery stores on Market Basket doors.
5) Illustrated that a nonunion workforce can band together
The protests at the Tewksbury-based Market Basket happened not far from the site of the Bread and Roses strike in Lawrence 102 years ago that helped define the labor movement. But Market Basket employees are not unionized, and both managers and rank-and-file workers joined in on the actions. “This company never needed, or ever will need, a union,” operations supervisor Joe Schmidt told WBUR. “We’re far stronger than that.”
6) Underscored the value of middle managers
Corporate titans get the glossy magazine profiles and the multimillion-dollar paychecks, but do they make sure the shellfish supplier is at the warehouse dock at 4 a.m.? Do they actually know how to run their companies? Market Basket emphatically showed that they don’t. The executives brought in to replace Artie T., James Gooch and Felicia Thornton, issued several ultimatums to the workforce during the walkout that were ignored. Market Basket’s operations team simply refused to take their orders. Instead, they worked the relationships they’d built up over decades with employees and vendors to shut down the supply chain — and rev it back up when Artie T. was restored. Office drones everywhere rejoiced in the sight of rebel managers plotting their resistance from the inside — Market Basket’s own offices. “They can’t run this company without the team at headquarters,” a prescient Tom Gordon told the Globe at the beginning of the rebellion. Gordon, a grocery supervisor with 39 years at Market Basket, was fired for his role in fomenting the protests in July. He’s still there.
7) Celebrated the virtuous leader
“[Market Basket employees] launched their protest because they wanted to work for a guy like Arthur T. — someone who didn’t treat them just like they were another cost of doing business, but rather as a valuable asset, worthy of dignity. He understands that doing right by your employees is a great way to generate loyalty and productivity, adding value for customers and increasing your profit margins. He knows that an economy that works for everyone is an economy where prosperity is shared.” — US Secretary of Labor Thomas Perez at a National Press Club event in October
8) Showed that one demand trumps many
“Arthur T. comes back. That’s it.” This was how longtime facilities and operations supervisor Steve Paulenka explained employees’ wishes to the Globe in July. They didn’t ask for more money, better benefits, or any other item frequently at the heart of labor strife. They wanted one thing — the return of their boss. It appeared a reasonable, attainable request.
9) Proved social media’s force as a protest tool
Bucking the practice of corporations worldwide, Market Basket doesn’t have its own website or social-media presence. Protesting employees and fans of the stores proved far more Web savvy, illustrating how Facebook, Twitter, and blogs can spread your message and win converts for little or no money. “Social media played a prominent role as a rallying tool,” notes a report from the Saugus marketing agency C-4 Analytics. “Failing to have their own social-media presence to tell their side of the story clearly allowed negative employee and consumer sentiment to flourish, unfettered.” Unofficial Facebook pages — such as Save Market Basket, with about 90,000 “likes” — were used to organize rallies and boycotts, ridicule board members and shareholders, and collect money for out-of-work employees. SocialSphere, a Cambridge research firm, says there were 188,216 tweets about the Market Basket crisis from June 23 (the day Artie T. was ousted) to August 28 (one day after he reached a deal to buy the company), and 807,799,276 total potential impressions.
10) Produced the right outcome
Too often in labor battles, the opposing sides both give in so much that the result is a watered-down compromise that leaves nobody truly satisfied and everyone feeling as if they gave up too much. In the case of Market Basket, the workers wanted Artie T., and the workers got Artie T. Any other outcome would have tasted like sour milk.
Globe business reporter Jack Newsham conducted the employee interviews. Freelance writer Stephanie Vallejo contributed research. Globe photographer Dina Rudick took the images of the Market Basket employees. Newsroom developer Russell Goldenberg built the graphic. Send comments to firstname.lastname@example.org.