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In a shocking move, Market Basket CEO Arthur T. Demoulas has been placed on leave amidst allegations of planning a work stoppage as ‘improper retaliation’ against the board, sparking controversy over market practices.
Market Basket, a beloved New England grocery chain with over 90 stores, has once again found itself embroiled in a family feud that threatens to disrupt its operations. The company’s board of directors has placed CEO Arthur T. Demoulas on leave, citing allegations that he was planning a work stoppage among employees as part of an ‘improper retaliation‘ against the board.
Market Basket’s roots date back to 1917 when Greek immigrant Athanasios ‘Arthur’ Demoulas opened a store in Lowell, Massachusetts. The business has grown into a regional supermarket chain operating in New Hampshire and Maine. However, as it has expanded, family squabbles have persisted.
Two of Athanasios Demoulas’s sons grew Market Basket into a regional supermarket chain. Their sons’ feud began decades ago, with an epic legal battle in the 1990s featuring a courtroom fistfight. The current dispute revolves around CEO Arthur T. Demoulas and his alleged plan to stage a work stoppage.
The executive committee of Market Basket’s board claimed that Demoulas has been planning a work stoppage to disrupt the business, an act they believe is ‘improper retaliation‘ against the board’s requirement for him to cooperate with basic corporate oversight. Additionally, the board alleged that Demoulas resisted an appropriate succession plan for Market Basket, asserting his unilateral right to appoint his children without the board’s input.
Demoulas’s representative, Justine Griffin, called the board’s claim of an investigation ‘a farcical cover for a hostile takeover.’ She stated that Demoulas’s three sisters and their appointed board members were responsible for placing him on leave. Griffin also highlighted that this move comes at a time when the company is thriving financially.
A similar saga unfolded nearly two decades ago, when Arthur S. Demoulas led a push to oust his cousin, Arthur T. Demoulas, as CEO. The feud between the two sides of the family began to spill into an outright struggle for control, with many Market Basket employees walking off the job in support of their preferred leader. After nearly two months, Demoulas succeeded in regaining the CEO post, and his siblings offered a buyout worth over $1.5 billion to gain majority control of the company.
The board announced that placing Demoulas on leave would not affect the company’s ownership structure or workers’ pay and benefits, including their profit-sharing plan.
