Workers Going Up And Down The Aisle Prove Most Valuable Asset At Market Basket

In what is being seen as a victory for workers — and sympathetic shoppers — clerks soon will be restocking the bare shelves of the 71 supermarkets owned and operated by the Market Basket chain in New Hampshire, Massachusetts and Maine. A deal for a sale was struck late yesterday to settle a dispute among warring factions of the extended family that owns the company and to reinstate the deposed CEO — Arthur T. Demoulas — whose side held a 49.5% stake.

Arthur S. Demoulas, his cousin, and his allies will receive $1.6 billion for their 50.5% stake in the company, which dates back to a single store in Lowell, Mass., founded by brothers Athanasios ("Arthur") and Efrosini Demoulas in 1916.

“This show of group solidarity achieved what the employees and customers asked for,” Christopher Mackin, a lecturer at Rutgers School of Management and Labor Relations tells the New York Times’ Katharine Q. Seelye and Michael J. de la Merced. “This is unheard-of in corporate America. It’s like 1776 — we get to pick who governs us.”

“Effective immediately, Arthur T. Demoulas is returning to Market Basket with day-to-day operational authority of the company,” the chain said in a statement posted by The Sun Chronicle of Attleboro [Mass.) “He and his management team will return to Market Basket during the interim period while the transaction to purchase the Company is completed. The current co-CEOs will remain in place pending the closing, which is expected to occur in the next several months.”

The long-running internecine battle — the cousins are grandchildren of the founders — came to a head in June when Arthur T. was fired by the board of directors and replaced by co-CEOs, Felicia Thornton and James Gooch. 

“The firing of Demoulas — along with VP Joe Rockwell and Bill Marsden, Market Basket’s director of operations — is an apparent decisive blow in a longstanding battle” between Arthur T. and  Arthur S., Jon Springer reported in Supermarket News at the time. “A faction led by Arthur S. Demoulas regained control of the board a year ago and immediately set an agenda at odds with that of his cousin including oversight of the company’s profit-sharing, real estate and bonus programs.”

But workers, who credit Arthur T. “for treating them like family, keeping prices low and leading the company's success,” revolted, reports the AP. “The uproar over Arthur T.’s firing prompted massive protest rallies outside the company's Tewksbury headquarters. After the company fired eight supervisors who helped organize the revolt, public support for the workers intensified,” including a boycott petition signed by thousands of shoppers as well as 160 politicians. 

“The organized effort to ‘shut this company down,’ as workers put it, began a few weeks later when office and warehouse employees walked off the job, stunting deliveries to stores and throwing business operations into chaos,” reports Adam Vaccaro on the Boston Globe’s Boston.com. 

The effort included a “Save Market Basket” Facebook page with more than 90,000 “likes” as of this morning. Shoppers were exultant over the deal, with more than 13,000 expressing their pleasure at the pending agreement. 

“See you at 7 AM tomorrow to buy anything on the shelves!!!!,” wrote one. “I don't even have a dog but I'll buy dog food if needed!!”

The movement also had a popular logo, described by the Boston Globe’s Jack Newsham as “a goofy-looking giraffe in a circle with the words ‘Market Basket Strong’ that’s become a symbol of the boycott movement and of the employee’s sticking their necks out for their former boss.”

Designed by Scott Manning, part-time graphic artist from Manchester, N.H., it was “arguably the centerpiece of an entire cottage industry that has churned out countless t-shirts, vinyl decals, and tchotchkes to sell to impassioned customers and employees of Market Basket,” Newsham writes.

The drama demonstrated that “the employees are the most valuable asset in this business,” Thomas A. Kochan, a professor of work and employment research at the Sloan School of Management at the Massachusetts Institute of Technology, tells the Times’ Seelye and de la Merced. “Market Basket has done more to educate us on how to manage a business than any business case study that’s been written to date,” he said.

“It’s been a long road, and over the last five weeks, there have been many times where I thought, ‘Maybe we’re stupid, maybe we’re naive, maybe we can’t win,’” Tom Trainor, one of the organizers of the worker protest movement who was fired in July, told Boston.com’s Vaccaro last night. “I just wanted to go back to selling groceries and taking care of customers.”

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