Tag: Market Basket

The trial dealing with the leadership dispute at New England supermarket chain Market Basket got underway today at a Delaware courthouse.

Fired CEO Arthur T. Demoulas is fighting to get his old job back, while the company’s board of directors is looking to have the court uphold their decision to terminate his job earlier this year.

Boston Globe business reporter Jon Chesto is in Delaware to cover the trial. He joined NBC10 Boston’s podcast, Food Feud: Market Basket, to give us a recap of what happened in court on Tuesday.

Chesto said that most of the day Tuesday was spent hearing testimony from board chair, Jay Hachigian.

“Jay says that the sisters have been sort of kept in the dark on the corporate finances for awhile,” Chesto said. “From Arthur’s perspective, his lawyer said, well, you know, his CFO has been sharing information at your request.“

Following testimony and cross-examination of Hachigian, a video deposition of Caren Demoulas was played, which will resume when court begins Wednesday morning.

“Basically she was saying how much she… loved her brother and it was sad to see the family fraying in this way,” Chesto said.

Arthur T. Demoulas is expected to testify in the trial as soon as Wednesday. The proceedings are not expected to go past Thursday.

You can find Chesto’s full reporting on day 1 of the trial here on The Boston Globe.

Food Feud: Market Basket is available wherever you get podcasts.

It’s been over two weeks since Arthur T. Demoulas was fired as CEO of New England institution Market Basket, an action by the company’s board of directors that ended a nearly two decade-long stint as chief executive that was unique in many ways.

While the Market Basket board has alleged that Demoulas acted as a “dictator” and was uncooperative when it came to budgets and supposed plans to appoint his children as the next generation to lead the grocery store, workers and customers have generally viewed Demoulas — nicknamed Artie T. — in a positive light.

Will that change in light of Demoulas’ two firings during his tenure?

“His firing does raise a lot of questions about what this means to his legacy as CEO,” Boston Business Journal reporter Grant Welker said.

While many aspects of Demoulas’ legacy “don’t seem likely to change” in light of the two oustings, Welker wonders if business analysts will look upon his time as CEO differently.

Food Feud: Market Basket is available wherever you listen to podcasts.

“Today, Arthur T.’s legacy, in a broader sense, is more complicated,” Welker said. “He’s been fired twice now for an alleged failure to get along with [the] board. There are other factors to consider in that, including the strained Demoulas family dynamics. But we do have two different boards that elected to remove him, even knowing of his popularity and success.“

So, what does that mean for the “business school application” of the Demoulas legacy?

“The bottom line to the story is that 11 years after he was fired the first time, it’s similar allegations that did him in,” Welker said. “It could be seen that he didn’t learn his lesson from the first time, or that he didn’t rein in his desire to be more unilateral in his decision-making.”

Still though, Welker said that his reputation is likely to remain a positive one among community members and workers. Demoulas has been known over the years to take the time to talk with associates at stores all over the region, remembering even small details of their lives. It’s one of the things that contributed to his popularity among store workers.

Demoulas and his family have also been known to lead charitable efforts, particularly in the Lowell area — the city where his family started the supermarket that would evolve into Market Basket over a century ago. Welker said that the Demoulas family often gives under the radar to local colleges, schools, youth groups, hospitals and churches.

Congresswoman Lori Trahan joins our show to discuss her feelings on Arthur T. Demoulas’ firing this week. Trahan is a Lowell native — something she has in common with Market Basket — and wrote an open letter to the company’s board of directors this week, urging them “to remember what this company means to the people who love it. To remember the generations of employees and customers who stood by Artie in 2014 — and who still stand by him today.”

“Throughout his tenure, he always prioritized employees through bonuses and profit sharing for shoppers at some of the lowest prices around,” Welker said. “He had always made it clear that he thought much of Market Basket’s profits are not his family’s to keep. But something that , at least in part, be returned to where it came from — that is, workers and customers.”

Despite concern from lawmakers and community members, Market Basket says it will keep the same hometown culture even after Demoulas has departed.

The interim CEO, Donald Mulligan, has been with the company for over 40 years. He was hired by Arthur T.’s father in the 1980s, and even walked out in support of Demoulas when he was first fired in 2014.

He was promoted to CFO in 1999 and has worked in that job since.

A search for a new, permanent CEO is presumable ongoing. It’s unclear if Mulligan is being considered for the position on a permanent basis. He is 70 years old.

Demoulas, as well executives who remained loyal to him, have denied the claims of the board of directors — calling the investigation a coverup for a “hostile takeover” of the supermarket company.

You can listen to our whole conversation with Welker on our podcast, Food Feud: Market Basket, available wherever you stream podcasts.

Beloved Market Basket CEO Arthur T. Demoulas is out after a unanimous vote by the board Tuesday following an unsuccessful mediation between the two sides.

Market Basket Board Chair Jay K. Hachigian released a statement Wednesday morning, announcing the firing.

“Despite extensive efforts by the Board and Mr. Demoulas to come to terms, the mediation was not successful,” Hachigian said. “The Market Basket Board late yesterday voted unanimously to remove Arthur T. Demoulas as President and CEO of Market Basket.”

Hachigian didn’t say why the mediation failed, saying only that the board met with Demoulas on Sept. 3 in a confidential mediation in Delaware before former Vice Chancellor Joseph Slights III and continued the mediation via video conference on Sept. 9.

Both parties agreed not to comment publicly during that time, according to Hachigian, who added that the board has filed an action in the Delaware Court of Chancery in connection with the removal.

Ahead of mediation, a spokesperson for Demoulas said he was confident that mediation would be successful if the board shared the same commitment to reaching an agreement that he did.

NBC10 Boston has reached out for comment from Demoulas on his firing but has not heard back yet.

Boston attorney Amy Mariani specializes in business mediation and talks with us about what goes into these kinds of meetings.

Hachigian said Demoulas’s firing will not impact the grocery chain’s customers.

“We assure our valued associates and customers that, as we have demonstrated over the past several months, Market Basket will not change its operations, profit-sharing, bonuses or culture, and will continue to offer the best groceries at the lowest prices anywhere in New England—well into the future,” he concluded his statement.

There was no immediate word from Hachigian on who will succeed Demoulas as chief executive.

So, what led to this point? The NBC10 Boston podcast, Food Feud: Market Basket, has followed every twist and turn of this ordeal, while unpacking how a century of Demoulas family history has led the company to where it is today. The podcast is available on streaming platforms now.

Food Feud: Market Basket is available wherever you listen to podcasts.

The ongoing dispute began in May, when it was announced that Demoulas and other executives were put on an administrative leave by the company’s board of directors. The board alleged that Demoulas was planning a work stoppage and that he had a “unilateral right to appoint his children to succeed him.”

Demoulas called the board’s investigation at the time “a farcical cover for a hostile takeover.”

The suspension came 11 years after Demoulas, known among workers and some shoppers as “Artie T.”, was fired from his job. His firing sparked massive backlash in 2014, and led to walkouts and boycotts, which eventually helped him to regain his post.

In those days, the board of directors was controlled by a different side of the family led by his cousin, Arthur S. Demoulas. Arthur T.’s side bought out the Arthur S. side, which put him back in control of the company.

The latest family infighting, however, appeared to be within Arthur T.’s side. His three sisters, Caren, Frances and Glorianne, have a combined majority control over the board of directors, which is the body taking action against Demoulas.

The board hired an outside law firm, Quinn Emanuel, to conduct an internal investigation into Demoulas and his deputies. The investigation was said to be nearly complete in July, but findings were not to be released until last week’s mediation session.

Since the initial suspension, much of the conflict has played out in public view. The board of directors and Demoulas had each been working with public relations agencies to share their point of view with news media and community members.

In July, two of Demoulas’ closest executives, Joe Schmidt and Tom Gordon, were fired from the company after having been put on leave alongside the CEO. The company said they were fired for “insubordination, making false and derogatory remarks about the company and people associated with it, and inappropriate communications with colleagues.”

The two former executives denied any plans for a work stoppage, and have been outspoken about how they believed this was a succession plan by Artie T’s relatives.

Joe Schmidt and Tom Gordon – who have both worked for Market Basket for decades – say they will continue to fight for the culture and future of the company, and denied being insubordinate or coordinating a work stoppage.

Later in the summer, Schmidt and Gordon were the subject of an order by a Middlesex Superior Court judge to stay away from corporate property at the request of the company, amid allegations they continued to go to Market Basket locations after their firings.

Schmidt and Gordon were not the only Arthur Demoulas loyalists who were let go over the summer. A longtime member of Market Basket’s board of directors, Bill Shea, was removed from his board post earlier this month. Shea had been vocal in his support for Demoulas.

Also this summer, corporate employee Valerie Polito, who on the behalf of several other employees, voiced concern over what they called an atmosphere of “fear, hostility and lack of direction,” as they demanded the reinstatement of the executives.

Polito said that workers were scared to speak openly or ask questions, with a supervisor allegedly being suspended for asking about operations and when Demoulas would come back to work.

A company spokesperson released a letter to news media that was signed by several corporate office employees, refuting claims of a toxic workplace that were made by another group of employees.

“Allegations were made of hostile work environments, bullying, intimidation, fear and repression,” the letter said. “It’s not true. That is not the environment we work in. What they describe is not our experience. There is no ‘culture of fear’.”

The public war of words has attracted the attention of elected officials, including Methuen Mayor D.J. Beauregard, who previously spoke to NBC10 Boston on his public support of Demoulas.

“Let me be clear: whatever is happening behind closed doors at Market Basket needs to stop. Now,” Beauregard wrote in the letter dated July 24. “Resolve this internal dispute and bring back Arthur T. Demoulas — before the damage becomes irreversible.”

The board of directors had also previously issued several statements assuring the public that the Market Basket New England knows and loves is not at risk of changing its culture, regardless of the situation unfolding at its top leadership.

A longtime member of Market Basket’s board of directors who has been vocal in his support for suspended CEO Arthur T. Demoulas has been removed from the board, according to a public relations firm representing Demoulas.

Bill Shea, who has been on the company’s board of directors for 26 years, was removed following a vote by the three sisters of Demoulas who are 60% shareholders – Caren Demoulas Pasquale, Frances Demoulas Kettenbach and Glorianne Demoulas Farnham, according to the spokesperson with Rasky Partners.

The Demoulas team claims that he was not informed until after the vote was taken, and that the move leaves him without representation on the board of directors.

“In taking this action, Mrs. Kettenbach, Mrs. Farnham and Mrs. Pasquale have done two things. They have eliminated the one person who had the right to demand the factual information behind these false accusations; the one person who could question their actions and that of their hand-picked board members,” Demoulas’ spokesperson, Justine Griffin said. “And inside of eight months they have wiped out any dissent to their moves, not to mention the deep knowledge of the company the board previously possessed, and the insights it enabled. Clearly, that was not what interests them.”

NBC10 Boston has reached out to Market Basket’s board for more information.

This comes after a judge sided with the board in issuing an injunction to keep two fired executives away from company property.

Market Basket has claimed that Joe Schmidt, the store’s former director of operations, secretly held on to his master key and trespassed going into company headquarters in Tewksbury and a store in Somerville, where Schmidt was captured on surveillance video waving to the security camera.

The company alleges Schmidt and former grocery supervisor Tom Gordon also travelled to more than 20 store locations in multiple states to speak with employees as part of a concerted effort to possibly spur a boycott.