REVERE, Mass. — Longtime Market Basket CEO Arthur T. Demoulas has been placed on paid administrative leave amid an investigation into allegations that he’s been considering leading a work stoppage that could upend stores across Massachusetts and New England.
The Tewksbury-based grocery chain’s board of directors informed employees on Wednesday that a law firm would be investigating “credible allegations” that Demoulas was planning to disrupt operations of the grocery giant’s 90 locations and over 30,000 workers by planning a work stoppage.
The board said it believes that Demoulas’ alleged planned work stoppage was in retaliation against the board for requiring him to work collaboratively with them regarding “basic company operations and plans.”
“At a time of great economic uncertainty for many households, such work stoppages would significantly harm and broadly disrupt Market Basket’s stores and operations across New England, as well as its valued customers, associates, and vendors,” the Market Basket Board of Directors told Boston 25 in a statement.
Justine Griffin, a spokesperson for Arthur T. Demoulas, said in a statement that the CEO and minority owner of Market Basket was ousted in a “hostile takeover” by his three sisters and three appointed board members-Jay Hachigian, Steven Collins, and Michael Keyes.
Hachigian assured employees that there would be no changes to their jobs, salaries, or benefits.
“There is no insurgent group, there is no one looking to change pricing, there is no one looking to change employee comp or benefits or profit-sharing,” Hachigian told reporters. “Everything will remain the same.”
Demoulas’ daughter, Madeline, and son, Telemachus, were among several other Market Basket employees also placed on leave, Griffin said.
“Under Mr. Demoulas’ leadership in December of 2024, the company paid off $1.6 billion in debt that financed the purchase of the company in 2014,” Griffin said. “The company is currently operating at its peak performance, and the notion that this board is going to conduct an investigation is a farcical cover for a hostile takeover.”
Steven J. Collins, Director of Market Basket, added, “Market Basket stores provide a place that our local communities consistently count on for both their livelihoods and daily needs—the Board has a responsibility to safeguard the company’s effective operations now and well into the future."
A spokesperson for the board of directors said that Demoulas will continue to be paid his full salary.
While Demoulas is suspended, the board of directors says leadership of the company will fall to the existing management team.
“As you know, Market Basket takes great pride in operating with unwavering integrity that aligns with our high standards, treating our professionals with respect, and consistently delivering meaningful value to our customers,“ the memo reads. ”Thank you for your commitment to our Market Basket community and our customers.”
The board of directors is unsure how long the investigation will take, but noted they have no plans to sell the company.
Demoulas’ suspension comes 10 years after he was fired by a board controlled by Arthur S. Demoulas, his cousin and rival. After being sacked, store workers staged a walkout in support of Arthur T. that lasted six weeks.
To protest, hundreds of warehouse workers and drivers refused to deliver fresh produce, leaving shelves depleted. Not only did the workers stick together, but customers soon followed by boycotting the stores in solidarity.
Customers began to shop elsewhere because they couldn’t find fresh food at Market Basket, while others stayed away in a show of support for workers and Arthur T. The usually crowded stores turned into ghost towns, with only a trickle of customers coming in.
After weeks of pressure from suppliers suffering lost revenue, and the governors of Massachusetts and New Hampshire getting involved in work negotiations, the company announced that an agreement had been reached for Arthur T. to pay $1.6 billion for the 50.5 percent share of the company owned by Arthur S. and other family members.
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