TEWKSBURY, Mass. — The chair of the Market Basket board on Thursday shed more light on the decision to place longtime CEO Arthur T. Demoulas on paid administrative leave.
The Tewksbury-based grocery chain’s board of directors informed employees on Wednesday that litigation firm Quinn Emanuel Urquardt & Sullivan was investigating allegations that “Artie T” has been considering leading a work stoppage that could upend the grocery giant’s 90 New England locations and over 30,000 workers.
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.”
Two Market Basket directors who were put on leave spoke out against the decision to put them on paid leave in Reading on Friday.
“I’ve given my life for this place,” said Thomas Gordon, grocery director. “I have zero regrets.”
Gordon and Joe Schmidt, director of operations, denied any wrongdoing.
Schmidt continued, “They’re doing it so they can get to their ultimate goal, which is to remove [Demoulas] from CEO and president, and to remove individuals in support of him.”
The two say they were put on leave on Wednesday and given a letter with details of their suspension.
Chairman Jay Hachigian said in a statement to Boston 25 Friday:
“Joseph Schmidt and Tom Gordon each received letters specifically notifying them of the basis for their suspensions with pay, including that they have been actively pressuring associates to participate in an improper work disruption. As we also informed them, we are conducting an investigation to get to the bottom of it. Therefore, any suggestion that they are not aware of the basis for their suspensions is simply not true.”
The board said they are investigating their involvement in claims that they were orchestrating a work stoppage alongside the longtime CEO.
Gordon continued, “This accusation that we are somehow conspiring to stage some kind of a work stoppage is absurd.”
In a statement shared with Boston 25 News on Thursday, Hachigian said that Demoulas “essentially hijacked” the company.
“Mr. Demoulas has acted for years as if he owns the entire company and can make every decision, big and small, without discussion or accountability to anyone,” Hachigian alleged. “He has essentially hijacked this company for himself, and when the board put its foot down, he started to make plans to boycott and harm the company.
Demoulas’ daughter, Madeline, and son, Telemachus, were among several other Market Basket employees also placed on leave, according to Justine Griffin, a spokesperson for Demoulas.
Griffin has alleged that Demoulas was ousted in a “hostile takeover” by his three sisters and three appointed board members: Hachigian, Steven Collins, and Michael Keyes.
Hachigian fired back Thursday, criticizing Demoulas’ behavior.
“It’s simple: he wants it his way or no way,” Hachigian alleged. “And that’s not the way a CEO and minority owner like Arthur can be allowed to continue to conduct himself.”
The board assured employees that there would be no changes to their jobs, while also assuring customers that the investigation into Demoulas’ alleged actions wouldn’t impact store operations.
“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 said Wednesday. “Everything will remain the same.”
All trucks made scheduled deliveries to Market Basket stores on Thursday, and the weekly deal flyer went out as well, according to the company.
The board told Boston 25 they had a meeting Friday morning where they voted 3-0 with one abstention to uphold the suspension of Arthur T. Demoulas and others in light of an independent investigation.
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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