Clamsplainer: Market Basket Is Freakin’ Out

We left off yesterday’s post about the Basket case at the end of the kerfluffle spanning the ’90s with the stripper, the fraud, and the blackmail. Seriously, go read that part if you haven’t, but don’t come after me for migraine pills, I used them all up writing it.

So what does Market Basket’s checkered family past have to do with what’s going on today, and why the hell doesn’t the Basket have any salad fixings at all?

20140721_173123

Nothin’ left but some melons and an artistically placed Gloucester Clam sticker, naturally.

You may recall that yesterday, I explained that Mike’s son, Arthur T Demoulas, was involved with his father’s legal team and the whole “secret recordings” and “blackmail a court employee” debacle. He’s the center of today’s fight, having just been ousted as CEO. It’s complicated. Of course. Like everything else involving the name “Demoulas”.

Anyway, after the lawsuits of the ’90s into the ’00s shake out, the judge forces Mike’s side of the family to give up 51% of Market Basket to George’s side. Mike’s side of the family lost the lawsuits pretty soundly – it’s hard to excuse flagrant fraud, forgery, and hiding assets from your family.

Back in early 2008, Market Basket’s board votes Arthur T Demoulas in as CEO. He is by all accounts a pretty reasonable guy who is hell-bent on treating his employees like family. Or, better than family, seeing as how the Demoulas family has beaten up and defrauded each other for decades now and OSHA and the Department of Labor aren’t keen on doing that to produce clerks.

Artie D is so reasonable that during the economic downturn, his profit-sharing employee account loses $46m in a quarter and he REPLACES THOSE FUNDS with his own company’s profits so his employees don’t suffer. This is relatively unheard of -all investment is risky, after all, and most people in America lost money from pensions or 401ks in 2008. This move majorly pisses off his cousins on George’s side of the family, who like things like “profits” and whatnot.

For five years, Arthur T Demoulas, despite his side of the family’s past shady and questionable tactics, is a beloved CEO to his workers. He is described as an affable, friendly, and humble leader. He pays well, employees have good health insurance. Workers trust him and are fervently loyal to him.

But in the summer of 2013, Arthur T’s cousin, George’s son Arthur S Demoulas, gains control of Market Basket’s board and calls a vote to oust Arthur T amid claims and a lawsuit that alleged he mismanaged the company, engaged in improper business deals with companies owned by his wife and her family, and withheld important information from the board. Meanwhile, Arthur S’s side has long been painted as interested in as much money as possible from their holdings (which explains their anger at Arthur T’s profit-sharing fund placement), without putting in the elbow grease Mike’s family did. This move was seen as a way for George’s side of the family to get dividends from their stock.

There was a massive outpouring of support for Arthur T Demoulas  – employees who had been at Market Basket for decades showed up for the board meeting and stood outside in August heat to support him. During the meeting, the board didn’t oust him, and he saved his job – for a bit. But Arthur S continued to push for his cousin’s dismissal.

Finally, late last month, Arthur T Demoulas was fired as CEO and replaced by a former Radio Shack executive named Jim Gooch (holding back laughter at unfortunate last name there) and Felicia Thorton, former executive at Albertson’s. A few upper level executives were also fired at the same time.

And then the shit hit the fucking fan.  

CAT'S OUT OF THE BAG NOW! haha get it

CAT’S OUT OF THE BAG NOW! haha get it

Remember when I said his employees were fiercely loyal? Well, because unions have fallen out of favor in the states, Market Basket’s employees aren’t unionized. They have no recourse if the new board, in order to boost profits (remember those dividends Arthur S’s family lusted after?), slashes their benefits and profit sharing. Many employees have been with the company for decades – the company is known for promoting from within. They knew that Arthur S’s takeover of the board spelled the end of employee-friendly policies as they knew it, and they were PISSED.

The board couldn’t have predicted the intensity of what came next.  Despite the lack of union, workers started protesting. They threatened to walk off the job if the board didn’t reinstate Arthur T – putting their own blue-collar jobs on the line for one of the state’s richest men. Last Friday, the murmurs of work disruption boiled over into a full-scale revolt – warehouse and store workers showed up at the company’s headquarters to protest despite warnings they’d lose their jobs, meaning Market Basket’s deliveries ground to a screeching halt. It has spiraled from there. Eight workers who organized the protests – supply chain supervisors with the company for 30 or 40 years in some cases – have been fired via a courier service. This has only served to fan the flames. Yesterday, the protests moved to store branches – here in Gloucester, a protest outside the Gloucester Crossing Market Basket grew despite the searing heat.

Protesters outside Gloucester Crossing, 7/21

Protesters outside Gloucester Crossing, 7/21

The protesters here in Gloucester, at least yesterday, are mostly younger folks. Kids for whom Market Basket was their first job. Single moms brought toddlers. My blog partner Jim showed up this afternoon, ostensibly to buy supplies for frittatas and organic beet salad, and instead grabbed some photos and video of the hoopla.

Think about this. It isn’t exactly the Anthracite Coal Strike of 1902, but how often do you see a worker action these days? And one not looking for higher wages or increased benefits, but one in favor of a company leader who the workers felt treated them decently. Here are young people taking a stand for something that is important to them and being pretty goddamned polite and articulate about it. They are risking their jobs. These are kids who are working because they need to, either saving for college or helping out their own families. Their jobs are massively important to them, but doing what they believe is the right thing is more important.

And local politicians are behind them. At last count, 19 local lawmakers had signed a statement in support of boycotting Market Basket. That’s a pretty good gauge of the seriousness of the situation – Market Basket hasn’t done anything illegal or even morally reprehensible, but it’s that serious that Martha Coakley has stood up and supported the workers’ demands to reinstate the CEO.

It’s a pretty engaging situation to be sure, and where it develops from here is anyone’s guess. It’s unlikely Arthur T will be reinstated, but Market Basket’s completely lost control of the situation. Someone get the popcorn and let’s all watch the schadenfreude.

Oh fuck, they sold out of popcorn.

About KT Toomey

Local business owner, mom, snarknado.
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95 Responses to Clamsplainer: Market Basket Is Freakin’ Out

  1. Pingback: Offers to Buy Demoulas Supermarkets Inc (DSM) | marketbasketletters

  2. Penny says:

    Thx for the facts and humor

    Like

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