Market Basket CEO is put on leave in new spat at family-controlled supermarket chain

A long-running family feud is once again roiling Market Basket, an iconic New England grocery chain with at least 90 stores. The company’s board has placed its CEO, Arthur T. Demoulas, on leave — a move that comes a decade after an attempt to oust Demoulas was thwarted partly by an employee strike.

In the current controversy, the board cited oversight concerns and disputed succession plans as it announced its move against Demoulas.

If you’re not familiar with the stores, Market Basket is “a whole thing in Greater Boston,” as member station WBUR reports: a cultural icon beloved for high-quality foods at reasonable prices. The supermarket chain’s roots extend to 1917, when Greek immigrant Athanasios “Arthur” Demoulas opened a store in Lowell, Mass. The business now also operates in New Hampshire and Maine. But as it has grown, family squabbles have persisted.

Two of Athanasios Demoulas’s sons grew Market Basket into a regional supermarket chain, as WBUR’s Curt Nickish reported on NPR in 2014.

“Their sons have been feuding for decades. An epic legal battle between the two in the 1990s featured a courtroom fistfight.” 

What is the current dispute?

The executive committee of Market Basket’s board said in a statement that it put Demoulas and several employees on paid leave, “effective immediately while an investigation is conducted into the CEO’s conduct.”

The board alleged that Demoulas has been planning a work stoppage to disrupt the business — an act they believe to be “improper retaliation” after the board required the CEO to cooperate with what they characterized as “the most basic corporate oversight.”

The board added, “Demoulas has also resisted an appropriate succession plan for Market Basket, asserting that he has the unilateral right to appoint his children to succeed him” without the board’s input.

What does Demoulas say?

A representative for Arthur T. Demoulas didn’t immediately respond to NPR’s requests for comment. But in a statement quoted by WBUR and other local news outlets, spokesperson Justine Griffin called the board’s claim of an investigation “a farcical cover for a hostile takeover.”

“Griffin said Demoulas’ three sisters and their three appointed board members were responsible for placing the CEO on leave,” according to WBUR. She also reportedly said the move against Demoulas comes at a time when the company is thriving financially.

An Arthurian tale of power struggles

Discord in the family controlling the Market Basket company made headlines more than 10 years ago, when Arthur T. Demoulas’ cousin, Arthur S. Demoulas, led a push to oust him as CEO. The two are grandsons of founder Athanasios “Arthur” Demoulas.

“An element of distrust has existed between the two factions for years,” Dave Solomon of the New Hampshire Union Leader told New Hampshire Public Radio in 2013, as the feud between two sides of the family began to spill into an outright struggle for control.

In the summer of 2014, Arthur S. Demoulas succeeded in pushing out his cousin, the CEO many employees called “ATD.” But the change ignited weeks of turmoil and boycotts by customers and employees loyal to Arthur T. Demoulas. Many of Market Basket’s more than 25,000 workers walked off the job — a stunning move considering that the company wasn’t unionized, and the workers were acting to help a CEO return to running what was then a multi-billion-dollar firm.

At the time, workers cited their relationships with Arthur T. Demoulas, along with a positive work environment and fears that new executives might axe their bonuses.

“Mr. Demoulas, ATD, is the heart and soul of Market Basket. Everything that this place is built upon, it’s him,” store manager Jamie Cunneen told Nickish in 2014.

After nearly two months, Demoulas succeeded in regaining the CEO post. He and his siblings had offered a buyout reportedly worth more than $1.5 billion to gain majority control of the company from the faction led by his cousin.

According to the board’s message this week, Demoulas is himself a minority shareholder in the family business.

As it announced the CEO’s on-leave status, the board said its actions won’t affect the company’s ownership structure — or workers’ pay and benefits, including their profit-sharing plan.