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Power to the workers: How grocery chain employees saved beloved CEO

Market Basket saga will be taught at business schools for years to come, professor says
'There are a lot of hugs happening today,' Market Basket employee says
Market Basket CEO: Saga was about 'fairness, justice and a solid moral compass that unites the human soul'

Artie T. is back.

The beloved chief executive of the New England grocery chain Market Basket, Arthur T. Demoulas, has been reinstated in what experts are calling a testament to the power of passionate employees.

“You have demonstrated to the world that it is a person’s moral obligation and social responsibility to protect a culture which provides an honorable and a dignified place in which to work,” Demoulas said at a rally Thursday where employees whooped and hollered as passing cars honked to show support.

The ouster of Demoulas, or Artie T., as his employees call him, prompted six weeks of protests and boycotts of the chain. It ended Wednesday night with a deal in which Demoulas and his allies will buy the 50.5% stake in the company owned by his rival and cousin, Arthur S. Demoulas.

Arthur T. Demoulas’ management team, which was fired after protesting his forced departure as chief executive, will also be reinstated, the company said in a statement.

“We’re back to work, full steam ahead,” said Joe Garon, who worked at the company for 49 years until he was fired last month.

In a Somerville, Mass., Market Basket store that had been all but empty a few weeks ago, customers were already coming back and phones were ringing “off the hook,” said Jessica Rosa, a five-year employee who works in the customer service department. Shelves of produce, dairy and meat had been bare during the protests as suppliers stopped deliveries. She expected them to be full again by Monday.

“There are a lot of hugs happening today,” she said.

Some experts question whether Market Basket, which employs 25,000 workers throughout its 71 stores in Massachusetts, New Hampshire and Maine, will be able to recover from six weeks of shrunken sales and bad publicity.

But Garon, who works as a buyer at the company’s Tewksbury, Mass., headquarters, said he expected “we’ll have more customers than ever. ... People will want to know what is so special about Artie T. and Market Basket.”

It's a question many have asked of the ousted chief executive. After all, some chief executives of late have made headlines for firing employees or earning exorbitant salaries. But Demoulas is a “people person” who knows everyone by name and makes it a habit to form personal connections with customers and employees, even attending the funerals of workers’ family members.

Demoulas also encourages employees to move up the corporate ladder and achieve their full potential, Garon said. Many of Market Basket's top managers in the corporate office started out bagging groceries in the store as teenagers.

Demoulas was ousted in June after his cousin Arthur S. Demoulas gained control of the board. Members of the board had accused Arthur T. of ignoring them; he said they were greedy and wanted a big share of profits he said should go to employees. The two sides of the family have warred for years in and out of court; at one point there was even a fistfight between the cousins.

Arthur T.’s management philosophy encouraged strong loyalty from employees who left work in order to join protests. Now, they are ready to get back on the job.

“Tonight we raise a glass to Artie T. and each other as we have achieved the most improbable of upsets,” said a statement on the Save Market Basket Facebook page. “Tomorrow we go to work and never, in the history of people going to work, will so many people be so happy to punch the clock.”

Comments on the Facebook page indicate customers will be back too.

“See you at 7 a.m. tomorrow to buy anything on the shelves!!!!” wrote Patricia Desmond. “I don’t even have a dog but I’ll buy dog food if needed!!”

The events at Market Basket over the last months will become a case study for business schools, said Daniel Korschun, a professor at Drexel University who has been following the protests.

“This is the best evidence that we have yet that stakeholders can shape the direction of a company,” he said.

Companies across the country increasingly focus on shareholders rather than employees, suppliers and customers, he said. Market Basket shows that it doesn’t have to be that way.

Other discontented employees may look at the Market Basket example and think of trying to band together and change their situation, said Thomas A. Kochan, a professor at the Sloan School of Management at MIT.

“I do think a lot of employees, managers and board members are looking at this and feeling some of these same frustrations and fears, and thinking, ‘I'll take some action,’” he said.

Perhaps Arthur T. Demoulas had that in mind during his impassioned speech to employees that was shown on television screens around New England on Thursday.

“You proved, all of you, that your grass-roots efforts to save your company and harness thousands and thousands of people was not about a family conflict or a Greek tragedy,” he said, “but more about fairness, justice and a solid moral compass that unites the human soul.”

Twitter: @AlanaSemuels

Copyright © 2015, Los Angeles Times

UPDATE

4:20 p.m.: The story was updated throughout with new details.

The story was originally posted at 9:11 a.m.

 

 

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