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Market Basket CEO Arthur T. Demoulas placed on paid leave by supermarket board
The decision to place Demoulas on leave echoes the controversy that led to widespread strikes at the supermarket chain in 2014.
Market Basket chief executive Arthur T. Demoulas has been placed on paid administrative leave by the company’s board of directors to investigate alleged plans to lead a work stoppage.
Demoulas, along with other employees who were also placed on paid leave, allegedly planned to disrupt the supermarket chain’s business, according to a statement released Wednesday from the Executive Committee of Market Basket’s Board of Directors. The committee wrote that it believes the work stoppage was planned as an act of retaliation due to simmering tensions between Demoulas and the board.
The Executive Committee claims that Demoulas was resisting directives requiring him to comply with the board’s “most basic corporate oversight” and provide them with “access to key employees,” the statement said.
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The committee also alleges that Demoulas ignored the board’s succession plan and insisted that he has “the unilateral right” to appoint his children as his successors, according to the statement.
“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 committee wrote in the statement.
While Demoulas is on leave, the board plans to rely on Market Basket’s existing management team to “ensure that the operations of the 90 stores will be uninterrupted,” according to the statement.
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Demoulas was ousted by Jay Hachigian, Steven Collins, and Michael Keyes, the three appointed board members who represent his three sisters, according to a statement from Justine Griffin, his spokesperson. His daughter, Madeline, and son, Telemachus, were also placed on leave, Griffin said.
Employees learned that Demoulas was placed on leave in a memo Wednesday, which reassured workers that their jobs were protected.
“We can assure you that none of your jobs are in jeopardy, and all benefits including bonuses, profit-sharing and other employment benefits are completely secure,” Hachigian, Collins, and Keyes wrote in the memo. “This action has nothing to do with the way we operate our business and nothing about our everyday values or the work that makes Market Basket’s culture so special will change.”
The decision suggests further tensions within the Demoulas family, which prompted widespread strikes in the summer of 2014 when Demoulas was ousted from the position by his cousin, Arthur S. Demoulas. In the end, Arthur T. reclaimed his role when he reached a deal with Market Basket’s shareholders to buy out the chain.
“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 in a statement. “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.”
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