CEO Of Popular MA Grocer Put On Leave Amid Allegations: What's Next For Stores?

(Updated 1 p.m.)

TEWKSBURY, MA — More than a decade after an internal feud led to a six-week Market Basket employee walkout and widespread customer boycott, the Tewksbury-based grocery store chain is once again embroiled in drama after the Executive Committee of the Market Basket Board of Directors placed CEO and minority shareholder Arthur T. Demoulas — and other family members — on paid administrative leave.

The Board of Directors said Demoulas is facing what it called "credible allegations" that he "began to plan a disruption of the business operations of Market Basket with a work stoppage."

Demoulas gained near-unprecedented public support from both employees and customers during the summer of 2014 when attempts to oust him led to a walkout of the 90-store chain viewed as a less-expensive alternative for many compared to the other major chains across New England.

Eventually, the Board of Directors caved in 2014 and brought Demoulas back into the fold as employees and customers returned.

In the latest conflict, the Executive Committee said Demoulas, and others, began setting the stage for another disruption for what it called "improper retaliation for the Board's directives requiring the CEO to work with the Board regarding the most basic corporate oversight and to provide the Board access to key employees."

Demoulas is also accused of resisting "an appropriate succession plan" for the company, saying the CEO claimed he has the "unilateral right" to appoint his children to succeed him.

"Market Basket stores provide a place that our local communities consistently count on for both their livelihoods and daily needs — the Board has a responsibility to safeguard the company's effective operations now and well into the future," said Steven J. Collins, Director of Market Basket.

A source close to the company sought to emphasize to Patch on Thursday afternoon that the latest dispute is not a case of "family drama" but was spurred by Demoulas's reticence to work with the Board on "the most basic measures of corporate governance."

The company issued a statement saying that business at the 90 stores will be uninterrupted during the paid leave and that "there will be no changes for the company's dedicated associates in their jobs, salaries and benefits, including the company's profit-sharing plan, and the ownership of the business will not change."

(Scott Souza is a Patch field editor covering Beverly, Danvers, Marblehead, Peabody, Salem and Swampscott. He can be reached at Scott.Souza@Patch.com. X/Twitter: @Scott_Souza.)

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