EagleTribune.com, North Andover, MA

July 21, 2013

Attention, Shoppers: Market Basket employees make big statement

Vocal backing of CEO likely swayed board vote

By Brian Messenger
bmessenger@eagletribune.com

---- — ANDOVER — It was a scene fit for a celebrity, not a regional grocery magnate.

What would drive more than 1,000 people, many of them carrying signs and a few more brandishing bullhorns, to stand for hours in sweltering heat outside the Wyndham Hotel?

The answer was obvious Thursday morning, if you were there to read the homemade posters and T-shirts and hear the raucous chants. Arthur T. Demoulas’ job as CEO of Market Basket was in jeopardy — and this crowd had their boss’s back.

In an era where retail business owners ensure profitability by paying employees low wages and keeping them part-time to control health insurance costs, Market Basket employees say they can count on a solid paycheck, regular bonuses, generous healthcare, and even a profit-sharing plan. As a result, they’ve grown fiercely loyal to the man they call “Artie T.”

Demoulas’ tremendous rank-and-file support was never more obvious than at 9:25 a.m., when he arrived at the Wyndham in the passenger seat of a slow-rolling Ford sedan. The crowd erupted and at one point nearly swarmed the vehicle.

“It was like a boy band showing up,” said Bob Forrant, a history professor at the University of Massachusetts Lowell. “You usually don’t see that many people rallying in the street saying, ‘I love my boss.’ That type of passion can’t be faked.”

Thirteen hours later, Demoulas still had his job. After deliberating all day, the Market Basket board of directors made no motion to remove him as CEO, a change that was sought by his cousin and family-business rival, Arthur S. Demoulas.

In addition to Market Basket’s employee-friendly policies, Forrant said the outpouring of support for Arthur T. Demoulas is a reflection on the local economy. If the labor market was better — and people felt more secure about their financial standing — there’s a chance the campaign to “Save Artie T” would have been less robust, Forrant said.

“I didn’t surprise me because it’s symptomatic of people worrying over job loss and everything that’s been happening in the economy, generally, over the last three or four years,” said Forrant, a labor historian and regional economic expert.

Historically, Forrant said “it’s almost never a good thing” when a board meddles with business leadership. Typically, the board is looking for a way to make more money, and often that comes at the expense of workers, he said.

With the Market Basket board set to meet again in late August, it remains unclear whether Arthur T. Demoulas’ job is safe, or whether board members simply delayed a difficult decision until the public spotlight shifts away.

Regardless, Forrant said the rally in Andover on Thursday and the preceding week’s customer signature drives at Market Basket stores across Massachusetts and New Hampshire very likely had an impact on the board.

“I think if no one was there, they probably could have gone the other way,” said Forrant.

‘A million stories’

One of Arthur T. Demoulas’ first stops outside the boardroom Thursday night was the Market Basket warehouse in Tewksbury, where he arrived around 11 p.m. to offer his thanks, according to employee Hector Tellez of Lawrence.

“He was so happy,” said Tellez. “He was tired, too.”

A native of Guatemala, Tellez had been living in the United States for less a year when he was hired at the Market Basket warehouse 13 years ago. Tellez said there are hundreds of employees in the company with similar stories to tell.

“My family depends on my paycheck weekly,” said Tellez. “I’m lucky.”

Other tales of “Artie T” show a CEO willing to help when tragedy strikes.

Four years ago, Joe Lenane of Newton, N.H., was diagnosed with cancer at age 16. With Arthur T. Demoulas’ blessing, Lenane’s mother, Deborah, left work for three consecutive weeks so she could be by her son’s side in the hospital.

“He made sure that my mom was paid for the time she was with me,” said Lenane, who attended the Andover rally. “And without the health insurance from Market Basket, I probably wouldn’t be here today.”

When his cancer treatment ended in December 2009, Lenane began working as a grocery clerk alongside his mother at the Plaistow, N.H., Market Basket.

“(Arthur T. Demoulas) definitely helped save my life,” said Lenane. “Why get rid of a guy that has such a big heart?”

Joe Angelari of Methuen shared a similar story from six years ago, when his then 47-year-old co-worker was diagnosed with stomach cancer.

“Arthur told him, ‘Don’t worry about a thing. Take all the time you need,’” said Angelari. “There’s a million stories like that.”

Some of those stories are far smaller in comparison, like when Arthur T. Demoulas made the trip out to Ashland to walk the store aisles with Angelari just days after he was promoted to manager there.

“I knew he’d come. I wasn’t surprised,” said Angelari, a Market Basket employee for 24 years. “Arthur puts the people first. He puts the employees of the company before himself. It’s unheard of.”

‘Refocus on the job’

Market Basket employees in Londonderry returned to work Friday with a sense of relief knowing their boss was still in charge, while customers offered “high-fives, smiles and congratulations,” according to store manager Mark Lemieux.

“Our hard work and teamwork paid off,” said Lemieux. “First time in my life I’ve ever been involved with something like that. ... (Now) we can refocus on the job at hand and taking care of customers again.”

For years, the Demoulas family has wrangled over of what has grown into a 71-store grocery chain, which has roots in Lowell but has expanded across Massachusetts and New Hampshire.

Arthur T. Demoulas has served as CEO since 2008. Arthur S. Demoulas and other members on his side of the family allege Arthur T. Demoulas has mismanaged the company and ignored instructions from the board, according to various reports.

Multiple attempts to reach Arthur S. Demoulas for comment last week were unsuccessful.

Market Basket’s “low price, low cost and local approach” led to a $217 million profit and no debt last year, according to Ying Huang, an assistant marketing professor at UMass Lowell’s Manning School of Business.

While the chain boasts many loyal customers, Huang believes public infighting among the Demoulas family comes with risk.

“Such a high-profile spat certainly hurts the chain on its corporate image in the eyes of customers,” wrote Huang in an email. “Particularly for Market Basket, the current fight also reveals the previous one. Many people did not know about the history of company ownership that happened years ago when the current CEO Arthur T. Demoulas’ father was accused of stealing ownership shares from his brother — the other founder of the chain who passed away.”

Huang wrote that such family disputes threaten to “shake up customers’ and suppliers’ belief in the company’s integrity, and may hurt employee morale and commitment.”