Feud between Market Basket board, CEO escalates as two longtime executives fired
Photo | Timothy Doyle
Market Basket's Shrewsbury location
After weeks of relative calm, a power struggle over control of Tyngsborough-based supermarket chain Market Basket has escalated, after the company’s board fired two longtime executives who have sided with suspended CEO and President Arthur T. Demoulas.
Market Basket fired Director of Operations Joseph Schmidt and Director of Grocery Operations Thomas Gordon on Tuesday, with the company claiming both were insubordinate and made false and derogatory statements about the company, despite multiple warnings to stop. Combined, the two executives had been with the company for 89 years before they were suspended and then fired.
“Among other things, the investigation uncovered evidence that Schmidt and Gordon, following their suspensions, both directly encouraged employees to slow down and disrupt operations at Market Basket, including by telling them to defy their supervisors,” a Wednesday statement from the board of Market Basket reads. “Referring to Demoulas’s sisters, Market Basket’s majority shareholders, Gordon told at least one associate, ‘The three girls are evil.’ Gordon also reportedly told several Market Basket colleagues that they should ‘choose sides wisely,’ meaning that if they did not side with Demoulas there would be adverse repercussions.”
The board claimed that Schmidt and Gordon had visited Market Basket in New Hampshire during their suspension, in violation of orders to stay away from the company’s stores, and were waging a media campaign to disparage the board.
Schmidt and Gordon fired back at the board during their Wednesday appearance on WGBH’s Boston Public Radio show, saying they were proud of being fired for what they said were their actions to preserve the company’s culture.
“The new regime that is running the market right now is very much trying to silence people,” Schmidt said on BPR. “Anytime you do that and don’t let people express their opinion, I think that’s problematic.”
Schmidt had appeared on BPR on Monday prior to his firing, saying standing up for what was right was more important than avoiding a potential termination, which ended up happening just hours after his appearance, he said.
Both Schmidt and Gordon were also fired in 2014, when a long-standing feud over business practices between Arthur T. Demoulas and his cousin Arthur S. Demoulas resulted in Arthur T. being terminated by the board controlled by Arthur S.
They later rejoined the company after months of boycotts from shoppers and workers eventually led to Market Basket being bought by Arthur T. for approximately $1.6 billion.
Both longtime executives received the support of Arthur T. Demoulas, who released a statement on Tuesday saying the firings were part of a pre-planned coup.
"Stephen Collins called Tom Gordon and Joe Schmidt today and fired them,” Demoulas wrote. “In addition to being men of strong character, these are two of the brightest and best grocery store operators in the business, and their extraordinary work has been key to building this company and its culture. This is among the worst decisions that could be made by this board. Steven Collins of Exeter Capital doesn’t understand this company’s culture. Nor do his fellow board members Jay Hachigian of Gunderson Dettmer and Michael Keyes of Intercontinental Real Estate.”
Market Basket has 95 locations across Massachusetts, Maine, New Hampshire, and Rhode Island, with Central Massachusetts locations in Ashland, Athol, Bellingham, Fitchburg, Hudson, Leominster, Littleton, Maynard, Oxford, and Shrewsbury. The Shrewsbury store opened in January 2023, after Market Basket purchased the site for $3 million in 2021.
Headquartered in Tewksbury, the company was founded by Greek immigrants Athanasios and Efrosini Demoulas, who opened their first grocery store in Lowell in 1917. The company has 4,198 local employees and 33,458 total employees, according to information provided to the WBJ Research Department.
EDITOR'S NOTE: This article has been updated to include more precise information regarding Market Basket's employee headcount.
Eric Casey is the managing editor at Worcester Business Journal, who primarily covers the manufacturing and real estate industries.
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