Former RadioShack CEO caught in protest over ousted leader at Market BasketJuly 23, 2014
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Employees protest over many things: higher wages, better benefits, safer working conditions in their jobs. What's far more unusual, if not unprecedented, is to see workers, organized by senior managers, stage a rebellion to help their CEO get his job back.
Yet that's just what been happening recently at a 71-store grocery chain based in the Northeast. Thousands of employees of Market Basket, which has locations in Massachusetts, New Hampshire and Maine, have held rallies over the exit of their chief executive, Arthur T. Demoulas. "Artie T.," or "ATD," as he's called by employees, was ousted in June by a board that's controlled by his cousin, the similarly named Arthur S. Demoulas. For decades, the company has been embroiled in a family feud that has spilled over into not only an unusual battle aligning management and rank-and-file employees against the board, but a public relations crisis and an election year topic for local politicians.
The company's CEO position was filled by a duo: James Gooch, Radio Shack's CEO who resignbed in 2012, and Felicia Thornton, formerly of Albertsons.
The events of recent days included a mass rally on Friday that drew an estimated 2,500 people, many of them Market Basket employees, to protest the ouster of Demoulas. Employees, who held signs at the rallies with Arthur T.'s picture that read "I Believe," are concerned the board and the new co-chief executives, who were brought in from the outside, will make changes to the company's culture and business model. Market Basket is known for offering low prices and high levels of customer service, thanks in part to its above-average compensation and benefits.
Then on Monday, employees held an even larger rally for Arthur T.'s return, this time with estimates of 5,000 or more people in attendance, after eight senior Market Basket employees who had helped organize protests were reportedly fired on Sunday. Monday evening, the former CEO issued a public statement urging the reinstatement of the managers who had lost their jobs. Employees are planning more protests, local politicians have weighed in with boycotts and statements of support, and photos of empty store shelves left barren from employees' walkouts are being shared around social media.
"It's quite remarkable," says Ashley McCown, president of the Boston-based communications firm Solomon McCown & Co. The momentum that's built around the story, she says, hasn't "just been a one day thing," she says. "It's been going on well over a week. It's one for the crisis playbook. Any of the commentary I've heard form lawyers and academics and labor experts is that this is unique."
(An email to the company was not immediately returned and a call to the company's headquarters was answered with a recording saying the switchboard was not operating. In a statement that was previously reported, the two new co-CEOs said "the direction of the company has not changed" and re-confirmed their commitment to paying bonuses and profit-sharing contributions.)
What would inspire such loyalty, especially in a world where CEOs are increasingly viewed as an out-of-touch group of 1 percent-ers and the corporate social contract feels as if it's all but disappeared? A CEO that has a track record of paying above-average pay and benefits, for one. But in speeches, blog posts and media reports, employees spoke of the former CEO's integrity, accessibility and generosity. He was known for attending the weddings and funerals of employees' families. "He's George Bailey," says Tom Trainor, a 41-year veteran of the company who was a district manager of 37 stores before he was fired Sunday, comparing Arthur T. to the fictional savings-and-loan manager from the film "It's a Wonderful Life." "He cares more about people than he does about money."
Trainor, who says the protests are a completely grass-roots effort, described Arthur T. as being more comfortable walking his stores, talking with employees and customers, than he was in the office. On the first day the company opened its first store in Maine, "it took him 4.5 hours just to get in the building because there was a line of customers and employees out there. He took time to speak with every one."
Daniel Korschun, a professor of marketing and fellow at Drexel University's Center for Corporate Reputation who has been studying Market Basket for a case study, attended the rally on Monday. He heard employees talk of Arthur T.'s visits to employee family members in the hospital. "He seemed to be fairly involved in people's lives, and I think he was a big believer in being a low cost provider to communities."
Korschun became interested in studying the company for the uniqueness of its story. "The employees and the customers -- they see themselves as the organization," he says. "The board and the new CEOs are seen as the outsider. It's the exact opposite of what you usually see." In reputation management, he says, the effort is usually on protecting the image of the company and the brand. But in this case, the reputation damage "is not to the company. It's to the board and the new co-CEOs. Market Basket's brand itself is really quite strong right now."
Still, however successful the protesting employees have been so far at generating public goodwill, they will need to be careful, says John Carroll, a mass communication professor at Boston University. If they overplay their hand, this could become "a classic example of destroying the village to save it," he says. Saying things like "we are going to shut this company down" has the potential to backfire. "If this is about justice, the public will support that," he says. "But if this is about vengeance, that could end up leaving a bad taste in the public's mouth."
Trainor says their rallies are about justice, and he doesn't seem concerned about the long-term impact the campaign could have on customer loyalty. Even though store shelves are increasingly empty, thinned of basic items like produce and seafood due to slowed deliveries, "the customers are going to come back," he says. "Our customer support is phenomenal."