July 23, 2014

Former RadioShack CEO in the middle of family business feud

Thousands of employees and supporters are rallying behind the ousted CEO of a Massachusetts-based grcoery chain, now run by former RadioShack CEO Jim Gooch.

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 stage a rebellion to help their CEO get his job back.

Yet that’s just what been happening in the Northeast where thousands of employees of Market Basket, a 71-store grocery chain with 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 and replaced by co-chief executives Felicia Thornton and Jim Gooch, the former CEO at RadioShack.

For decades, Market Basket 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.

The events of recent days included a mass rally on Friday at the company’s headquarters in Tewksbury, Mass., 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 top executives 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. On 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 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, Thornton and Gooch said “the direction of the company has not changed” and re-confirmed their commitment to paying bonuses and profit-sharing contributions.

Gooch came to RadioShack in 2006 as chief financial officer and was named CEO in 2011 after Julian Day retired. But he was removed from the job by the board of directors 16 months later as performance of the consumer electronics company declined.

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