Two Execs Fired for 'Insubordination' in Company Crisis

Market Basket's Leadership Crisis Escalates

The ongoing leadership crisis at Market Basket has taken a dramatic turn as two long-time executives, Joe Schmidt and Tom Gordon, have been officially fired. The news comes after both were placed on administrative leave in May amid allegations that they were involved in planning a work stoppage similar to the events of 2014.

In a statement, Arthur T. Demoulas, the embattled CEO of Market Basket, expressed his disappointment over the decision. He emphasized that Schmidt and Gordon were not only key figures in the company’s success but also individuals of strong character and integrity. Demoulas criticized the board for what he described as a lack of understanding of the company's culture and values.

He further accused the board members, including Steven Collins, Jay Hachigian, and Michael Keyes, of failing to appreciate the decades of service that Schmidt and Gordon had provided. According to Demoulas, their dismissal was part of a "pre-planned coup" aimed at undermining the company's legacy.

Background of the Corporate Turmoil

The corporate turmoil within Market Basket became public on May 28 when the board announced that several employees, including Demoulas, his brother-in-law Gerard Lewis, his son Telemachus, and his daughter Madeline, were placed on administrative leave. The board alleged that these individuals were planning a work stoppage similar to the 2014 incident, which resulted in significant financial losses for the company.

While those placed on leave denied the allegations, the board also accused Demoulas of withholding critical information about the company's operations and finances. Additionally, they claimed he failed to engage with the board on a succession plan.

Since then, at least three other employees, including District Supervisor Paul Quigley and Operations Supervisors Adam Deschene and Esteban Alvarez, were also placed on leave. These employees stated that they were being punished for voicing concerns about the situation.

Board's Response and Investigation Findings

In a detailed statement, the Market Basket board outlined the reasons for firing Schmidt and Gordon. They cited insubordination, making false and derogatory remarks about the company, and inappropriate communications with colleagues. The board claimed an investigation uncovered evidence of a planned work disruption involving both individuals.

According to the board, the allegations against Schmidt and Gordon included encouraging a widespread work disruption, which could mirror the 2014 employee walkout and vendor and customer boycott. This event cost the company over a half billion dollars and ended when Demoulas and his sisters bought the company.

The board also highlighted that Schmidt and Gordon continued to spread false information even after their suspensions. For instance, Gordon reportedly told associates that the majority shareholders were "evil," while Schmidt made false claims about the impact of Demoulas's removal on employee bonuses and profit sharing.

Unauthorized Media Campaigns

The board noted that Schmidt and Gordon engaged in unauthorized media campaigns to disparage the company and its leadership. They referenced statements made by Schmidt and Gordon in interviews with The Sun, where Schmidt falsely claimed he was escorted out of the headquarters by six armed guards. The board also pointed out that Schmidt made false statements about the company's leadership and operations.

Gordon, too, was accused of publicly criticizing the board and its chair, Jay K. Hachigian. He reportedly stated that Hachigian did not perform his duties adequately and expressed disappointment over the company's current state.

Conclusion

The board concluded that the actions of Schmidt and Gordon, despite multiple warnings, led to their termination. They emphasized that the suspension was necessary to conduct an investigation into credible allegations of improper conduct. However, the firings have sparked further controversy and debate about the future of Market Basket and its leadership structure.

Schmidt and Gordon have not yet commented on their dismissals, leaving many questions unanswered about the ongoing conflict within the company.