Victory Declared as Supermarket Standoff Ends With Worker-Friendly CEO's Return

Bringing to a close a summer-long supermarket standoff, a deal was reached late Wednesday to sell the majority stake of family-owned, New England-based Market Basket to Arthur T. Demoulas for over $1.5 billion. The resolution was seen as a victory for employees and customers who had been engaged in an epic boycott of the grocery chain with stores in Massachusetts, New Hampshire, and Maine.

"Effective immediately, Arthur T. Demoulas is returning to Market Basket with day-to-day operational authority of the company," Market Basket shareholders said in a statement issued around 11:15 p.m. on Wednesday. "All Associates are welcome back to work with the former management team to restore the Company back to normal operations."

At wearemarketbasket.com, an anonymous blogger declared victory: "Details are emerging as we write this but we wanted to let the world know that we have emerged from this crisis victorious! The STAKEHOLDERS have helped to Save Market Basket and in doing so, we have made history. Associates, vendors and most importantly, CUSTOMERS carried the banner for a company that is so much more than simply a company, but is rather an integral piece of every community it serves."

The post continued:

Tonight we raise a glass to Artie T and each other as we have achieved the most improbable of upsets. Tomorrow we go to work and never, in the history of people going to work, will so many people be so happy to punch the clock.

Arthur T. was was fired in June by a board of directors controlled by his cousin Arthur S. Demoulas, with whom he'd had a decades-long feud. The cousins had very different management styles. "Artie T." is seen as worker-friendly and people-focused. Forbes notes: "Arthur T.'s mantra 'we're in the people business first and the grocery business second' earned him a fervent loyalty. The company's generous pension plan means many retire with a nest egg of over $1 million, alongside above-market wages and regular bonuses. Meanwhile, cousin Arthur S. and his sisters are seen as motivated only by a desire for bigger and bigger cash dividends, the latest of which was a $300 million dividend paid out as soon as their side of the family gained control of the board last summer."

Wednesday's deal means that employees and customers got what they wanted: the reinstatement of Artie T.

In a speech Thursday morning outside company headquarters in Tewksbury, Massachusetts, Arthur T. said: "You taught everybody that ... Market Basket is a place where respect, honor, and dignity is a way of life. This was not about a family conflict or a Greek tragedy, but more about fairness, justice, and a solid moral compass that united the human soul."

Following Arthur T.'s ouster, Market Basket employees -- who are not unionized -- ran a grassroots campaign that included walk-outs, rallies, and online actions. The New York Times describes the saga as "one of the strangest labor actions in American business history," and the Boston Globe notes that these activities "stunned longtime observers of the grocery industry and captured the imagination and attention of a region."

"To have an internal uprising of just about everyone, without a union, is very unusual in American industry," David Lewin, professor of management at the University of California Los Angeles, told the Globe. "And it's even more unusual for workers to say, 'We want this guy to come back' -- and to have him actually come back."

And Market Basket customers -- who, in solidarity with employees, stopped shopping at the chain, leading to millions of dollars in losses -- deserve credit too, Massachusetts media critic Dan Kennedy wrote at Media Nation:

One quick observation about the resolution of the Market Basket standoff: This was a very rare case of a consumer boycott actually working. The reason it worked was because people truly love Market Basket and wanted to support the employees.

The workers deserve a huge amount of credit for standing up and risking their livelihoods. But if this had been just another supermarket, management would have fired them all and the public wouldn't have cared -- at least not enough to force action. In the case of Market Basket, management didn't dare fire the workers because the customers wouldn't have stood for it.

It remains to be seen what lessons from the Market Basket saga can or will be applied elsewhere. For the Boston Globe, Shirley Leung gives her take:

Business schools everywhere will hash out whether employees anywhere else can replicate what just happened here. It's doubtful -- let's be honest, if this were Bank of America or McDonald's, 25,000 people long ago would have been out of jobs and replaced with other warm bodies.

Now onto Artie T., whose reputation as a good boss took on mythic proportions. There were rallies, posters, an anthem, and catchy slogans demanding his return. He made every CEO in America feel unworthy -- and for good reason. The Good Arthur paid generously, knew employees by name, and acted like he cared about them.

He did so because it was part of the grocery chain's business model. Treat employees right, make them passionate about what they do, and watch your bottom line grow. It's what Walmart doesn't do, and what the rest of Corporate America should.