Saturday, Aug 30, 2014, 2:50 pm
At Market Basket, the Benevolent Boss Is Back. Should We Cheer?
Lots of executives may claim to think of their employees as family. But it’s the rare boss who actually treats his workers as well as his blood relatives. The 25,000 employees of Market Basket, a chain of 71 New England grocery stores, see company president Arthur T. Demoulas as that boss. At least, that’s the story one gets from the press coverage of the bitter power struggle and chain-wide strike that has been frontpage news in New England all summer.
Ousted in June, Demoulas regained control of the company this week in what’s being hailed as a victory for workers. But is it?
Since 2008, Demoulas has presided over the chain, which is known for its low prices, exemplary treatment of employees, and, as the Boston Globe put it recently, “one of the longest, costliest, and nastiest court battles in [Massachusetts] legal history.”
The feud was between two Greek-American cousins, both named Arthur, and both jostling to occupy the company throne. The chain was founded in 1916 by a Greek immigrant couple, Arthur and Efrasine Demoulas, who later sold the company to two of their sons. Those sons are the fathers of the two Arthurs. Arthur S. sued Arthur T.’s father in 1990 for allegedly defrauding his side of the family of their shares in the company. After years of litigation, a judge granted 50.5 percent ownership of the company to Arthur S.’s side of the family. However, Arthur T. and his father maintained direct control of the company for years, in part thanks to a shareholder on Arthur S.’s side of the family who voted with Arthur T. in a 2008 Board of Directors vote.
Yet despite this controversial history with his flesh-and-blood family, Arthur T. Demoulas is known as the consummate “family man” for his employees. According to press reports, full-time clerks at Market Basket start at $12 per hour, and benefits include generous retirement plan contributions and health insurance. All workers, including part-timers, receive bonuses four times a year. In an industry known for high worker turnover, the company has a reputation providing workers with decades-long careers, thanks to a company culture of promoting from within that employees attribute to Arthur T.
Such treatment has led workers at Market Basket to refer to Demoulas as “Artie T.” and speak of him with incredible affection. The website We Are Market Basket contains dozens of testimonials from Market Basket employees about the wisdom and kindness of their boss. Many, such as Susan Turgeon, a bakery manager, mention his visits to the stores.
“I feel great when Artie T. comes into our store,” she writes in a testimonial. ”He doesn’t forget to talk to anyone whether it be management, full time, part time, cashiers or baggers. He cares about us all and it is so obvious when you talk to him.”
Others reference the extraordinary attention Demoulas pays to workers’ families and personal lives. Michael Desmond, an assistant store director, recounts Demoulas attending his father’s funeral: “I was in shock that this man took time out of his busy life to comfort my family during this difficult time. He not only payed [sic] his respects but stayed and talked with every member of my family, aunts, uncles, brothers, sisters, my children, grandkids. … That kind gesture showed me what a great man I am working for.”
This degree of loyalty between CEO and worker sparked a very unusual strike at Market Basket—one in which management was instrumental. After Arthur S. Demoulas replaced Arthur T. with two executives from outside the company on June 23, under the order of Market Basket’s Board of Directors, protests erupted among store managers and other employees, united by a single demand: to bring Arthur T. Demoulas back. On July 18, angry workers took the action to the next level, holding a large rally outside the company’s main office in Tewksbury, Massachusetts.
Market Basket’s new leadership responded to the employee unrest by firing the eight veteran managers—several with many decades of service for the company—who organized the pushback. But the firings did nothing to quell the uprising. Instead, the workers went on strike. Retail workers formed picket lines, warehouse and distribution workers stopped making deliveries, and outside supporters issued a widespread request for customers to boycott the chain.
The industrial action gutted the business, costing it tens of millions of dollars over the course of six weeks. The new executives cut to zero the hours of all part-time employees on August 7, leaving the stores with skeletal staffs and freeing up part-timers to walk the picket lines, too. Despite August 12 threats of firing managers and full-time workers from the new executives—which prompted an employee to file an August 26 unfair labor practice charges with the National Labor Relations Board—protests and pickets continued uninterrupted. The governors of Massachusetts and New Hampshire got involved in trying to broker a sale of Arthur S.’s majority to Arthur T.—a $1.5 billion deal that was finally announced Wednesday, August 29.
“Effective immediately, Arthur T. Demoulas is returning to Market Basket with day-to-day operational authority of the company,” read a statement from Demoulas and the shareholders of Market Basket released that evening. “He and his management team will return to Market Basket during the interim period while the transaction to purchase the Company is completed. … All Associates are welcome back to work with the former management team to restore the Company back to normal operations.”
A victory, but for whom?
At a time when protracted strikes are increasingly rare at unionized workplaces, let alone non-union companies like Market Basket, the store action drew national attention as an unusually successful and militant work stoppage. A customer petition in support of the workers’ demands garnered nearly 30,000 signatures, and a crowd-sourced fund to support striking warehouse workers and truck drivers raised more than $100,000.
Left-wing media outlets were particularly captivated by the strike. In Labor Notes, retired organizing director of the ILWU Peter Olney writes, “It is refreshing to see a real S-T-R-I-K-E in retail that paralyses commerce with the support of the customer community,” and says that this strike “looks like a strike should.” At Jacobin, Michael Lee-Murphy praises Market Basket workers for their militancy: “Workers here have taken the kind of militant action that unions shy away from. This is what unionism at its best can look like.”
Former Labor Secretary Robert Reich, furthermore, lauded Arthur T. Demoulas for promoting a kinder, gentler business model that he calls “stakeholder capitalism.” Even Esquire has called Market Basket “The Last Stand for the Middle Class.”
The media has almost uniformly declared the outcome a happy ending for workers. US News and World Report cheered that “Labor Day celebrations came early” for Market Basket workers, and Fortune deemed Market Basket “the biggest labor story of the year.”
The voice of the resistance to Arthur S. Demoulas’ takeover—in other words, the employees behind the We Are Market Basket website, who appear to be the main online mouthpiece for directing the strike campaign—declared victory on the website on Wednesday. “Details are emerging as we write this, but we wanted to let the world know that we have emerged from this crisis victorious! ... 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.” (WAMB did not respond to numerous In These Times requests for an interview.)
It’s not obvious, however, how happy an ending is in store for the vast majority of Market Basket’s employees.
Despite Market Basket’s reputation as a sterling employer, Market Basket’s part-time employees—who make up about 80 percent of chain’s workforce—have much less favorable working conditions than the full-time workers. According to the Boston Globe, those part-timers earn about $8 to $10 an hour, significantly less than the oft-cited $12 hourly starting wage for full-timers. And while the part-time workers receive bonuses, and those who work at least 1,000 hours a year are eligible for a profit-sharing program, they don’t get Market Basket’s vaunted health insurance and retirement benefits. Those conditions make Market Basket look less like an exception and more like the rule in an industry dominated by non-union retailers such as Walmart and Target, both of which compete with traditional grocery stores.
It’s unclear whether the sale to Arthur T. will allow the company to maintain even these standards, however. According to The Guardian, Arthur T. financed his acquisition of the company with $550 million from private equity giant the Blackstone Group. Industry analysts told the Boston Herald that the new creditors will expect “immediate returns,” which may force changes to Market Basket’s business model. That could mean raising prices, but it could also mean lowering costs through various cuts to payroll.
A recent class-action lawsuit filed in Massachusetts also alleges that Market Basket violated state labor law by locking in restockers and cleaners during the overnight shift while the stores are closed. Massachusetts law requires that workers either be allowed to leave the premises for an unpaid lunch break or be paid for their time. Former employee Daniel Sheridan, one of the plaintiffs in the case, told the Boston Globe, “Yeah, they’re good to their employees, but they’re stealing from their employees.”
The discrepancy between Market Basket’s squeaky-clean reputation as an employer and the experience of workers like Sheridan calls into question the true value of a “benevolent” boss like Arthur T. Demoulas. Looking closer at much of the glowing press about Demoulas’ management style reveals that many of his most vocal supporters are managers, even senior management. The testimonials at We are Market Basket come almost entirely from management.
According to Dennis Desmond, a part-time night cleaner at Market Basket Store 48 in Haverhill—whose hours, like those of all the part-time workers, were cut to zero during the strike—management helped coordinate the action. “At my facility, and at the [New Hampshire] facility, employees were paid [by management] to hold protest signs,” he told In These Times in an email.
Is a strike really a strike if the rank and file is told not to work by their direct supervisors? And will this strike benefit the part-time workers who make up the majority of the workforce, or just the already well-paid managers who appeared to be leading the charge?
These questions—as-yet unanswered by the media and the campaign’s most vocal employee representatives—are why it’s important for observers on the Left to take care when referring to Market Basket “workers.” Normally, when progressives discuss labor disputes, those in charge are clearly labeled as management. In the case of Market Basket, managers’ decision to take industrial action has led the media to recast them as “workers,” although they still wield power over rank-and-file workers and enjoy significantly higher compensation and benefits. And while laid-off managers and full-timers immediately got their jobs back from Arthur T., part-timers received no assurance that their hours would be fully restored.
The obvious counterbalance to managers who may or may not have the workers’ best interests at heart is a union. In New England, workers at Market Basket rivals like Stop and Shop and Shaws are unionized under the United Food and Commercial Workers (UFCW). When the Market Basket protests began, UFCW issued a statement in support of the workers, saying: “Market Basket workers have an unassailable right to engage in collective action in defense of their benefits and working conditions. These workers deserve a guarantee that their livelihoods will not be jeopardized by a change in management.”
UFCW also set up a website with basic information for Market Basket workers about their legal rights, and encouraged workers to get in touch with the union. According to UFCW spokeswoman Moira Bulloch, unionized Stop and Shop workers attended Market Basket rallies and performed outreach to workers.
“Hundreds of Market Basket workers have reached out to us through our local offices, our websites, and through social media,” says Bulloch. “We have been listening to their concerns, and helping workers weigh their options going forward.”
Bulloch is non-committal about whether the UFCW will launch a campaign to organize Market Basket, but she does stress the benefits of a potential contract for Market Basket workers.
“Even if Arthur T. is reinstated as CEO, even if he rehires all of the managers who have been replaced, and restores the company, it will only last as long as Arthur T. remains with the company,” she points out. “When he retires, Market Basket will be back on the auction block, or parceled out amongst the heirs. The only way that workers can preserve their Market Basket and their jobs is to secure a union contract.”
The UFCW is not planning to disappear now that Arthur T. is back. On Wednesday, amid reports that the sale was imminent, Bulloch stated: “The UFCW will continue talking to any workers who are interested in bargaining to gain more meaningful assurances from Market Basket that their families will not suffer through another lay-off because of a future family feud.”
Getting Market Basket’s 20,000 part-time workers to organize, however, will be a tall order. Desmond, who has only worked for Market Basket for a year but has family members who also work for the company, recognizes the benefits of unionization. He was formerly a member of AFSCME, and his father was a member of the IBEW. But at Market Basket, he says, things are different.
“There’s never been any talk about having a union. We’ve never had to talk about it because our boss treats us like gold,” he says. “We have all the benefits of a union without a union.”
That’s an attitude the now-reinstated leaders of the Market Basket protest seem to share. In an interview with WGBH, Tom Gordon, one of the eight protesters whose firings touched off the strike, said, “Don’t want any part of a union. We don’t need a union.” Gordon is a member of management.
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Julia Carrie Wong is a freelance journalist living in San Francisco. You can follow her on Twitter @juliacarriew or email her at julia.carrie.wong [at] gmail.com.
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