Board Files Suit to Uphold CEO Arthur T. Demoulas’s Firing at Market Basket

Subhead: Market Basket’s board seeks court validation of unanimous vote to remove Demoulas amid accusations of “authoritarian regime” and coup allegations.

Lead: Market Basket’s board of directors filed a lawsuit on Sept. 11 in Delaware’s Court of Chancery to affirm its unanimous decision to terminate President and CEO Arthur T. Demoulas following failed mediation over alleged threats of a work stoppage and succession disputes.

Nut Graf: The legal action underscores deep rifts within the family-owned grocery chain and explains the board’s rationale for removing its longtime, employee-beloved leader. By seeking judicial backing, the board aims to cement its authority and prevent further operational disruptions.

Board’s Vote and Lawsuit Late Sept. 10, board members voted unanimously to oust Demoulas, alleging he wielded unchecked control-described in the lawsuit as an “authoritarian regime”-and plotted to derail the company with another stoppage after his paid leave in May. The complaint claims Demoulas refused to share budgets, blocked board access to senior staff, and insisted on naming his children as successors without oversight.

Demoulas’ Reaction Dubbed “Artie T” by employees, Demoulas decried the move as “a farcical cover-up for a coup,” asserting the board violated company bylaws by firing him without a fair hearing. His spokesperson, Justine Griffin, called the six-month investigation and mediation process a pretext to strip him of power.

Potential Impact on Culture and Operations Market Basket, with 90 stores and nearly $8 billion in annual revenue, flourished under Demoulas’s tenure, famed for profit-sharing and low prices. The 2014 ouster led to strikes and boycotts until his reinstatement via a $1.6 billion buyout. Observers warn renewed family conflict could prompt similar employee and customer backlash, jeopardizing the chain’s signature culture. Board Chair Jay K. Hachigian, however, assures associates and shoppers that operations, bonuses, and culture will remain unchanged.