Market Basket board fires two suspended executives, CEO Arthur T. Demoulas calls move "heartless"
Joseph Schmidt, director of operations, and Tom Gordon, grocery director, were both fired Tuesday in the latest chapter in the struggle for power of the popular supermarket chain.
Demoulas, two of his children, Schmidt, Gordon and a third executive were all suspended and put on paid leave back on May 28. The board said Schmidt and Gordon were suspended for allegedly "encouraging a widespread work disruption" to show support for Demoulas.
Demoulas and the board of directors are in a dispute over his role with Market Basket and who will control the company.
In a statement Tuesday, the board said the two executives were fired for "insubordination, making false and derogatory remarks about the company and people associated with it, and inappropriate communications with colleagues."
"The investigation uncovered evidence that Schmidt and Gordon, following their suspensions, both directly encouraged employees to slow down and disrupt operations at Market Basket, including by telling them to defy their supervisors," the board said Tuesday.
"Despite warnings to stop pressuring Market Basket associates to join his side, Schmidt continued to defy instructions to avoid communicating with employees while under suspension."
The board also said Schmidt "reportedly told colleagues - falsely - that if Demoulas were removed as CEO they would lose their bonuses and profit sharing."
After they were suspended, Gordon and Schmidt went to two Market Basket stores in New Hampshire in "defiance of instructions to stay off Market Basket premises during the investigation," the board said.
Demoulas ripped the board for firing the veteran executives, saying they were "easily cast aside." Gordon had been with Market Basket for 50 years, Schmidt for 39 years.
"They are just collateral damage in this pre-planned coup. To Market Basket, Tom and Joe are part of the heart and soul of the company and key executives in its immense success to date," Demoulas said.
"In addition to being men of strong character, these are two of the brightest and best grocery store operators in the business, and their extraordinary work has been key to building this company and its culture. This is among the worst decisions that could be made by this board."
Demoulas is the CEO, but he's a minority shareholder in Market Basket. He owns 28 percent of the company. His three sisters each have a 20-percent share. The other 12-percent is in a trust for the family's grandchildren.
Demoulas said Schmidt and Gordon "belong on the Market Basket team."
"We will use all efforts to reverse this heartless and unwarranted decision," he said.
Schmidt and Gordon will hold a news conference near the Market Basket on General Way in Reading at 10:30 a.m. Wednesday to discuss their terminations.
"Before the investigation was even into its first week, Mr. Schmidt and Mr. Gordon initiated a media campaign to disparage the company, the Board of Directors and the owners and pressured associates - effectively doing in full sight what the Board of Directors suspected before their suspension. They had to know that their behavior (after multiple warnings) would lead to this result," the board said.
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