It remains to be seen whether a significant number of customers or employees boycott or walk out, like what happened in 2014, the last time Demoulas was fired from the job. Demoulas, known as “Artie T.,“ regularly walked the aisles of the supermarket chain’s 90 stores to greet employees and customers, while working to maintain low prices and a culture centered on personal service. His firing has not caused as much disruption this time around, but many fans of Demoulas were anxiously awaiting a decision from the Delaware court.
Laster’s ruling follows a trial that took place in December after the board filed a lawsuit in Delaware — where Market Basket’s holding company is incorporated — to protect its decision to fire Demoulas; Demoulas countersued, saying the board acted in bad faith.
The ruling represents a victory for Demoulas’s three sisters — Frances, Caren, and Glorianne — who together own just over 60 percent of the shares in Market Basket’s holding company. (Demoulas owns 28 percent.) They had grown increasingly concerned that they were being shut out of the decision-making, and also had a separate legal dispute with Demoulas over his management of a trust that holds shares in the company on behalf of the siblings’ children.
Over recent years, the sisters had gradually replaced allies of Demoulas on the board with new members. By the time of his termination last September, the three remaining board members were all appointed by the sisters, without Demoulas’s endorsement. (The board later appointed chief financial officer Don Mulligan as the company’s interim chief executive.)
Demoulas faced a tough challenge in court, because he had the burden of proving the board acted in bad faith by suspending and later firing him. The company’s bylaws allow the board to fire the chief executive without cause. Board chair Jay Hachigian testified at the trial the board fired Demoulas without cause, but “for good reasons.”
A spokesperson for Demoulas issued a brief statement on Monday acknowledging the “high hurdles” he faced given the latitude that Delaware courts give corporate boards, but did not indicate whether Demoulas would appeal the ruling. The spokesperson added: “As his father before him, the late Telemachus A. Demoulas, Arthur T. has devoted his entire working life to building and growing Market Basket in a way that has brought benefit to all stakeholders” — a reference to employees, customers, communities, and the company’s family shareholders.
The board issued its own statement about the decision, saying: “With this behind us, we’re looking forward to continuing to focus on everything that makes Market Basket so important to communities. As the Board has said repeatedly, the Company is not for sale.”
The board added that the chain, which generates about $8 billion in annual revenue, will continue to be family-owned and operated, offering low prices, creating good jobs for its 30,000-plus employees, and supporting customers and communities “well into the future.” The board did not comment on any next steps to replace Demoulas.
In his decision, Laster found suspending Demoulas was a reasonable action considering the walkout and boycott that financially damaged the Tewksbury-based company in 2014, when Demoulas was previously fired as chief executive. Eventually, that dispute was resolved by a deal in which Demoulas and his three sisters bought out their cousin’s side of their family, and Arthur T. Demoulas was restored to power.
The board of directors, Laster wrote, “desperately wanted to avoid a similar confrontation” and so drew up a list of governance issues and delivered it to Demoulas in August 2024. Demoulas, Laster added, “did not respond constructively.” The directors later picked up rumors that two of Demoulas’s lieutenants were preparing for another walkout and boycott, in the spring of 2025, and “rationally concluded that the CEO was getting ready for a fight,” Laster wrote.
Succession was one big issue that divided Demoulas and the board. Demoulas, now 71, wanted one of his two adult children who worked at the company to succeed him, but the board members did not like that option and were starting to entertain other alternatives.
Demoulas had tried to make the case the board railroaded him out of the company at his sisters’ bequest, as part of a long-simmering family feud, and that the board must have approved of his performance because he got a bonus as recently as 2024.
But Laster didn’t agree with those arguments. He said the directors clearly didn’t want to risk “an open war reminiscent” of the 2014 walkout, and that while Market Basket was a success under Demoulas’s leadership, Demoulas was not the only person who could manage the company effectively.
Laster found the board members did not join as a unified bloc “with a singular agenda” and instead joined over a five-year period in which they found it difficult to work with Demoulas.
The current directors, Laster wrote, “believed that the actions they took were in the best interest of the company and its stockholders. Only time will tell whether their decisions turn out well . . . but they did not act in bad faith.”
The directors, per Laster’s decision, properly concluded “that the CEO’s longstanding resistance to board oversight, imperious manner, and refusal to compromise with his sisters” posed a threat to the company.
“The CEO proved that he was a good operator and that the directors did not suspend or terminate him because of problems with the business,” Laster wrote. “That, however is not the only dimension of a CEO’s job.”
Jon Chesto can be reached at [email protected]. Follow him @jonchesto.
