Market Basket request for restraining order against 2 fired executives approved by judge
A judge approved a restraining order against fired Market Basket executives Tom Gordon and Joseph Schmidt Thursday amid the latest struggle for control of the popular grocery store chain.
The judge at Middlesex County Superior Court in Lowell ruled in the civil trespassing case that Gordon and Schmidt violated warnings more than 25 times, causing irreparable harm to the company.
Schmidt, the former director of operations, and Gordon, a former grocery director, were both fired on July 22 by Market Basket, which is based in Tewksbury, Massachusetts. They are now officially banned from setting foot on any Market Basket property. There are nearly 100 Market Basket stores around New England.
The company had previously suspended them along with CEO Arthur T. Demoulas, back in May, accusing the executives of "encouraging a widespread work disruption" to show support for Demoulas. Demoulas, Gordon and Schmidt have denied that.
Market Basket restraining order approved
In court Thursday, an attorney for Market Basket said Gordon and Schmidt received multiple warnings to stay off of company property, including written letters. Still, the fired executives visited 25 stores over six days between August 4 and August 9.
On August 7, Schmidt went to Market Basket headquarters in Tewksbury. The attorney for Market Basket said Schmidt has a master key to open every office in the building.
Schmidt's attorney said he was there to return his company car, and he spent several minutes talking to employees who he knew and were happy to see him. The judge later noted that when Schmidt left the car, he did so with several photographs of Demoulas on the windshield.
"It's a clear message," the judge said.
Attorneys for Schmidt and Gordon unsuccessfully tried to argue that they were invited to come into the stores by senior employees. But the judge agreed with Market Basket's attorney, who said those employees did not have authority to overrule the company.
"Is it the cheap prices?"
During a lighthearted exchange with the attorney for Schmidt and Gordon, the judge asked them what irreparable harm they would suffer if the restraining order was granted.
"What's the irreparable harm to your client, who no longer works for Demoulas, no longer has any business dealings involving that business? What's the irreparable harm to your client if they're not allowed to go on Demoulas property? Is it the cheap prices?" the judge asked, prompting a laugh from the executives' attorney.
Gordon and Schmidt's attorney argued that they would suffer reputational harm because people would think they committed a crime. The judge disagreed, and said he would make it clear that this was a civil trespassing case, not a criminal one.
After hearing from both sides, the judge said it was "clear and unequivocal" that Gordon and Schmidt "knew they're not supposed to be [on Market Basket property]," but they still went inside the stores.
Steve Collins, the Market Basket board director, issued a statement shortly after the judge announced his decision.
"We're pleased that the Court today issued an injunction against terminated employees Joe Schmidt and Tom Gordon," the statement said in part. "The effect of the Court's injunction is to put a stop to these individuals' ongoing unlawful behavior and order them to stay away from Market Basket's stores and offices."
Who is Arthur T. Demoulas?
A spokesperson for Arthur T. Demoulas released a statement after the hearing as well, saying they were "surprised" by the decision.
"Tom Gordon and Joe Schmidt have dedicated their entire professional careers to Market Basket and have been key to its success and building its culture. They have fostered the community of associates that is the Market Basket family," the statement said. "Since May 28, their integrity has been attacked with a host of false accusations but they have persevered with dignity and integrity. Intent matters: once they were fired, they believed they were able to visit the stores and did so not to threaten and intimidate, but to check on people and provide reassurance that things will be OK. We will respect this ruling but are saddened that it is built on misconceptions about their intent."
Demoulas and the board of directors are scheduled to take their dispute over control of Market Basket to a mediator on September 3.
Demoulas is the CEO, but he's a minority shareholder. He owns 28% of the company, while three of his sisters each own a 20% share and the remaining 12% is in a trust for the family's grandchildren.
In 2014, there was a similar struggle for control of the company. That dispute led to a customer boycott with Market Basket workers walking off the job in solidarity of the man they refer to as "Artie T." Six weeks later, Demoulas and his sisters were victorious in the standoff.
