In an unprecedented case, the 99% went on strike to help a 1 percenter get his job back. Good research paper topics for your business, economics or labor relations class could involve the case of the New England-based grocery store chain Demoulas Market Basket, which was paralyzed by striking workers demanding that their CEO, Arthur T. Demoulas, be reinstated. Labor unions are nervous as non-union Market Basket employees were able to accomplish their goal on their own.
Business at the 71-store Market Basket was reduced to a trickle after non-union warehouse workers, clerks, and even store managers walked off the job, picketed, and discouraged customers from shopping at the store. Fresh foods like meat, produce, and dairy were gone from shelves, and stores ran on a skeleton crew selling only nonperishables. Customers, who highly valued the store’s lower prices, boycotted in droves. Business was down 98 percent.
Family feud derails company
The reason for all this was a feud at the family-run company. Beloved CEO Arthur T. Demoulas was removed by the board of directors, led by his cousin Arthur S. Demoulas, on June 23, 2014, and replaced by outsiders. Arthur T, as he is affectionately known by employees, has a reputation for paying above minimum wage, treating workers with respect, knowing employees by name, and offering generous benefits and profit-sharing programs. So bitter was the feud that the governors of Massachusetts and New Hampshire stepped in to help resolve the issue and get back to work the 25,000 people in New England the company employs.
During its six-week shutdown, one store estimated a loss of $1.2 million a week. On August 27, 2014, the board agreed to allow Arthur T. to buy a 50.5 percent stake in the company for $1.5 billion and be reinstated as CEO. Immediately, food began to be delivered to stores and loyal customers returned, breaking sales records for the Labor Day weekend.
So why is this story so newsworthy? Rather than striking for improvement in their own jobs, the store’s employees went on strike to give a multi-million dollar CEO back his job.
Non-union vs. union
The success of the non-union Market Basket workers to achieve their astonishing goal of reinstating their CEO is making unions nervous. Unions profess to be the tool by which the downtrodden worker can petition for better wages or working conditions. Yet the Market Basket employees worked together with their managers, enlisted social media to plan rallies and protests and forced the hand of corporate management.
“This company never needed or never will need a union. We’re far stronger than that,” says Joe Schmidt, a Market Basket operations supervisor, in “In Market Basket’s Win, Did Workers Change The Game?” by Curt Nickisch, posted September 5, 2014, on NPR. Schmidt and other managers led the truckers and warehouse workers who walked off the job and brought the company to a standstill. “Just think of it: There’s no union dues or union fees. And look what has been accomplished,” Schmidt says.
State of labor unions today
Union membership has declined across the United States since the early 1980s, according to the U.S. Bureau of Labor Statistics. In 1983, more than a fifth of the nation’s workers were unionized. By 2013, the rate had fallen to 11.3 percent, according to Chris Fleisher in the article “Unions Battle to Survive,” in Pittsburgh Tribune Review, April 9, 2014. Declines in union membership are attributed to the decline in manufacturing and industry in America and damaging anti-union laws and “right-to-work” laws forbidding unions that require workers to join to keep their jobs.
Whether or not unions are still needed, the Market Basket case shows the power of solidarity among workers, confidence in teaming up with management and use of social media to disseminate news and gather workers and customers to their cause.
Market Basket affects job market report
So influential was the Market Basket strike that it affected the U.S. Department of Labor Jobs Report. In “Market Basket cited in US jobs report” posted at the Boston Globe September 5, 2014, Jack Newsham reported that after the six-week work stoppage: “The Labor Department cited the Market Basket job actions, which idled hundreds of full-time workers and as many as 20,000 part-time workers as a factor in the nation’s disappointing job growth in August. The grocery store industry had 17,000 fewer jobs in August, the Labor Department said, noting ‘employment disruptions at a grocery store chain in New England.’” The supermarket sector usually adds 6,000 jobs per month nationwide. Now that Market Basket workers are back, the downturn in the jobs report is expected to be reversed.
For more information, check out Questia’s library on Labor and Work.
Do you think labor unions still have a place in today’s business world?