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Market Basket News – The Legal Battle

Posted by Stephen McDonough | Aug 27, 2014 | 0 Comments

Market Basket news dominated Massachusetts headlines in 2014.   It also provides a magnificent example of how NOT to resolve a business dispute.

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A long-lasting clash in the public’s eye is not a good thing for any business.

A boardroom battle was transformed into a public spectacle with employees and vendors going on strike in support of Market Basket's recently terminated President, Arthur T. DeMoulas. The loud, public demand to restore Arthur T. to his post has threatened the existence of a successful and respected super market business built up by the DeMoulas family over the past several decades. A lot of hard work and potential future profits are now at risk due to the uncontrolled reaction to Arthur T's firing.

As Market Basket has learned this summer, having a business dispute fought by stake holders in the view of the public and media creates problems that transcend those usually experienced in the shelter of the board room or even the court room. With the benefit of hindsight, the directors and shareholders of Market Basket might have considered mediating their disputes as mediation would have provided a shield of confidentiality and control over the timing of any changes.

When two or more people go into business together, conflict is inevitable, especially in a family- run business that supports numerous family members. When core conflicts arise,  the business is at risk unless the dispute is managed or resolved in a way that preserves the opportunity to continue the business. Business partners often engage in high risk, expensive conflict resolution methods (terminations, lawyers, courts, obstruction tactics, e.g.) in an effort to gain control over the business without considering the risks that such actions might invite publicity or uncomfortable disclosure.

Mediation is a conflict resolution process that affords the parties an opportunity to address any issues, without fear of disclosure and without limit as to scope or imposed judgment. Mediation is entirely confidential and, with certain very limited exceptions, a mediator cannot be compelled to testify regarding any statements made by any of the parties during mediation.

Business is fundamentally about winning. Partners will never agree on any major business decision unless they believe it leads to some form of a win. Businesses have to understand, especially in the age of social media, that part of winning is controlling the impact of a dispute on your business' brand and reputation. A conflict resolution that leaves the business exposed to substantial negative publicity is not a win.

In fact, as we just saw in the Market Basket case, ignoring these factors can lead to unforeseen and damaging outcomes.

Before your business is irrevocably damaged by a dispute, consider mediation as a method to constructing a solution which preserves opportunities to keep disputes private and avoid negative public disclosures and reactions.

About the Author

Stephen McDonough

Stephen works closely with clients facing divorce or other family conflict. He is a certified mediator through the Massachusetts Council on Family Mediation, a designation that only about 11% of mediators have obtained. In addition to providing mediation services, Stephen regularly appears in...

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