When a private dispute goes public

The cases of Market Basket and Hachette.

By — on / Dispute Resolution

This past June, a long-standing family feud erupted in public when Arthur S. Demoulas, an owner of the New England low-price grocery chain Market Basket, fired his cousin Arthur T. Demoulas, also an owner, from his position as the company’s CEO. Many of the company’s 25,000 employees, who had received good wages, bonuses, and profit sharing under Arthur T., began protesting the ouster, and customers soon showed their support with a boycott. As the protests dragged on for weeks, Market Basket shelves emptied, and the company started losing millions of dollars. Among some of his supporters, Arthur T. was elevated to folk-hero status.

On August 27, at the prodding of the governors of Massachusetts and New Hampshire, independent directors from the chain’s board were able to mediate a resolution between the family’s two warring factions. Arthur S. and his allies agreed to have Arthur T. reinstated as CEO and to sell their 50.5% stake in the company to him and his allies for $1.6 billion.

To many, it was an inspiring story of employees and customers taking a stand against a perceived injustice. To others, this version of the dispute was just a facade. In a September Forbes magazine exposé, Hollie Slade reports that the employee uprising was not spontaneous but “orchestrated from the top.” Employees who contributed $500 to fund the campaign to reinstate Arthur T. were reimbursed via a bonus, according to Slade. Forbes also portrayed Arthur T.’s ouster not as a power grab but as a responsible reaction to a CEO who habitually concealed financial information, rejected oversight of his decisions, and spent company money improperly.

Writing in protest
Whether the movement to bring back the company’s popular leader was calculated or spontaneous, misguided or on the mark, the saga serves as an illustration—cautionary or motivational, depending on your perspective—of what can happen when a private dispute goes public.

A similar story is unfolding in the book world, where authors have begun to organize against Amazon in its dispute with publisher Hachette Book Group. In reaction to Hachette’s refusal to accept lower prices for e-books and make other concessions, Amazon has penalized Hachette and its authors, taking measures to decrease their sales by slowing down the delivery times of Hachette books and selling them at list price, for example.

Hundreds of writers, including literary lions such as Philip Roth and Salman Rushdie, have joined Authors United,
a coalition that has taken out media ads condemning Amazon’s actions. Authors United has a bigger goal: It plans to pressure the Department of Justice to investigate the online retailer for antitrust violations.

Leveraging public opinion
When a dispute seems irreconcilable, the temptation to battle it out in the court of public opinion can be strong. But it would be a mistake to do so before exhausting your full range of dispute-resolution options. In many cases, a good mediator should be able to help you and your counterpart overcome your entrenched positions, see each other’s point of view more clearly, and come to agreement.

What if your counterpart still refuses to cooperate? Taking your dispute public may start to seem like your best option, but be aware that doing so could escalate the dispute in unforeseen ways. Your partner might retaliate by making embarrassing public accusations against you or suing you, for example.

If going public still seems like the best option, you can take steps to increase the odds that the public phase of your dispute will be a short one. First, warn the other side of your intentions, as the mere threat of a public backlash could motivate her to back down.

Second, organize your campaign, and be prepared to clearly explain your principles and goals to the public. Market Basket workers (perhaps supported by Arthur T. and his allies) relied on both traditional media and social media to foment their customers’ moral outrage—and it worked. Authors United, by contrast, has been less effective at generating widespread public condemnation of Amazon’s tactics.

Third, if negotiations continue or resume, try to keep them private, lest you further escalate the dispute, and keep striving to meet the other party’s interests behind closed doors. Finally, if you do reach a settlement, attempt to put the incident behind you as quickly as possible by making a joint statement that emphasizes your shared intention to move forward.

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