Market Basket's board of directors said it fired two executives for insubordination, making false and derogatory remarks about the company and people associated with it, and inappropriate communications with colleagues. The termination of Joseph Schmidt, director of operations, and Thomas Gordon, grocery director, comes almost two months after the two men — along with CEO Arthur T. Demoulas and other employees — were placed on paid administrative leave May 28 while an investigation was conducted into the CEO’s conduct.

The investigation includes a review of allegations that Demoulas began to plan a disruption of the business and operations of Market Basket with a work stoppage. The company's executive committee claimed this would be in retaliation for the its directives requiring corporate oversight of the CEO.

Allegations that Schmidt and Gordon were encouraging a widespread work disruption were a basis for their suspensions. Such a disruption would echo the employee walkout and vendor and customer boycott of 2014 on behalf of Demoulas, the CEO who had been fired by the previous owner of the company, his cousin Arthur S. Demoulas. That disruption cost the company over a half billion dollars ended when Demoulas and his sisters bought the company. 

The board said its investigation yielded evidence that Schmidt and Gordon were planning a work disruption to show support for the suspended CEO.

The board said, among other things, the investigation uncovered evidence that Schmidt and Gordon, following their suspensions, both directly encouraged employees to slow down and disrupt operations at Market Basket, including by telling them to defy their supervisors.

Despite warnings to stop pressuring Market Basket associates to join his side, the board said Schmidt continued to defy instructions to avoid communicating with employees while under suspension. Associates told investigators they interpreted remarks by Gordon to suggest that they should rally around Demoulas by planning a work disruption. 

"The board of directors suspended with pay Schmidt and Gordon in order to conduct an investigation into credible allegations of improper conduct," the company said in a statement. "Before the investigation was even into its first week, Mr. Schmidt and Mr. Gordon initiated a media campaign to disparage the company, the board of directors and the owners and pressured associates — effectively doing in full sight what the board of directors suspected before their suspension. They had to know that their behavior (after multiple warnings) would lead to this result."