Bowlero CEO Tom Shannon on Wednesday dismissed the discrimination claims against the rapidly expanding bowling alley operator as “absurd,” while acknowledging that the ongoing federal investigation might have adversely affected the company’s stock price.
Speaking on CNBC’s “Mad Money with Jim Cramer,” Shannon stated, “These allegations are frankly ridiculous. They lack credibility and common sense.”
In January, the U.S. Equal Employment Opportunity Commission (EEOC) proposed a settlement of $60 million to resolve allegations of age discrimination and retaliation against Bowlero, as reported by CNBC last month. However, negotiations for the settlement fell through in April. According to a letter from the EEOC, the case will now be referred to the agency’s general counsel for potential enforcement action.
While Shannon believes that any potential action against Bowlero, which currently holds the title of the world’s largest owner and operator of bowling alleys, will not significantly impact the company, he acknowledged that the investigation may have contributed to the recent decline in the company’s stock, which has experienced a drop of over 7% in the past month due to disappointing foot traffic results discussed during the last earnings call.
When asked by Cramer whether the investigation was affecting the stock value, Shannon replied, “I suppose it could be.”
He continued, “Look, we have never faced a lawsuit or any significant findings in terms of evidence against us,” emphasizing Bowlero’s clean track record.
President and CEO of Bowlmor AMF Tom Shannon attends Shay Mitchell hosts the Grand Opening of Bowlero Playa Del Rey on May 25, 2016, in Playa del Rey, California.
Jerod Harris | Getty Images
The EEOC investigation into Bowlero involves allegations from at least 73 former employees who claim they were terminated based on age discrimination or retaliation, as indicated in company filings with the Securities and Exchange Commission.
The details of the proposed settlement remain undisclosed, but lawyer Daniel Dowe, representing over 70 former employees with claims against Bowlero, revealed the information to CNBC.
When questioned by Cramer about the release of the settlement information, Shannon suggested that the complainants’ attorney and a reporter at CNBC.com were responsible for making it public. CNBC stands by its reporting on Bowlero.
“Our story about Bowlero underwent a rigorous review process,” stated a CNBC spokesperson.
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