Bowlero CEO Tom Shannon on Wednesday called discrimination claims against the fast-growing bowling alley operator “absurd,” but acknowledged the federal probe into those allegations may have hurt its stock price.
“These allegations are frankly absurd. They don’t pass the sniff test. They don’t pass any common sense,” Shannon told CNBC’s “Mad Money with Jim Cramer.”
The U.S. Equal Employment Opportunity Commission in January proposed to settle its sprawling investigation into age discrimination and retaliation claims against Bowlero for $60 million, CNBC reported last month. Talks over the settlement failed in April, and the case is being referred to the EEOC’s general counsel “for potential enforcement action,” a letter sent by the agency shows.
Shannon said Wednesday that he did not think any potential action taken against Bowlero, the world’s largest owner and operator of bowling alleys, would “be material to the company in any way.” But he acknowledged the probe could have contributed to recent struggles for the company’s stock, which has dropped more than 7% in the last month, driven largely by the company’s disappointing commentary about foot traffic during its earnings call last month.
“Could [the investigation] be driving the stock down?” Cramer asked Shannon on Wednesday.
“I mean, I suppose,” he said.
“Look, we have never been hit by a lawsuit. We have never been hit with anything, you know, in terms of evidentiary findings or anything like that,” Shannon added.
The EEOC investigation into Bowlero involves claims from at least 73 former employees who allege they were fired based on their age or out of retaliation, company filings with the Securities and Exchange Commission show.
The agency’s proposed settlement is not public. It was revealed to CNBC by lawyer Daniel Dowe, who represents more than 70 former employees who made claims against Bowlero to the EEOC.
Asked by Cramer about whether the EEOC released the settlement information, Shannon said he thought the complainants’ attorney put the information out there “along with a complicit journalist” at CNBC.com.
CNBC said it stands by the reporting on Bowlero.
“Our story about Bowlero went through a rigorous review process,” a CNBC spokesperson said in a statement.