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 could have hurt its stock price.
“These allegations are frankly absurd. They do not pass the sniff test. They do not 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 motion,” a letter sent by the agency shows.
Shannon said Wednesday that he didn’t think any potential motion taken against Bowlero, the world’s largest owner and operator of bowling alleys, would “be material to the corporate in any way.” But he acknowledged the probe could have contributed to recent struggles for the corporate’s stock, which has dropped greater than 7% within the last month, driven largely by the corporate’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 now have never been hit by a lawsuit. We now have never been hit with anything, , when it comes to evidentiary findings or anything like that,” Shannon added.
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 claims from at the 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 will not be public. It was revealed to CNBC by lawyer Daniel Dowe, who represents greater 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 data on the market “together 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 an announcement.