Bowlero CEO Tom Shannon on Wednesday called discrimination claims against the fast-growing bowling alley operator “absurd,” but acknowledged that the federal investigation into those allegations may have hurt its stock price.
“These allegations are downright 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 proposed in January to settle its extensive age discrimination investigation and retaliation claims against Bowlero for $60 million, CNBC reported last month. Talks about the settlement failed in April and the case is being referred to the EEOC’s general counsel “for possible enforcement action,” according to a letter sent by the agency.
Shannon said on Wednesday he didn’t think any action against Bowlero, the world’s largest owner and operator of bowling alleys, would be “in any way of concern to the company.” But he acknowledged the research could have contributed to the recent battle over the company’s stock, which fell more than 7% over the past month, largely due to the company’s disappointing commentary about foot traffic during its earnings call last month. .
“Could be [the investigation] drive the stock down?” Cramer asked Shannon Wednesday.
“I mean, I think,” he said.
“Look, we’ve never been hit with a lawsuit. We’ve never been hit with anything, you know, in terms of evidence finding or anything like that,” Shannon added.
Bowlmor AMF President and CEO Tom Shannon attends Shay Mitchell as the host of 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 includes claims from at least 73 former employees who claim they were fired based on their age or in retaliation. company returns with the Securities and Exchange Commission show.
The agency’s proposed settlement is not public. It was revealed to CNBC by attorney Daniel Dowe, who represents more than 70 former employees who have filed claims against Bowlero with the EEOC.
Asked by Cramer whether the EEOC released the settlement information, Shannon said he believed the plaintiffs’ attorney put the information there “along with an accomplice journalist” on CNBC.com.
CNBC said it stands behind coverage of Bowlero.
“Our story about Bowlero went through a rigorous review process,” a CNBC spokesperson said in a statement.