Dozens of former employees said they were fired from throw a handball Attorneys representing the claimants said Monday it relied on their age or retaliation plans to sue the bowling chain after the U.S. Equal Employment Opportunity Commission ended its case against the company. ty.
Bowlero, the world’s largest owner and operator of bowling centers, has embroiled in an EEOC investigation since 2016 involving more than 70 former employees who claimed they were illegally fired, the company previously disclosed in securities filings.
In their complaint to the EEOC, they alleged that Bowlero fired them for being obsolete as they worked to convert hundreds of their locations from what the company called “ugly” bowling alleys to upscale experience with premium food and beverage offerings, CNBC previously reported. Bowlero denies the claims.
The company, which went public in late 2021 through a special purpose acquisition company, is one of the winning stock picks to emerge from the SPAC boom. It owns two of the largest brands in bowling – AMF and Lucky Strike – and operated more than 300 bowling centers across North America as of July, which is the most recent data available. From 2021 to 2023, Bowlero nearly tripled its annual revenue, from $395 million to $1.06 billion, according to company filings. As of Monday’s close, Bowlero’s stock was down about 21% year-to-date.
On Monday, Bowlero disclosed in its fiscal third-quarter earnings release and quarterly securities filing that the EEOC had closed the case and would not pursue further litigation.
“The Company has received a positive update on the status of pending age discrimination complaints with the EEOC… EEOC has issued a Notice of Closure for Individual Age Discrimination Allegations were filed with the EEOC, in most cases, many years ago,” Bowlero said in his press release. “The notices, of course, give the complainant the right to bring an individual action.”
Bowlero noted that it received a letter from the EEOC indicating the agency had decided not to sue the company. In one of the letters, the agency said the closure of the case did not clear the company of wrongdoing.
“By terminating this case, the Commission does not certify that [Bowlero] are complying. In addition, our termination of the investigation does not affect the right of any victim to file a private action or the Commission’s right to subsequently sue or to subsequently intervene in a separate civil action. fourth,” the EEOC letter sent Friday said.
During the company’s earnings call with Wall Street analysts the following Monday, executives said that the EEOC investigation was now over and would no longer be a distraction.
“For more than eight and a half years, the company has vigorously denied and contested the false allegations against it,” CEO Thomas Shannon said in his opening remarks. “We are pleased to report these very positive developments on behalf of our shareholders.”
When asked later about the financial impact of the EEOC investigation, chief financial officer Robert Lavan said “there were several million dollars” that flowed to the income statement, but “more importantly, it was a distraction”.
“So we are happy to focus 100% on our business and get this behind us,” Lavan said.
However, Daniel Dowe, a lawyer representing dozens of plaintiffs, said the case is not over and will now take on a different form.
He told CNBC that the EEOC’s decision allows former employees to continue suing on their own, and that Dowe is expected to file a single lawsuit on behalf of more than 70 former employees. Dowe plans to seek monetary damages related to the incident.
The EEOC previously found probable cause in 58 of the complaints against Bowlero, and the rest remained under investigation as the agency closed the case, according to Bowlero and Dowe’s securities filings. Employees who still have pending cases with the EEOC also have the right to sue and are among the potential plaintiffs Dowe is representing, he said.
The company disclosed in the filing that the EEOC’s investigation also led to a probable cause determination that Bowlero engaged in a “pattern or conduct” — a term that indicates systemic problems – about age discrimination since at least 2013, which Bowlero also denies . Bowlero said the EEOC’s investigation into its pattern or practices has also been closed.
When the EEOC finds probable cause in a complaint, it means it believes that discrimination occurs. The agency typically makes that decision in only a small fraction of cases each year, EEOC data shows.
Under EEOC procedures, when the agency finds that discrimination has occurred, it will proceed to resolve the situation between the employer and the victim, the agency explains on its website . If the parties cannot come to a resolution, the EEOC must decide whether to sue the employer – a matter on which EEOC commissioners need to vote.
“Because of limited resources, we are unable to litigate in every case where discrimination is found,” EEOC explains on its website.
The EEOC attempted to settle the claims with Bowlero for $60 million in January 2023, but those efforts failed last April, CNBC previously reported.
It’s unclear whether the question of whether to sue Bowlero was put to a vote by EEOC commissioners. The EEOC declined to comment because most of its processes are confidential under federal law.
Dowe said he asked the agency to close the case last month so his clients could move forward with their own lawsuit. He added that he was “delighted” that the matter was now ready for private action.
“The investigations were thorough and in-depth and resulted in 58 decisions that were not in our favor, so our clients felt we should let the EEOC do its job,” Dowe said.
He added that age discrimination is “one of the worst forms of discrimination. Most of what you hear in discrimination cases is about race and gender, but Aging is terrible because people are at the end of their career, they can’t go back.” going to college and retooling, it’s humiliating, it makes their lives end in a disaster.”
He told CNBC he plans to sue Bowlero for $80 million, plus legal fees. As of March 31, Bowlero had about $212.4 million in cash and cash equivalents, according to quarterly securities filings. Dowe said he has until mid-July to file suit.
The company said previously that some of the claims against Bowlero are long-standing and may be challenged under the statute of limitations. Dowe said he is confident that his clients will prevail in federal court and that there are “strong” precedents in their favor.
In response, Bowlero’s attorneys Alex Spiro and Hope Skibitsky at the law firm Quinn Emanuel said they were “pleased with the outcome of the EEOC investigation.” Lawyers said the company will fight any claims by its former employees.
“Bowlero will refute those claims,” the attorneys said. In previous statements, they have denied the allegations against Bowlero.
In a separate but related matter, a request came in from former Bowlero executive Thomas Tanase protest against the bowling chain for extortion and retaliation charges that were dismissed by a Virginia federal court last week. Tanase’s attorneys previously said if the request is denied, the lawsuit could and “likely” would be filed as a new action. Bowlero also denied Tanase’s claims.
Tanase’s attorney did not immediately respond to a request for comment.
