Dozens of former employees say they have been fired Bowler based on their age or in a retaliatory plan to sue the bowling chain after the U.S. Equal Employment Opportunity Commission closed its case against the company, the attorney representing the plaintiffs said Monday.
Bowlero, the world’s largest owner and operator of bowling centers, had been embroiled in an EEOC investigation since 2016 involving more than 70 former employees who allege they were wrongfully terminated, the company previously disclosed in securities filings.
They alleged in complaints to the EEOC that Bowlero fired them for being too old while it was transforming its hundreds of locations from what the company called “dirty” bowling alleys to luxury experiences with increased food and beverage offerings, CNBC previously reported . . Bowlero denies the claims.
The company, which went public through a special purpose acquisition company in late 2021, was among the select blockbuster stocks to emerge from the SPAC boom. It owns two of the largest bowling brands – AMF and Lucky Strike – and operated more than 300 bowling centers in North America as of July, according to the most recent data available. According to company documentation, Bowlero nearly tripled its annual revenue from $395 million to $1.06 billion between 2021 and 2023. Shares of Bowlero are down about 21% year to date, as of Monday’s close.
On Monday, Bowlero announced in its fiscal quarterly results and quarterly securities filing that the EEOC has closed its case and will not move forward with a lawsuit.
“The Company has received positive updates on the status of the age discrimination claims pending with the EEOC…the EEOC has issued Closing Notices for the individual age discrimination charges that were filed with the EEOC in the majority of cases many years ago,” Bowlero said in his press release. “The notices self-evidently give plaintiffs an individual right to file a lawsuit.”
Bowlero noted that it has received letters from the EEOC stating that the agency has decided not to file a lawsuit against the company. In one of the letters, the agency said the closure of the cases does not absolve the company of wrongdoing.
“By terminating this case, the Commission does not confirm that [Bowlero] satisfies. Furthermore, our termination of the investigation will not affect the rights of any injured persons to file a private lawsuit, nor the right of the Commission to subsequently file a lawsuit or intervene in a private civil action ” said the EEOC letter sent Friday.
During the company’s earnings call with Wall Street analysts later Monday, executives said the EEOC investigation was now behind them and would no longer be a distraction.
“For eight and a half years, the company has vigorously denied and disputed the false allegations made against the company,” CEO Thomas Shannon said in his opening statement. “We are pleased to report these very positive developments on behalf of our shareholders.”
Later, when asked about the financial impact of the EEOC investigation, chief financial officer Robert Lavan said “a few million dollars” flowed through the income statement, but “more importantly, it was a distraction .’
“So we are happy that we can now focus 100% on our business and put this behind us,” said Lavan.
However, Daniel Dowe, a lawyer representing dozens of plaintiffs, said the case has not gone away, just will now take a different form.
The EEOC’s decision gives the former employees the opportunity to move forward with their own lawsuits, and Dowe expects to file a single lawsuit on behalf of more than 70 former employees, he told CNBC. Dowe plans to seek monetary damages in connection with the case.
The EEOC had previously found reasonable cause in 58 of the complaints filed against Bowlero, and the rest were still under investigation when the agency closed its case, according to Bowlero and Dowe’s securities filings. The employees who still had cases pending with the EEOC also have the right to file a lawsuit and are among the potential plaintiffs Dowe is representing, he said.
The company disclosed in the filings that the EEOC’s investigation also resulted in a reasonable grounds finding that Bowlero had engaged in a “pattern or practice” — a term indicating systemic problems — of age discrimination since at least 2013, which Bowlero also denies . . The EEOC’s pattern or practice investigation was also closed, Bowlero said.
When the EEOC finds reasonable cause in a complaint, it means it believes discrimination has occurred. EEOC data shows that the agency typically makes this decision only in a small fraction of cases each year.
Under EEOC procedure, when the agency finds discrimination has occurred, it attempts to resolve the situation between the employer and the victim, it explains on its website. If the parties cannot reach a resolution, the EEOC must decide whether to sue the employer – an issue that must be voted on by the EEOC commissioners.
“Due to limited resources, we cannot file a lawsuit in every case in which we find discrimination,” the EEOC explains on its website.
The EEOC attempted to settle the complaints with Bowlero for $60 million in January 2023, but those efforts failed last April, CNBC previously reported.
It is unclear whether the question of whether Bowlero should be charged has been voted on by EEOC commissioners. The EEOC declined to comment because most of its lawsuits are confidential under federal law.
Dowe said he asked the agency last month to close the case so his clients could move forward with their own lawsuits. He added that he is “delighted” that the case is now ready for private action.
“The investigations were thorough and in-depth and resulted in 58 to zero decisions in our favor, so our clients felt we should let the EEOC do its job,” Dowe said.
He added that ageism is “one of the worst forms of discrimination. Most of what you hear in discrimination cases is about race and gender, but age is terrible because people are at the end of their careers and can’t go back. going to college and taking a new course. It’s humiliating, it kind of ends their lives in a disaster.”
He told CNBC he plans to sue Bowlero for $80 million, plus legal fees. Bowlero had approximately $212.4 million in available cash and cash equivalents as of March 31, according to its quarterly securities filing. Dowe said he has until mid-July to file the lawsuit.
Some of the complaints against Bowlero are years old and can be challenged under the statute of limitations, the company has previously said. Dowe said he is confident his clients will prevail in federal court and that there is “strong” precedent in their favor.
In response, Bowlero’s attorneys Alex Spiro and Hope Skibitsky of law firm Quinn Emanuel said they are “pleased with the outcome of the EEOC investigation.” The lawyers said the company will fight all claims by former employees.
“Bowlero will deny these claims,” the lawyers said. In previous statements they denied the claims against Bowlero.
In a separate but related matter, a request by former Bowlero executive Thomas Tanase to sue the bowling chain over claims of racketeering and retaliation was denied in Virginia federal court last week. Tanase’s attorneys previously said that if the request is denied, the suit could and “likely” will be filed as a new action. Bowlero also denies Tanase’s claims.
Tanase’s attorneys did not immediately respond to a request for comment.