Dozens of former employees claim they were fired Bowler because of age or retaliation plans to sue the bowling chain after the U.S. Equal Employment Opportunity Commission closed its case against the company, a lawyer representing the plaintiffs said Monday.
Bowlero, the world’s largest bowling alley owner and operator, was embroiled in an EEOC investigation since 2016, it includes more than 70 former employees who say they were wrongfully terminated, as the company has previously disclosed in securities filings.
In complaints to the EEOC, they alleged that Bowlero fired them because they were too senior as he worked to transform his hundreds of locations from what the company called “seedy” bowling alleys into exclusive experiences with increased food and beverage offerings, as previously reported by CNBC. Bowlero denies these claims.
The company, which went public in behind schedule 2021 through a special purpose acquisition company, was among a select few companies that found success in the wake of the SPAC boom. It owns two of the largest bowling brands – AMF and Lucky Strike – and operated more than 300 bowling alleys in North America as of July, the most recent data available. Company data shows that between 2021 and 2023, Bowlero nearly tripled its annual revenue, from $395 million to $1.06 billion. As of Monday’s close, Bowlero’s stock is 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 a lawsuit.
“The company has received positive updates on the status of age discrimination claims pending with the EEOC…The EEOC has issued Closing Notices on individual age discrimination claims that, in most cases, were filed with the EEOC many years ago,” Bowlero stated in its press release. “The notices clearly provide plaintiffs with an individual right to bring a lawsuit.”
Bowlero noted that he has received letters from the EEOC stating that the agency has decided not to pursue legal action against the company. In one of the letters, the agency stated that closing the cases does not clear the company of irregularities.
“The Commission, when concluding its consideration of this case, does not confirm this [Bowlero] It is compatible. “Our termination of the investigation also does not affect the rights of victims to bring a private lawsuit or the Commission’s right to later bring a lawsuit or intervene in a private civil proceeding,” the EEOC said in a letter sent Friday.
During the company’s earnings call with Wall Street analysts on Monday, executives said the EEOC investigation was now behind them and would no longer distract them.
“Over eight and a half years, the company has vigorously denied and disputed the false allegations made against it,” CEO Thomas Shannon said in opening remarks. “We are pleased to announce these very positive developments on behalf of our shareholders.”
Later asked about the financial impact of the EEOC investigation, Chief Financial Officer Robert Lavan said that “several million dollars flowed through the income statement,” but “more importantly, it was a distraction.”
“That’s why we’re cheerful that we can now focus 100% on our business and get this over with,” Lavan said.
But Daniel Dowe, a lawyer representing dozens of plaintiffs, said the case is not over – it will just take a different form.
The EEOC’s decision allows former employees to bring their own lawsuits, and Dowe expects to file one lawsuit on behalf of more than 70 former employees, he told CNBC. Dowe plans to seek monetary damages in connection with the case.
According to Bowlero and Dowe’s filings, the EEOC had previously found probable cause in 58 complaints filed against Bowlero, and the rest were still under investigation when the agency closed the case. Employees who still have pending EEOC cases also have the right to sue and are among the potential plaintiffs Dowe represents, he said.
The company disclosed in its filings that the EEOC’s investigation also led to a finding of probable cause 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. Bowlero said the EEOC’s pattern or practice investigation has also been closed.
If the EEOC finds merit in a complaint, it means it believes it discrimination occurred. The Agency usually makes this decision only in a diminutive proportion of cases each year, EEOC data shows.
As it explains on its website, under the EEOC’s procedure, when the agency determines that discrimination has occurred, it seeks to resolve the situation between the employer and the victim. If the parties fail to reach a resolution, the EEOC must decide whether to sue the employer – an issue on which EEOC commissioners must vote.
“Due to confined resources, we cannot bring suit in every case where we find discrimination” – EEOC explains on its website.
The EEOC attempted to settle the Bowlero complaints for $60 million in January 2023, but that effort failed last April, as previously reported by CNBC.
It is unclear whether the issue of suing Bowlero came to a vote among EEOC commissioners. The EEOC declined to comment because most of its processes are confidential under federal law.
Dowe said he asked the agency last month to close the case so his clients could proceed with their own lawsuit. He added that he was “delighted” that the matter was now ready for private action.
“The investigation was thorough and thorough and resulted in a 58-to-nil decision 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 about in discrimination cases is about race and gender, but age is terrible because people end their careers and can’t go back to college and retrain. It’s humiliating, in a way it ends their lives in 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 available cash and cash equivalents, according to quarterly securities filings. Dowe said he has until mid-July to file the lawsuit.
Some of the complaints against Bowlero are years senior and could be challenged within the statute of limitations, the company previously said. Dowe said he is confident his clients will prevail in federal court and that there is “mighty” precedent in the case in their favor.
In response, Bowlero’s attorneys, Alex Spiro and Hope Skibitsky of Quinn Emanuel Law Firm, said they were “pleased with the outcome of the EEOC investigation.” Lawyers said the company would fight any claims made by its former employees.
“Bowlero will deny these claims,” the lawyers said. In previous statements, they denied the accusations against Bowlero.
In a separate but related case, a Virginia federal court last week denied former Bowlero executive Thomas Tanase’s motion to counter the bowling chain over claims of extortion and retaliation. Tanase’s attorneys previously said that if the request is denied, the lawsuit could and “likely will” be filed as part of a recent lawsuit. Bowlero also denies Tanase’s claims.
Tanase’s lawyers did not immediately respond to a request for comment.
