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archer CEO Tom Shannon on Wednesday called allegations of discrimination against the fast-growing bowling alley operator “ridiculous,” but acknowledged that a federal investigation into the allegations may have hurt the company’s share price.
“These allegations are frankly ridiculous,” Shannon told CNBC’s “Mad Money with Jim Cramer.” “They don’t pass the sniff test. They don’t pass any logic.”
The U.S. Equal Employment Opportunity Commission in January proposed settling its longstanding investigation of age discrimination and retaliation claims against Bowlero for $60 million, CNBC reported last month. Talks about a settlement failed in April, a letter sent by the agency showed, turning the case to the EEOC general counsel for “potential enforcement action.”
Shannon said Wednesday that he doesn’t believe any potential action taken against Bowlero, the world’s largest owner and operator of bowling alleys, would be “material to the company in any way.” But he acknowledged that the investigation could have contributed to the company’s stock’s recent struggle, which has fallen more than 7% in the past month, driven largely by the company’s disappointing comment about foot traffic during its earnings call last month.
“Could (the investigation) cause the stock to fall back?” Kramer asked Shannon on Wednesday.
“I mean, I guess,” he said.
Shannon added, “Look, we’ve never been hit with a lawsuit. We’ve never been hit with anything, you know, in terms of evidence findings or anything like that.”
Bowlmor AMF President and CEO Tom Shannon attends Shay Mitchell’s grand opening of Bowlero Playa Del Rey on May 25, 2016 in Playa Del Rey, California.
Jerrod 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 out of revenge, Company deposits With a view of the Securities and Exchange Commission.
The agency’s proposed settlement is not public. This was disclosed 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 believes the plaintiffs’ attorney posted the information there “with a complicit journalist” on CNBC.com.
CNBC said it stands by the reports of the Bolro.
“Our story about Bolro has gone through a rigorous review process,” a CNBC spokesperson said in a statement.
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