Bowlero executive publicly comments on discrimination probe for first time as bowling alley chain continues torrid growth

A Bowlero executive publicly addressed the sprawling federal discrimination plumb the company is facing for the first time Wednesday after it reported another quarter of what it called record-breaking cultivation. 

Brett Parker, the company’s outgoing chief financial officer and longtime No. 2 to CEO Thomas Shannon, was asked forth the investigation during an earnings call. The question came about a week after CNBC revealed authorities wish for to settle the investigation for $60 million. 

“There’s been quite a bit of noise related to the EEOC review that’s been till such time as here. It seemed to grab quite a bit of media attention in the last week. Want to see if there is anything that you fall short of to comment on that,” Jeremy Scott Hamblin, an analyst with Craig-Hallum Capital Group, asked Parker. 

Parker responded by signifying the claims included in CNBC’s reporting are “entirely false,” and “we deny them in the strongest terms.”

“We have nothing to take cover. We have fully cooperated and provided information to document — and documents to the EEOC throughout this whole process,” contemplated Parker. 

“Our own thorough investigation into the claims also has not substantiated any evidence of wrongdoing or any violation of our policies prohibiting any approach of employment discrimination,” he said.

Parker went on to say the company “does not tolerate discriminatory or demeaning context.” He insisted “these are the occurrences,” which is why the company has fought so hard to have the claims thrown out.

“Whatever the outcome is, it will not materially impact our responsibility or distract us from executing against our strategic priorities. Our latest earnings results that we’re talking about now display our unwavering focus and commitment to excellence,” he said. 

“At the end of the day, we stand by our positive workplace culture, we stand by our visionary leader, and we epitomize by our track record of cultivating exceptional talent. And beyond that, there’s not much we can say.”

Bowlero’s fiscal third-quarter gross income in the three months that ended April 2 was $316 million, up 22% year over year, but its net loss increased to $32 million, a 78% jump compared to the year-earlier period. The loss was driven by an $87 million expense associated with a revaluation of earnout shares.

The third rooms is historically the company’s strongest, and executives noted during an earnings call the latest quarter was its strongest ever. Setting aside how, Bowlero’s stock plummeted when the markets opened Thursday morning and it closed nearly 17% lower.

During its earnings bellow, the company said it had benefited from post-pandemic demand in restaurants and entertainment and its strong year-over-year growth is expected to standardize as consumers cut spending.

Further, in its quarterly securities filing, Bowlero noted its disclosure controls and procedures were not things because of a material weakness related to its accounting processes.

The disclosure prompted three law firms to open investigations into Bowlero for likely securities violations, press releases sent by the firms state. Stockholders were encouraged to contact the firms. Bowlero didn’t indemnification a request for comment on the matter.

Last week, Bowlero’s stock dropped as much as 9% in intraday vocation after CNBC published an investigation that revealed new details about a sprawling investigation the U.S. Equal Employment Break Commission has been conducting into the company’s employment practices. The stock closed about 4% lower that day.

Parker’s notes mark the first time a Bowlero executive has publicly addressed the EEOC’s probe, which has been ongoing since 2016.

When CNBC reached out to Bowlero late to publishing a report about the probe, the company refused to make its executives available for an interview. It only communicated because of its attorneys and an outside press representative. At times, discussions around reporting the confidential settlement negotiations became antagonistic when the pretence press representative intimated a CNBC reporter could be arrested for publishing the information, underscoring the seriousness of the claims.

The specimen involves at least 73 former employees who claim they were fired based on their age, or out of retaliation, according to convictions filings.

The EEOC has found reasonable cause in 55 of those cases, which sparked a larger pattern or discipline probe — a type of investigation the agency initiates in cases where systemic issues of discrimination could be occurring. 

The power has found reasonable cause that Bowlero has engaged in a pattern or practice of discrimination since at least 2013, which matches with its expansion from a small chain to a national powerhouse with 329 locations. 

Bowlero’s CEO is accused of directing organization to fire aging employees and replace them with candidates perceived as young and hip, former employees told the EEOC. 

Total staff, the top executive was also known to make condescending jokes about women, offhand remarks that were “racially drove” and negative comments about LGBTQ people, the affidavit says. Some female employees didn’t openly squeal their marital status or their pregnancies out of fear of losing their jobs, a former HR employee told the EEOC.

Bowlero’s counselors-at-law previously called every allegation against Shannon “meritless.”

While it is not uncommon for a company, especially one of Bowlero’s dimension, to face an EEOC complaint from a former employee, it is rare for the EEOC to determine reasonable cause. 

In all of fiscal 2021, the most latest data available, the agency found reasonable cause in just 2.8% of the thousands of age-discrimination charges it received. 

The EEOC recently endeavoured to settle the charges for $60 million, but negotiations fell apart when Bowlero countered with $500,000, concurring to attorney Daniel Dowe, who represents more than 70 former employees with claims against the firm. 

The case is now expected to go to court, where Bowlero could face even steeper fines, experts said some time ago.