Dozens of former employees who say they were fired Bowler based on their age or the retaliation plan to sue the bowling alley 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, was involved in an EEOC investigation from 2016 involving more than 70 former employees who claim they were wrongfully terminated, the company previously disclosed in securities filings.
They alleged in EEOC complaints that Bowlero fired them because they were too old as it sought to transform its hundreds of locations from what the company has described as “lifeless” bowling alleys to luxury experiences with increased food and beverage offerings, CNBC previously reported. Bowlero denies the allegations.
The company, which went public in late 2021 through a special-purpose buyout company, was among a select number of successful stocks to emerge from the SPAC boom. It owns two of the biggest brands in bowling – AMF and Lucky Strike – and operated more than 300 bowling centers across North America as of July, the most recent data available. Between 2021 and 2023, Bowlero nearly tripled its annual revenue, from $395 million to $1.06 billion, according to company filings. Bowlero’s stock is down about 21% year-to-date as of Monday’s close.
On Monday, Bowlero disclosed in its fiscal third-quarter earnings release and quarterly securities filing that the EEOC has closed its case and will 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 notices of closure on the individual age discrimination charges that were filed, in most cases, many years ago with the EEOC; Bowlero said in his press release. “Notices give plaintiffs, of course, an individual right of action.”
Bowlero noted that he received letters from the EEOC stating that the agency has decided not to pursue charges against the company. In one of the letters, the agency said closing the cases does not clear the company of wrongdoing.
“By terminating the processing of this case, the Commission does not certify that [Bowlero] is in compliance. Also, the termination of our investigation does not affect any injured party’s rights to file a private lawsuit or the Commission’s right to later sue or intervene in a private civil action,” the EEOC’s letter, sent Friday, said.
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 more than eight and a half years, the company has vigorously denied and contested the false allegations made against it,” chief executive Thomas Shannon said in his opening remarks. “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 that “there was a few million dollars” that went off the income statement, but “more importantly, it was a distraction.”
“So we are happy to now focus 100% on our business and put it behind us,” said Lavan.
But Daniel Dowe, a lawyer representing dozens of plaintiffs, said the case isn’t gone — it’s just going to take another form.
The EEOC ruling allows former employees to proceed 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 probable cause in 58 of the complaints filed against Bowlero, and the rest were still under investigation when the agency closed its case, according to securities filings by Bowlero and Dowe. Employees who still had pending cases with the EEOC also have the right to file a lawsuit and are among the potential plaintiffs represented by Dowe, he said.
The company disclosed in filings that the EEOC’s investigation also led to a reasonable cause determination that Bowlero had engaged in a “pattern or practice” — a term that indicates systemic issues — of age discrimination since at least 2013, which Bowlero also denies. The EEOC’s pattern or practice investigation has also been closed, Bowlero said.
When the EEOC finds probable cause in a complaint, it means it believes it discrimination occurred. The agency usually only makes this determination in a small fraction of cases each year, They show EEOC evidence.
Under the EEOC process, when the agency finds that discrimination has occurred, it works to resolve the situation between the employer and the victim, it explains on its website. If the parties are unable to reach a resolution, the EEOC must decide whether to sue the employer — a matter for EEOC commissioners to vote on.
“Due to limited resources, we cannot file a lawsuit in every case where we find discrimination,” EEOC explains on her website.
The EEOC tried to settle the complaints with Bowlero for $60 million in January 2023, but those efforts fell through last April, CNBC previously reported.
It is unclear whether the question of whether to sue Bowlero came to a vote with EEOC commissioners. The EEOC declined to comment because most of its proceedings are confidential under federal law.
Dowe said he asked the agency to close his case last month so his clients could move forward with their own lawsuits. He added that he was “pleased” that the matter was now ready for private action.
“The investigations were thorough and deep 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 age discrimination is “one of the worst forms of discrimination. Most of what you hear about discrimination is about race and gender, but age is awful because people are at the end of their careers, they can’t go back It’s humiliating, it ends their lives in a disaster.”
He told CNBC that 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 on hand, according to its quarterly securities filing. Dowe said he has until mid-July to file the lawsuit.
Some of the complaints against Bowlero are old and could be challenged under the statute of limitations, the company previously said. Dow said he is confident his clients will prevail in federal court and that there is a “strong” precedent 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 would fight any claims brought by former employees.
“Bowlero will defeat these allegations,” 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 alley chain over claims of extortion and retaliation was denied in federal court in Virginia last week. Tanase’s attorneys previously said if the request is denied, the suit can and “probably will” be filed as a new lawsuit. Bowlero also denies Tanase’s claims.
Attorneys for Tanase did not immediately respond to a request for comment.