Brett Parker, Managing Director of Bowlero BOWL, comments on the EEOC discrimination investigation

A bowlero The chief executive spoke publicly for the first time on Wednesday about the sweeping federal discrimination probe the company is facing after it reported another quarter of its so-called record-breaking growth.

Brett Parker, the company’s outgoing CFO and longtime No. 2 to CEO Thomas Shannon, was questioned about the investigation during a conference call. The question came about a week after CNBC announced that authorities are looking to settle the $60 million investigation.

“There has been some buzz surrounding the upcoming EEOC review. She seemed to have garnered quite a bit of media attention over the past week. I’d like to see if you have anything to comment on that,” Craig-Hallum Capital Group analyst Jeremy Scott Hamblin asked Parker.

Parker responded that the allegations made in the CNBC coverage were “completely false” and “we deny them in the strongest possible terms.”

“We have nothing to hide. We have cooperated fully throughout the process and have provided documentation information and documents to the EEOC,” said Parker.

“Our own thorough investigation of the claims also found no evidence of any wrongdoing or violation of our policies prohibiting all forms of workplace discrimination,” he said.

Parker said the company “does not tolerate any discriminatory or degrading context.” He insisted “these are the facts,” which is why the company fought so hard to have the claims dismissed.

“Whatever the outcome, it will not materially impact our business or prevent us from executing on our strategic priorities. Our recent earnings results, which we are now discussing, reflect our unwavering focus and commitment to excellence,” he said.

“Ultimately, we stand by our positive workplace culture, we stand by our visionary leader, and we stand by our track record of nurturing exceptional talent. And beyond that, we can’t say much.”

Bowlero’s fiscal third quarter revenue for the three months ended April 2 was $316 million, up 22% year over year, but net loss increased to $32 million, which represents an increase of 78% compared to the same period last year. The loss was due to an $87 million charge related to a revaluation of earnout shares.

Bowlero’s third quarter is historically its strongest, and executives noted on a earnings call that last quarter was its strongest ever. However, Bowlero’s stock plummeted as markets opened Thursday morning, closing nearly 17% lower.

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

Additionally, Bowlero noted in its quarterly securities statement that its disclosure controls and procedures were not effective due to a material weakness related to its accounting processes.

The disclosure prompted three Law firms are to open investigations into Bowlero for possible securities violations, according to press releases from the firms. Shareholders were asked to contact the companies. Bowlero did not respond to a request for comment on the matter.

The case involves at least 73 former employees who claim to have been fired based on their ageor in retaliation, as indicated in securities filings.

In 55 of those cases, the EEOC found a valid ground that triggered a major model or practice investigation – the type of investigation the agency opens into cases where systemic discrimination issues might arise.

The agency has found reasonable grounds that Bowlero has engaged in a pattern or practice of discrimination since at least 2013, coinciding with its expansion from a small chain to a nationwide leader with 329 locations.

Bowlero’s CEO is accused of instructing employees to fire older employees and replace them with candidates deemed young and hip, former employees told EEOC.

The affidavit said the top executive also made condescending jokes about women, casual “racially motivated” remarks and negative comments about LGBTQ people among employees. Some female employees did not openly disclose their marital status or pregnancies for fear of losing their jobs, a former human resources worker told EEOC.

Bowlero’s attorneys had previously called any allegation against Shannon “baseless.”

While it is not uncommon for a company, particularly Bowlero’s size, to be faced with an EEOC complaint from a former employee, it is rare for the EEOC to determine a valid cause.

According to the latest available data, throughout fiscal 2021, the agency found a valid reason in just 2.8% of the thousands of age discrimination allegations it received.

According to attorney Daniel Dowe, who represents more than 70 former employees with claims against the company, the EEOC recently attempted to settle the $60 million charge, but negotiations stalled when Bowlero countered with $500,000.

The case is now expected to end up in court, where Bowlero could face even bigger fines, experts previously said.