Walmart Agrees to $100,000,000 Settlement After FTC Says It Misled Drivers on Pay and Tips

Walmart has agreed to pay $100 million to settle a lawsuit filed by the Federal Trade Commission (FTC) regarding deceptive earnings claims made to delivery drivers using the Spark Driver app. The FTC, along with 11 US states, alleged that Walmart misled drivers about their potential earnings while making deliveries for the retail giant.

The complaint stated that Walmart’s deceptive practices caused independent contractor drivers to lose millions of dollars in earnings over a four-year period. Walmart has been utilizing the Spark Driver program since 2018, allowing gig workers to deliver groceries and other merchandise for the company.

The FTC accused Walmart of providing false information to drivers regarding their earnings, including pre-tips, base pay, and incentive opportunities. Additionally, Walmart allegedly did not disclose that tips on deliveries were not preauthorized and that drivers may not receive the full amount. The company also failed to fully explain the requirements for qualifying for incentive payments.

As part of the settlement, Walmart will pay drivers approximately $79 million to cover the disparity between the earnings or tips shown to drivers and what they actually received, as well as unpaid incentives. The company has already paid $62.8 million to drivers, with the remaining amount to be distributed among the 11 states involved in the lawsuit.

In addition to the payments to drivers and states, Walmart will pay the FTC $10 million. It is important to note that Walmart neither admits nor denies the allegations in the complaint.

This settlement underscores the importance of transparency and honesty in labor markets. By providing accurate information about earnings and other terms, companies can ensure that workers are able to make informed decisions about their employment opportunities.

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