Walmart Inc. has reached a significant settlement with the U.S. Federal Trade Commission (FTC), agreeing to pay $100 million to resolve allegations that it misled its delivery drivers regarding potential earnings and tips. The FTC, alongside 11 states—including Arizona, California, and Illinois—accused the retail giant of inflating pay expectations for drivers under its Spark delivery program.
Launched in 2018, the Spark program allows gig workers to sign on for delivery assignments. The FTC claimed that Walmart misrepresented earnings by showcasing inflated base pay and tip amounts. Moreover, the commission alleged that the retailer deceived customers by suggesting that all customer tips were directed entirely to drivers. In reality, Walmart reportedly split tips when deliveries were assigned to multiple drivers, failing to disclose this practice to the individuals driving for them.
Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, emphasized the importance of accurate information in labor markets, stating that efficient operations cannot occur without transparent communication regarding earnings and other crucial terms.
As part of the settlement, Walmart is mandated to establish an earnings verification program to ensure drivers receive the wages and tips they were promised. The retailer has previously lauded the success of its online delivery system, noting a 27% increase in e-commerce sales during the last fiscal quarter, which accounted for 23% of its overall sales.
In response to the settlement, Walmart expressed appreciation for the hard work of its delivery drivers, indicating that it has already issued payments to affected drivers and will continue to do so as necessary. The company reaffirmed its commitment to enhancing fairness and transparency for its drivers moving forward.
