Walmart will pay out $100 million in settlement of a lawsuit brought by the Federal Trade Commission against a driver.
In a lawsuit, the FTC along with 11 US states claim that Walmart has misled its drivers regarding how much money they will earn by using the Spark Driver application to make deliveries for the largest retailer in the world.
Walmart is accused by the FTC of deceiving independent contractors drivers over a period of four years, causing them to “lose tens or millions of dollars in earnings”.
Walmart uses the Spark Driver Program since 2018. This program allows gig workers to deliver groceries, merchandise and more.
The complaint says
Walmart has been misleading drivers since at least 2021 about the three main areas that affect driver earnings. These are: pre-tips chosen by customers during checkout, base salary, and special “incentive” earnings opportunities.
“Walmart has misled its customers as to whether or not their tip will be paid by drivers.
According to the FTC, drivers choose which Spark jobs they want to do based on how much money they hope to make.
Christopher Mufarrige is the director of FTC Bureau of Consumer Protection.
Walmart is accused of deceptive practices, such as failing to inform customers that tips for deliveries are not authorized in advance and could result in a lower tip or no tip at all. Walmart has also been accused of failing to fully explain the qualifications needed for receiving driver incentives payments.
The complaint also alleges Walmart misled customers into believing that 100% of the tips they left would be given to drivers when in fact the company didn’t always give the entire tip to the driver.
Walmart has agreed to pay approximately $79 Million to drivers as part of the settlement. This will cover any difference in earnings, tips or incentives between what was shown and received by the driver at the time they accepted the delivery. Walmart paid drivers about $62.8 million out of this amount.
Walmart has also agreed to pay $10 million in compensation to the FTC. The remaining $11million will be split amongst the eleven states who joined the suit, which include Arizona, California. Colorado, Illinois. Michigan. North Carolina. Oklahoma. Pennsylvania. South Carolina. Utah.
Walmart has not admitted or denied any allegations made in the lawsuit.
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As new information becomes available, this post Walmart Acquires $100 Million Settlement Following FTC Charges That It Misled Drivers About Pay and Tips might be updated.
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