FTC Settlement Announcement
Walmart has agreed to a $100 million judgment to resolve allegations from the Federal Trade Commission that it deceived delivery drivers regarding their pay and tips. The FTC announced the settlement on Thursday, with Chair Andrew Ferguson highlighting it as a significant victory for American workers using Walmart's delivery services nationwide.
We had been investigating Walmart and its representations that it was making to its delivery drivers that millions of Americans use all across the country, and the consumers who are using the delivery services, about how much delivery drivers were going to be paid, whether the entirety of our tip was actually going to go to drivers, which is what Walmart was telling both drivers and consumers.
Investigation Findings
The FTC investigation determined that Walmart misrepresented both driver compensation amounts and tip allocations to both drivers and consumers. This led to drivers being denied millions of dollars they expected upon signing up for Spark delivery jobs. The accusations, joined by 11 states, focused on deceptive practices concerning base pay, incentive pay, and tips, costing drivers tens of millions in earnings.
What we concluded in our investigation is that… Walmart was misrepresenting both how much drivers were going to get paid and where tips were going, both to drivers and consumers, and that meant that drivers were denied millions and millions of dollars that they thought they were going to get when they signed up to do these jobs for Walmart.
Settlement Terms and Reforms
Under the settlement, Walmart must pay $100 million to drivers denied full promised compensation. The company is also required to overhaul its business practices to ensure drivers receive promised pay, and that representations to drivers and consumers are accurate. FTC Bureau of Consumer Protection Director Christopher Mufarrige emphasized the need for truthful information in labor markets.
Labor markets cannot function efficiently without truthful and non-misleading information about earnings and other material terms.
Walmart's Response
A Walmart spokesperson informed Reuters that the company has already compensated affected drivers and continues to issue additional payments as needed, while continuously improving procedures for fairness and transparency.
We value the hard work and dedication of the drivers who deliver great service and products to our customers... We are continuously improving procedures to ensure fairness and transparency for drivers.
Broader Implications
Ferguson noted that the outcome extends beyond Walmart, signaling that all gig delivery services must honor compensation promises or face accountability.
Any of the sort of gig delivery services that try to induce people to do deliveries by making promises about compensation have to be honest about those promises, and we're going to hold everyone to account – not just Walmart.
