RALEIGH, N.C. (WTVC) — Walmart is set to pay a $100 million settlement to address claims that it deceived both its delivery drivers and customers regarding tips and compensation within its Spark Driver platform.
This week, a proposed settlement was lodged in a California federal court, aiming to resolve legal challenges initiated by the Federal Trade Commission and a coalition of state attorneys general from both political parties.
According to court filings, Walmart neither acknowledges nor refutes the accusations but consented to the agreed-upon order to bring the case to a close. (Photo by Jessica McGowan/Getty Images)
The Spark Driver program enables customers to utilize an application for home delivery services, with independent contractors picking up and transporting orders directly from Walmart stores.
The formal complaint and the proposed agreement assert that Walmart presented drivers with an estimated earnings amount for a delivery, only to subsequently divide or alter elements of the order after the driver had already committed. Investigators reported instances where drivers were paid less than the initial base pay or tip indicated.
Furthermore, the settlement addresses accusations that Walmart failed to consistently transfer 100 percent of customer tips to its drivers, contrary to its explicit assurances.
The agreement additionally addresses claims that Walmart did not consistently forward the full amount of customer tips to drivers, despite its public statements. (Photo by Will Newton/Getty Images)
In accordance with the terms of the settlement, Walmart commits to the following actions:
- Provide $89 million in financial redress across the nation, encompassing compensation for affected drivers.
- Allocate $11 million to the states involved in the litigation.
- Establish a program for earnings verification to guarantee drivers receive the exact amount displayed when they accept a delivery assignment.
- Cease altering delivery offers once drivers have accepted them, apart from specific, defined exceptions outlined in the order.
- Furnish annual reports to the FTC over a decade to confirm adherence to the agreement.
Judicial records indicate that Walmart neither affirms nor refutes the claims but consented to the stipulated resolution to settle the case.
The FTC and state attorneys general noted that the litigation concerned inaccurate representations regarding initial tip amounts, base compensation, and bonus pay within the Spark Driver program, a service that has processed hundreds of millions of deliveries across the country. (AP Photo/Eduardo Munoz Alvarez, File)
Officials from the FTC and state attorneys general indicated that the matter centered on deceptive practices concerning pre-tip estimates, fundamental earnings, and additional incentive payments within the Spark Driver initiative, responsible for managing vast numbers of deliveries throughout the U.S.
This settlement remains subject to final approval by the court.
The full text of the proposed settlement can be reviewed below:
CONTRIBUTE TO THE DISCUSSION (1)
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