Attorney General Jeff Jackson Reaches $100 Million Multistate Settlement with Walmart for Deceiving Drivers and Customers Over Delivery
North Carolina’s drivers to receive up to $2 million
RALEIGH – Attorney General Jeff Jackson and a bipartisan group of attorneys general, along with the Federal Trade Commission (FTC), reached a $100 million multistate settlement with Walmart over allegations that the company deceived customers and drivers who participated in its Spark Driver Program. Walmart will pay drivers in North Carolina approximately $2 million that they lost because of Walmart’s alleged actions.
“Walmart misled its drivers and its customers so that the company could keep tips and other money that belonged to drivers,” said Attorney General Jeff Jackson. “I’m grateful for the federal government’s partnership on this case to make Walmart pay back millions for North Carolina drivers.”
Walmart has run the Spark Driver program since 2018. Customers can use the Spark App to order products from Walmart for home delivery, and people can sign up to be drivers on the app. Drivers pick up products from Walmart stores and deliver them to customers, and they use the app to view and select offers to complete deliveries for payment. These offers include an estimate of how much the driver will earn from the delivery, including the base amount Walmart will pay the driver and any pre-tip the customer has selected to pay. Walmart also offers incentive pay if drivers complete deliveries within a specific period of time or in a particular area, complete a certain number of deliveries, or refer a new driver. Almost a million drivers have made 272 million deliveries nationwide through the program.
Today’s settlement resolves allegations that Walmart misrepresented pre-tip amounts, base pay, and incentive pay to drivers. While Walmart showed one offer to the driver, they would split or change parts of the order after the driver accepted the offer, and ultimately, the driver received less than the base pay, the full tip, or the base pay. Walmart also failed to pay drivers for completing incentives by not disclosing the full incentive requirements.
Walmart also allegedly deceived customers into thinking that 100 percent of their tip would go to drivers when, in fact, the company didn’t always pass on the full tips to the drivers and sometimes kept them entirely.
As part of the $100 million judgment included in the settlement, Walmart will pay or already has paid up to $79 million directly to drivers. In addition, the company is paying a total of $11 million to the states and an additional $10 million to the FTC, which will be used to provide refunds to consumers. Walmart will also have to operate an earnings verification program and submit an annual report to the FTC for the next 10 years to make sure drivers are being paid what they were promised, and the company is prohibited from modifying orders after drivers accept them or misrepresenting how much a driver will earn from an offer.
Attorney General Jackson is joined in reaching this settlement by the FTC, the Attorneys General of Arizona, Colorado, Illinois, Michigan, Oklahoma, Pennsylvania, South Carolina, Utah, and Wisconsin, and the District Attorney of Alameda County.
A copy of the proposed settlement is available here.
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