Walmart Settles FTC Gig Driver Pay Lawsuit for $100M

Walmart has agreed to pay $100 million to settle a Federal Trade Commission (FTC) lawsuit accusing the retail giant of systematically deceiving Spark Driver gig workers about their earnings and withholding tips. The nationwide settlement addresses deceptive practices within Walmart’s proprietary delivery network, which relies on independent contractors to transport online orders from local stores directly to customers’ doorsteps.

How Walmart Deceived Spark Drivers and Customers

According to the federal regulatory agency, Walmart misled its delivery drivers regarding potential base pay and tip amounts. Simultaneously, the retailer falsely assured customers that 100% of their added tips would go directly to the drivers who fulfilled their orders, which was not the case.

The Mechanics of the Tip-Splitting Scheme

The FTC’s legal complaint detailed several deceptive tactics used by Walmart since 2021 to manipulate driver payouts. The retailer frequently split a single customer order among multiple drivers, which resulted in splitting the associated tip. However, Walmart’s customer-facing platform explicitly stated that a single driver would receive the entire gratuity.

Additionally, for batched orders, Walmart routinely removed tips from specific deliveries without notifying the drivers. The company also promised drivers upfront tips to incentivize them to accept delivery offers, only to fail to collect those tips from customers, leaving the drivers empty-handed.

Base Pay Reductions and Misleading Incentives

Beyond tip manipulation, the lawsuit highlighted arbitrary reductions in driver compensation. Walmart frequently lowered the promised base pay after a driver had already accepted a delivery offer. The company also promoted misleading financial incentives that falsely suggested drivers could earn extra cash through the platform.

A Multi-State Coalition Against Gig Worker Exploitation

The FTC was joined in the lawsuit by a coalition of eleven states, including Arizona, California, Colorado, Illinois, Michigan, North Carolina, Oklahoma, Pennsylvania, South Carolina, Utah, and Wisconsin. The regulators asserted that these deceptive pay structures cost gig workers millions of dollars in promised earnings and triggered thousands of formal consumer complaints.

Settlement Terms: Strict Oversight and Pay Guarantees

Under the terms of the newly established settlement, Walmart must implement a comprehensive earnings verification program. This system is designed to guarantee that Spark drivers receive the exact pay and tips they are promised.

Furthermore, Walmart is now strictly prohibited from adjusting base pay, incentives, or tips once an offer has been accepted, unless the driver fails to complete the service or the customer cancels the order. The retail giant is also permanently banned from misrepresenting potential earnings in any future recruitment or driver offer materials.

“Labor markets cannot function efficiently without truthful and non-misleading information about earnings and other material terms,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, in an official statement. “Today’s settlement reflects the Trump-Vance FTC’s focus on ensuring a healthy labor market for American workers, which is critical to the nation’s success.”