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Walmart has agreed to a $100 million judgment to settle allegations that it deceived delivery drivers about their pay and tips, the Federal Trade Commission announced Thursday — a move FTC Chair Andrew Ferguson touted as “a huge win for American workers.”
“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 your tip was actually going to go to drivers, which is what Walmart was telling both drivers and consumers,” Ferguson told “Varney & Co.”
“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.”
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Ferguson said the settlement will require Walmart to pay $100 million to drivers who “were denied the full compensation that they had been promised.”
He said the development also requires the company to “redo its business practices to make sure drivers get what they’re promised” and ensure representations made to both drivers and consumers are “correct [and] accurate,” and that the company “will live up to its promises.”
The FTC, along with 11 states, accused the retail giant of deceiving Spark delivery drivers about “base pay, incentive pay and tips they could earn,” leaving them to “lose tens of millions of dollars’ worth of earnings,” according to the agency’s public affairs office.
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“Labor markets cannot function efficiently without truthful and non-misleading information about earnings and other material terms,” FTC Bureau of Consumer Protection Director Christopher Mufarrige said in the press release.
A Walmart spokesperson told Reuters that the company has compensated affected drivers and is continuing to issue additional payments where necessary.
“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,” the spokesperson told the outlet.
Ferguson told FOX Business that the outcome isn’t limited to Walmart.
“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,” he said.
