Attorney General Raoul Reaches $100 Million Settlement With Walmart For Deceiving Drivers, Customers Over Delivery
Illinois Drivers to Receive over $1.1 Million
CHICAGO – Attorney General Kwame Raoul, with a bipartisan group of 11 attorneys general and the Federal Trade Commission (FTC), reached a $100 million multistate settlement with Walmart today over allegations that the company deceived customers and drivers who participated in its Spark Driver (Spark) program. Walmart has paid Illinois drivers more than $1.1 million because of Walmart’s alleged actions.
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Raoul and the coalition’s settlement resolves allegations that Walmart misrepresented pre-tip amounts, base pay and incentive pay to drivers through the Spark application. The application, which Walmart has used since 2018, allows customers to order products for home delivery that drivers deliver from Walmart stores to customers. More than 270 million deliveries nationwide have been made by nearly 1 million drivers through Spark.
“I am pleased to be part of this bipartisan coalition with the FTC resolving allegations that Walmart misrepresented grocery delivery fees to customers and drivers,” Raoul said. “Companies should not be able to lure in vulnerable gig workers in Illinois by misstating how much a job is worth, and Illinois consumers should feel confident that any tip they pay is going to the worker who earned it.”
Drivers use Spark to view and select Walmart delivery offers, which 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 a certain number of deliveries within a specific period of time or in a particular area.
It is alleged that Walmart made offers to drivers through the Spark app, then split or changed parts of the order after a driver had accepted, which resulted in drivers receiving less than the base pay or the full tip shown in the initial offer. Walmart also allegedly failed to disclose the full incentive pay requirements to drivers who completed incentive tasks, and who only became aware of additional requirements when they were not paid.
As part of the $100 million judgment included in the settlement, Walmart will pay up to $79 million in restitution. Of this amount, Walmart has already paid approximately $63 million directly to drivers, including $1.1 million to Illinois drivers. The remaining $16 million in restitution will be placed in a “Driver Fund” established by Walmart for compensating drivers for any claims not yet identified or paid. In addition to restitution, the company is paying a total of $11 million to the states, including approximately $1.1 million to Illinois and an additional $10 million to the FTC.
Walmart will also have to operate an earnings verification program and submit an annual report to the FTC for the next 10 years to ensure drivers are paid what they are promised. The company is also prohibited from modifying orders after drivers accept them or misrepresenting how much a driver will earn from an offer.
Joining Raoul in reaching this settlement by the FTC are the attorneys general of Arizona, Colorado, Michigan, North Carolina, Oklahoma, Pennsylvania, South Carolina, Utah and Wisconsin. The district attorney of Alameda County, California was also part of this settlement.
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