Walmart to pay $100 million to settle FTC gig worker lawsuit

Walmart has agreed to pay $100 million to settle a lawsuit brought by the Federal Trade Commission (FTC), the US consumer protection regulator, over allegations of “deceptive pay practices” within its Spark Driver service. The Spark Driver program uses gig workers to deliver online orders from local stores to customers. The regulator accused the retailer of “misleading drivers” about their potential base pay and tip amounts since 2021. In addition, the lawsuit alleged that Walmart “deceived customers” by claiming that 100% of tips went directly to drivers, though the FTC asserted that wasn’t always true. These practices caused drivers to lose millions of dollars.

According to the complaint, Walmart made “false representations about Spark Driver earnings” through several specific practices:

• Splitting tips: Walmart frequently split customer orders between multiple drivers, which led to split tips, despite telling customers that a single driver would receive the full tip.
• Removing tips: In batch orders, the retailer removed tips from some orders without informing the driver.
• Failing to collect tips: Walmart promised tips to drivers in advance but failed to collect those tips from customers.
• Reducing base pay: The company reduced drivers’ base pay after they had already accepted an offer.

To resolve these issues, the settlement requires Walmart to implement an earnings verification program to ensure drivers are paid their promised earnings and tips. Additionally, under the terms of the agreement, the retailer is prohibited from adjusting base pay, incentives, or tips after the initial offer is accepted.

The FTC was joined in the complaint by a coalition of US states, including Arizona, California, Colorado, Illinois, Michigan, North Carolina, Oklahoma, Pennsylvania, South Carolina, Utah, and Wisconsin. Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, emphasized the broader economic implications of the case. “Labor markets cannot function efficiently without truthful and non-misleading information about earnings and other material terms,” Mufarrige said in a statement. He added, “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.”

Why it matters

This settlement forces a major retailer to overhaul its gig-worker compensation transparency, setting a clear regulatory precedent for how large platforms must handle earnings disclosures and post-offer pay adjustments.