Michigan drivers who participated in Walmart’s delivery program are set to receive a share of a $100 million multistate settlement announced this week, officials said.
Nessel joined a bipartisan coalition of attorneys general and the Federal Trade Commission (FTC) in reaching the agreement with Walmart over allegations that the retail giant misled both drivers and customers using its Spark Driver platform, according to a news release.
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“When businesses take advantage of hard-working residents who struggle for extra income to pay their bills and misrepresent their products to consumers, my office will work to hold them accountable,” said Attorney General Nessel. “This settlement ensures that drivers who were swindled out of their tips receive the money they deserve. We will continue to protect workers and consumers from deceptive business practices.”
Allegations about deceptive pay practices
Walmart has operated its Spark Driver program since 2018, allowing customers to order items for home delivery while independent drivers sign up through an app to complete deliveries. Nearly 1 million drivers nationwide have made 272 million deliveries through the platform.
According to the settlement, Walmart allegedly misrepresented how much drivers would earn per delivery.
The company displayed an offer that included base pay and any pre-selected customer tip. But after drivers accepted jobs, Walmart sometimes changed or split orders, resulting in drivers receiving less than the amount they had agreed to.
The settlement also resolves claims that Walmart failed to fully disclose incentive requirements, leading some drivers to miss out on promised bonus pay.
In addition, regulators alleged Walmart misled customers by suggesting 100% of their tips would go to drivers. In some cases, officials said, the company did not pass along the full tip, and occasionally kept it entirely.
How settlement will be distributed
Under the agreement, Walmart will pay or has already paid up to $79 million directly to drivers nationwide.
Of that total, at least $890,000 will go to affected Michigan delivery drivers.
The company will also pay $11 million to participating states and $10 million to the FTC, which will be used for consumer refunds.
Beyond financial penalties, Walmart must implement new safeguards.
The retailer is required to create an earnings verification program and submit annual reports to the FTC for the next 10 years to ensure drivers receive promised pay. The agreement also prohibits the company from changing delivery orders after drivers accept them or misrepresenting potential earnings.
Nessel joined attorneys general from Arizona, Colorado, Illinois, North Carolina, Oklahoma, Pennsylvania, South Carolina, Utah, and Wisconsin, as well as California’s Alameda County District Attorney, in securing the settlement.