Walmart Hit With Suit on Behalf of Delivery Drivers
The Consumer Financial Protection Bureau (CFPB), a federal agency, has filed a lawsuit alleging that Walmart and payments platform Branch illegally established deposit accounts for more than 1 million delivery drivers collectively paid $10 million-plus in fees. The drivers were in Walmart’s Spark Driver initiative, through which gig economy drivers make last-mile deliveries from the company’s stores across the country. Golden Valley, Minn.-based Branch is a fintech company offering deposit accounts at Evolve Bank & Trust that consumers can access through a digital app and debit card.
According to the suit, which was filed in U.S. District Court in Minnesota, the drivers were forced to use the accounts, which they maintain were opened without their consent, to receive payment and were misled about how to access their earnings, with Walmart threatening to terminate workers who didn’t comply. Drivers were made to undergo a complex process to receive their pay, with further delays or fees if they wanted to transfer the money into another account. Workers ended up paying more than $10 million in fees to transfer their earnings into their own accounts, the CFPB alleges.
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The suit further claims that Walmart and Branch violated federal law for two years, beginning in 2021. During that time, the companies allegedly used drivers’ information, including Social Security numbers, to open accounts without permission. Drivers’ pay was subsequently deposited into the accounts without their authorization, requiring the drivers to pay more than $10 million in fees to Branch to transfer their earnings into their preferred accounts, the suit maintains.
“Walmart made false promises, illegally opened accounts and took advantage of more than a million delivery drivers,” said Rohit Chopra, director of the Washington, D.C.-based CFPB. “Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees.”
In response to Progressive Grocer’s request for comment, Walmart emailed the following statement: “The CFPB’s rushed lawsuit is riddled with factual errors and contains exaggerations and blatant misstatements of settled principles of law. The CFPB never allowed Walmart a fair opportunity to present its case during their rushed investigation. We look forward to vigorously defending the company before a court that, unlike the CFPB, honors the due process of law.”
Branch has also denied wrongdoing, according to published reports.
Each week, approximately 255 million customers and members visit Walmart’s more than 10,500 stores and numerous e-commerce websites in 19 countries. With fiscal year 2024 revenue of $648 billion, the retailer employs approximately 2.1 million associates worldwide. Bentonville, Ark.-based Walmart U.S. is No. 1 on Progressive Grocer’s 2024 list of the top food and consumables retailers in North America. PG also named Walmart one of its Retailers of the Century.
