Texas hits Walmart with $13M settlement over delivery driver pay

Walmart has agreed to pay more than $13 million and overhaul how it communicates pay to delivery drivers in Texas, resolving a state investigation that alleged the retailer misled workers about tips, base pay and incentive earnings through its Spark Driver platform.

The settlement, announced Monday by Texas Attorney General Ken Paxton, provides approximately $6. 69 million in restitution to affected Texas Spark drivers while requiring Walmart to pay an equal amount in civil penalties, attorneys’ fees and costs to the state. In total, the agreement exceeds $13. 3 million.

The settlement resolves allegations that Walmart violated the Texas Deceptive Trade Practices Act through its Spark Driver Program, which provides same-day grocery and merchandise deliveries from Walmart stores and warehouses. Walmart denied any wrongdoing and said the agreement does not constitute an admission of liability.

Spark is Walmart’s (Nasdaq: WMT) last-mile delivery platform, connecting independent contractors with grocery and merchandise delivery opportunities from local Walmart stores.

According to the Assurance of Voluntary Compliance filed in Collin County, Texas, investigators alleged Walmart made misleading representations to delivery drivers dating back to at least 2021 involving three primary categories of compensation: customer tips, base pay and incentive bonuses.

The state alleged Walmart sometimes promised drivers they would receive the full customer tip on deliveries that were later split among multiple drivers, reducing the actual amount received.

Investigators also claimed Walmart modified or removed deliveries from accepted batches without notifying drivers, reducing both expected tips and base pay after offers had already been accepted. The investigation further alleged the company misrepresented the requirements drivers needed to meet to qualify for incentive payments.

Under the agreement, Walmart generally cannot reduce a driver’s promised earnings after an offer has been accepted except under specified circumstances, such as customer-requested order changes, or driver cancellations.

The company also agreed not to misrepresent estimated earnings, customer tips, incentive opportunities or other material aspects of delivery offers. The retailer also must operate an earnings verification program designed to ensure drivers receive the compensation displayed when they accept delivery offers.

The program requires annual assessments, documentation of any underpayments, remediation efforts and reporting to Texas regulators for 10 years. It remains unclear how many Texas Spark drivers were affected by the alleged compensation practices or whether any unpaid restitution remains available.

Neither the settlement agreement nor the Texas Attorney General’s announcement identifies the number of eligible drivers or outlines a process for drivers to determine whether they qualify for compensation. The post Texas hits Walmart with $13M settlement over delivery driver pay appeared first on FreightWaves.