Walmart To Pay $100 Million To Settle FTC Claims Over Deceptive Delivery Driver Pay Practices - 1-800-Flo

Walmart (NYSE:WMT) will pay a $100 million to settle a lawsuit that accuses the U.S. retailer of misleading its delivery drivers about their compensation, causing substantial income loss.

The Federal Trade Commission (FTC) and 11 states lodged a case against Walmart, alleging the retailer misled its workers about their base pay, incentive pay, and possible tips. The FTC’s announcement indicated that the allegations specifically targeted Walmart’s Spark Delivery network, operational since 2021.

Launched in 2018, the Spark Program allows gig workers to complete deliveries for Walmart and other retailers, including Home Depot Inc. (NYSE:HD) and 1-800-Flowers.com Inc. (NASDAQ:FLWS).

The FTC also accused Walmart of misleading customers by claiming that 100% of tips would go directly to drivers. According to the complaint, despite being aware of the problems, the company failed to address them, allegedly violating FTC rules, federal law, and multiple state statutes.

Walmart Bonuses Amid FTC Fallout

This settlement comes amid last week’s report that Walmart announced a reward for its corporate staff with above-target bonuses, earlier this week, paying U.S. corporate employees 121% of their eligible bonuses next month. This generous payout contrasts starkly with rivals like Home Depot. The payout is nearly in line with last year's 122%, and bonuses at Walmart can climb as high as 125%, depending on both individual and company performance, suggested the report.

Notably, just a few days after Walmart lost the top spot in the Fortune 500 list to Amazon.com Inc. (NASDAQ:AMZN) for the first time in 13 years. Despite this, Walmart’s total revenue for the recently concluded fiscal year was $713.2 billion, marking a 4.7% increase from the previous year.

Notably, Amazon also made a $2.5 billion FTC lawsuit settlement in November, over allegations that it misled millions into joining its Prime subscription and then made cancellation difficult. The settlement provides for $1 billion in penalties and $1.5 billion in customer restitution, with eligible users projected to receive about $51 each.

Benzinga's Edge Rankings place Walmart in the 93rd percentile for quality and the 78th percentile for momentum, reflecting its strong performance in both areas. Benzinga’s screener allows you to compare WMT’s performance with its peers.

WMT Price Action: On a year-to-date basis, Walmart shares climbed 10.34%, according to Benzinga Pro data. On Thursday, it closed 1.06% lower at $124.42.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image via Shutterstock

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