FTC and States Secure $100M Judgment Against Walmart for Deceptive Earnings Claims

Detected February 27th, 2026

Summary

The FTC and 11 states have secured a $100 million judgment against Walmart to settle allegations of deceptive earnings claims made to delivery drivers in its Spark Driver program. The company allegedly misled drivers about base pay, incentives, and tips, causing drivers to lose tens of millions of dollars.

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What changed

The Federal Trade Commission (FTC) and 11 states have finalized a $100 million judgment against Walmart to resolve allegations that the company engaged in deceptive practices concerning earnings for its Spark Driver delivery program. The FTC's complaint detailed how Walmart allegedly inflated base pay and tip amounts shown to drivers and falsely claimed that 100% of customer tips would go to drivers. This action is part of the FTC's Joint Labor Task Force aimed at combating unfair labor-market practices.

This settlement imposes a significant financial penalty on Walmart and highlights the FTC's commitment to ensuring truthful information in labor markets. Companies utilizing gig workers or making earnings claims to potential employees should review their advertising and payment practices to ensure compliance with consumer protection and labor laws. Failure to provide accurate information about compensation, including base pay, incentives, and tips, can lead to substantial penalties and enforcement actions.

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Consumer Protection
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Bureau of Consumer Protection
Western Region Los Angeles
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Retail
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Payments and Billing
Gramm-Leach-Bliley Act Walmart, Inc. has agreed to a $100 million judgment to settle allegations from the Federal Trade Commission and 11 states that the company caused delivery drivers to lose tens of millions of dollars’ worth of earnings, by deceiving them about the base pay, incentive pay and tips they could earn.

Joined by Arizona, California, Colorado, Illinois, Michigan, North Carolina, Oklahoma, Pennsylvania, South Carolina, Utah and Wisconsin, the FTC alleged in its complaint **** that Walmart showed drivers in its Spark Driver delivery program inflated base pay and tip amounts. In addition, the complaint alleges that Walmart deceived customers by falsely claiming that 100% of customer tips would actually go to drivers.

“Labor markets cannot function efficiently without truthful and non-misleading information about earnings and other material terms,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “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.”

Today’s action aligns with the FTC’s Joint Labor Task Force launched by Chairman Andrew N. Ferguson in February 2025. The Commission created the cross-agency Labor Task Force to root out and prosecute deceptive, unfair, and anticompetitive labor-market practices that harm American workers. Noting that the FTC’s dual consumer-protection and competition mandate makes the agency uniquely well-suited to address these worker harms, Chairman Ferguson’s Labor Task Force harnesses expertise from the agency’s Bureau of Consumer Protection, Bureau of Competition, Bureau of Economics, and Office of Policy Planning. Today’s settlement is a product of those efforts.

Walmart uses its Spark Driver service to deliver goods to customers using gig workers via the Spark Driver app. Those workers decide whether to accept “offers” to deliver orders, based on Walmart’s statements about the base pay and tips that a driver can expect to receive if they complete the work.

The complaint alleges that Walmart engaged in several deceptive practices related to its Spark Driver service, including:

Deceiving drivers about the amount of tips they will receive from an order. The company failed to notify drivers that, unlike the payment for the goods being delivered, the payment for the advertised tip amount had not been preauthorized, and therefore drivers would not receive that amount if the customer was unable to cover the cost of the tip or if the charge otherwise failed. The company also failed to inform drivers that it would split tips when a customer’s delivery was split across multiple drivers.
Deceiving drivers about the amount of base pay and tips they will receive when Walmart modifies “batched” offers. The company failed to inform drivers that it will reduce their base pay and/or tips when it removes orders from “batched orders,” which involve delivering goods to multiple customers during one trip. In many instances, Walmart either failed to notify drivers at all about the change in base pay and tips or only notified them of the change in their earnings after they completed the delivery.
Misrepresenting the incentive pay drivers can earn in exchange for completing certain tasks. The company failed to disclose all the conditions that must be met to earn the promised incentive pay for completing certain tasks and denied the promised earnings on the basis that drivers failed to meet all the conditions. For example, Walmart has offered to provide drivers a referral incentive when they refer new drivers to the service yet failed to adequately disclose that it will only pay the incentive if the newly recruited driver performed deliveries in a particular zone or for a particular store. Even when drivers meet the incentive conditions, Walmart sometimes failed to provide the promised incentive pay.
Deceiving consumers that “100% of tips go to the driver.” Despite this promise, Walmart, on multiple occasions, failed to provide collected tips to drivers as promised and did not refund the tip to customers either. The FTC alleges that these practices violated the FTC Act and the Gramm-Leach-Bliley Act—by obtaining drivers’ bank and other financial information while deceiving them about the amount base pay and tips they will earn from Spark Driver deliveries—as well as laws of the agency’s state partners.

As part of the proposed order , Walmart is:

Required to implement an earnings verification program to ensure drivers are paid the promised earnings and tips;
Prohibited from modifying an offer for base and incentive pay or tips after the initial offer except under limited circumstances such as when the driver fails to provide the required service or the customer cancels an order; and
Banned from misrepresenting the earnings and other information included in the delivery offers it makes to Spark drivers. The Commission vote authorizing the staff to file the complaint and proposed stipulated final order was 2-0. The complaint and stipulated final order were filed in the U.S. District Court for the Northern District of California. FTC Chairman Andrew N. Ferguson and Commissioner Mark Meador issued a joint statement.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by the District Court judge.

The lead staffers on this matter include Aaron M. Schue, Jordan Navarrette, Miles Freeman, David Hankin and Barbara Chun with the FTC’s Western Region Los Angeles office.

The Federal Trade Commission works to promote competition and protect and educate consumers. The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.