FTC’s lawsuit against Walmart carries warning for gig workers

The FTC’s lawsuit and $100 million settlement with Walmart over its Spark Driver program is a signal that gig platforms broadly can face enforcement if they mislead workers about pay, tips, or incentives.

What Walmart did, according to the FTC

• Walmart allegedly showed Spark drivers inflated estimates of base pay and tips for individual offers in the app while quietly reducing pay when orders were split, modified, or reassigned (“batched” orders).

• The company allegedly failed to clearly disclose all conditions for incentive pay (for example, recruiting new drivers) and sometimes did not pay incentives even when drivers met the conditions.

• Walmart allegedly promised that drivers would receive 100% of customer tips but at times did not pass along collected tips or split tips among multiple drivers while still displaying the full tip amount to each driver.

As a result, drivers allegedly lost millions in expected earnings.

The settlement terms and new obligations

• Walmart agreed to a $100 million judgment with the FTC and 11 states; about $79 million is expected to go directly to affected drivers, with the rest covering additional relief and penalties.

• Walmart must implement an earnings verification program to ensure drivers are actually paid the base pay, tips, and incentives they are promised in app offers.

• It is prohibited from changing the base or incentive pay or tips shown in an offer after a driver accepts, except in narrow situations like cancellations or failure to perform the job.

• Walmart is barred from misrepresenting any aspect of driver earnings or tip flows in Spark offers and must maintain compliance systems and audits around gig worker pay.

The FTC and states brought the case under Section 5 of the FTC Act, the Gramm-Leach-Bliley Act, and state consumer protection statutes.

Why this matters for gig workers in general

• The FTC has explicitly framed this as a labor-market case and highlighted a Labor Task Force focused on worker protections and pay transparency, not just consumer-facing conduct.

• In public guidance tied to this case, the agency emphasized that companies offering gig work “have to tell the truth” about earnings, including pay structures, incentives, and tip policies, and that deceptive claims can lead to enforcement and restitution.

• The settlement effectively sets a baseline expectation that gig platforms must:

  • give accurate, upfront pay and tip information in offers,

  • avoid post-acceptance changes that reduce pay,

  • disclose any pooling, splitting, or conditionality on tips and bonuses, and

  • maintain systems to detect and fix underpayments.

Other gig platforms (delivery, rideshare, task apps) that rely on in-app “offer” estimates and complex batching or pooling logic face increased risk if those systems systematically cause workers to earn less than what is presented when they decide whether to accept gigs.

Practical takeaways for gig workers

• Scrutinize pay offers: Take screenshots of pay and tip estimates for each job and compare them to what you actually receive, especially for batched or shared orders.

• Look for hidden conditions: Check whether bonuses or incentives require specific tasks, timelines, or performance thresholds and whether those are clearly explained in the app or terms.

• Track tip handling: If a platform claims “100% of tips go to drivers,” note any discrepancies between what you and customers see; tip pooling or splitting should be clearly disclosed.

• Report deceptive earnings claims: The FTC is inviting reports about misleading gig-pay claims through ReportFraud.ftc.gov and has used worker complaints as a basis for this and similar actions.