Consumer protection agency sues Walmart, Branch alleging illegal pay practices for gig drivers

NEW YORK (AP) — The Consumer Financial Protection Bureau has sued Walmart and work scheduling platform Branch Messenger for allegedly forcing delivery drivers that are part of the discounter’s gig program to use costly deposit accounts to get paid and mispresented how they could access their wages.

The agency alleged last week that for approximately two years starting in 2021, Walmart and Branch violated federal law by forcing 1 million drivers on its so-called Spark program to use Branch to get paid and that they would terminate workers who didn’t want to use these accounts. Walmart’s Spark program uses gig workers who make deliveries from Walmart stores nationwide on so-called “last mile” deliveries.

CFPB also claims that Walmart and Branch misled workers about the availability of same-day access to their earnings. It said that the drivers had to follow a complex process to access their funds, and when they finally did, they faced further delays or fees if they needed to transfer the money they earned into an account of their choice.

The practice resulted in workers paying more than $10 million in fees, the agency said.

“Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers,” said CFPB Director Rohit Chopra in a statement released Dec. 23. “Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees.”

In a statement emailed to The Associated Press on Friday, a Walmart spokesperson called the lawsuit “rushed” and said it was ”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,” the statement said. “We look forward to vigorously defending the company before a court that, unlike the CFPB, honors the due process of law.”

Branch, based in Minneapolis, said in an emailed statement to The AP that it strongly disagrees with the lawsuit filed by the CFPB, which Branch said misstates the law and facts, and includes intentional omissions to mask the bureau’s clear overreach.

“Branch has provided Walmart and their driver partners valuable services allowing quick and easy access to funds via their business accounts—a key fact the bureau’s press release omits,” the statement said.