NEW YORK (AP) — The Consumer Financial Protection Bureau has filed a lawsuit against retail giant Walmart and work scheduling platform Branch Messenger for allegedly compelling delivery drivers participating in Walmart’s gig program to utilize costly deposit accounts for payment and for providing misleading information on how drivers could access their earnings.
The agency’s claims, made public last week, assert that for a period of approximately two years starting in 2021, Walmart and Branch Messenger violated federal law by requiring 1 million drivers enrolled in the retailer’s Spark program to use Branch Messenger for payment, threatening termination for those who refused to comply. Walmart’s Spark program employs gig workers responsible for making deliveries from Walmart stores across the country, primarily focusing on “last mile” deliveries.
The Consumer Financial Protection Bureau further alleges that Walmart and Branch Messenger deceived workers regarding the immediate accessibility of their wages. It was disclosed that drivers were subjected to a convoluted process to retrieve their funds, and upon doing so, encountered additional delays or charges when attempting to transfer their earnings to an account of their choosing. As a consequence of these practices, drivers reportedly incurred over $10 million in fees, according to the agency.
CFPB Director Rohit Chopra condemned Walmart’s actions, stating, “Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers. Companies cannot force workers into receiving payment through accounts that deplete their earnings with unwarranted fees.”
Responding via email to The Associated Press on Friday, a Walmart spokesperson criticized the lawsuit as “rushed” and accused it of containing factual inaccuracies, exaggerations, and misinterpretations of established legal standards. The spokesperson contended, “The CFPB failed to grant Walmart a fair chance to present its case during their hasty investigation. We anticipate vigorously defending the company in a court that upholds the due process of law, unlike the CFPB.”
In a separate statement sent to The AP, Branch Messenger, headquartered in Minneapolis, expressed strong disagreement with the lawsuit brought forth by the CFPB. The company asserted that the lawsuit distorts both legal statutes and factual details, deliberately omitting pertinent information to conceal what Branch deemed as the bureau’s authoritative overreach. The statement highlighted the valuable services Branch Messenger provided to Walmart and its driver partners, enabling expedited and convenient access to funds through business accounts—a crucial detail purportedly absent from the bureau’s official communication.
The legal dispute between the CFPB, Walmart, and Branch Messenger underscores the growing scrutiny faced by companies utilizing gig economy workers and the financial implications of such arrangements. As public attention on labor practices intensifies, the outcome of this lawsuit may have significant ramifications for the treatment of gig workers and the accountability of corporations in ensuring fair compensation practices.
