NEW YORK (AP) — The Consumer Financial Protection Bureau has filed a lawsuit against retail giant Walmart and work scheduling platform Branch Messenger, accusing them of compelling delivery drivers participating in Walmart’s gig program to utilize expensive deposit accounts to receive payment and misleading them about their access to wages.
The agency’s allegations, lodged last week, assert that for a span of approximately two years commencing in 2021, Walmart and Branch contravened federal law by mandating that 1 million drivers enrolled in its Spark program use Branch for payment. The lawsuit contends that workers who declined to utilize these accounts faced termination. Walmart’s Spark program engages gig workers responsible for executing deliveries from Walmart outlets across the nation, focusing on so-called “last mile” deliveries.
The CFPB further asserts that Walmart and Branch provided deceptive information to workers regarding the immediacy of accessing their earnings. According to the suit, drivers were required to navigate a convoluted process to retrieve their funds, and upon doing so, encountered additional delays or fees if they sought to transfer their earnings to an account of their choosing. The agency indicates that this practice led to workers being charged in excess of $10 million in total fees.
CFPB Director Rohit Chopra denounced the alleged actions, stating, “Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers. Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees.”
Responding to the lawsuit in a statement to The Associated Press, a Walmart spokesperson criticized the legal action as rushed and replete with factual inaccuracies, exaggerations, and misinterpretations of established legal principles. The spokesperson asserted, “The CFPB never allowed Walmart a fair opportunity to present its case during their rushed investigation. We look forward to vigorously defending the company before a court that, unlike the CFPB, honors the due process of law.”
Branch Messenger, headquartered in Minneapolis, expressed disagreement with the CFPB’s lawsuit in an email statement to The AP, contending that the suit misrepresents both the law and the facts, and involves intentional omissions to conceal what the company perceives as the bureau’s overreach. The statement from Branch emphasized the services it provides to Walmart and its driver partners, facilitating swift and convenient fund access through business accounts, a detail which Branch claims the bureau’s press release omits.
