Walmart – Taking Food From the Mouths of Babies

Walmart knows no bottom. I have railed about Walmart for a long time and have refused to ever shop there. Their latest outrage is screwing their “last mile” drivers, called the Spark Driver program, out of their pay. Wage theft is a major problem in the United States, costing American workers at least $50 billion per year.

Employers steal more wages from employees than all robberies, burglaries, and motor vehicle thefts combined. I recently represented such a case in which the company, south of Casa Grande but based in CA, not only had a horrific workplace culture but underpaid its drivers and forced them to use a certain portal with a debit card to get their pay – the same as Walmart was doing. When the local company refused to respond to my demand for his stolen pay, I thought the CA parent would. I was wrong.

So, I filed with the Arizona Wage and Hour division for wage theft. When they finally got around to sending the complaint to the AZ company, the company immediately sent him a check for the stolen amount. He had, in the meantime, quit that job and got a much better one. But the stolen money was very welcome, especially around Christmas.

The Consumer Financial Protection Bureau (CFPB) sued Walmart on December 23, 2024, in the U.S. District Court for the District of Minnesota where Branch, the bank they were using, is headquartered for screwing over a million drivers out of their pay. The suit (Case number 24-cv-04610) alleges that the typical Spark Driver is a low-income woman with children and no college degree. The main use of the debit card was for groceries.

Prior to July 2021, the drivers decided where to have their pay deposited. Other Spark Driver programs allowed their drivers to collect their pay daily after every job. If you have ever lived paycheck to paycheck, which I have, you know how vital it might be to get paid that day. With Branch, there were sometimes weeks-long delays before workers could access their money. When drivers complained they had not been paid, Walmart sent them to Branch and said take it or leave it.

Locking drivers out of their earnings

According to the complaint, hundreds of thousands of dollars were never claimed because the drivers could not access their accounts. The money went back to Walmart, and workers got screwed. Branch sometimes closed accounts and locked drivers out of the money they had already earned and returned that money to Walmart. Branch is not FDIC insured and works only with large companies, not human beings.

Branch charged 2% or $2.99 for an instant transfer. Most drivers asked for instant transfer to get their much-needed money. They could link their account, but it would take up to 5 days, cost money, and require their personal information to go to yet another institution. There was a third option without a fee that still took 5 days, but drivers were not told about that one.

Both options 1 and 2 limited how much drivers could transfer of their own money. If they asked for a debit card, that was delayed. Branch charged $2 for each cash withdrawal, the workers couldn’t write checks, and they could not make deposits unless they paid a fee for that too! Because they couldn’t write checks, they couldn’t pay rent on time.  Because of the limits on withdrawals, they could not withdraw enough to pay rent in another way.

Their accounts were labeled by Branch as “business” since the drivers allegedly were independent contractors.  As a “business” account, they can’t use it for personal, family, or household purposes, though the main purchases were groceries, pharmacy, and clothing. “Business” accounts charge more for transfers and interchange rates from merchants are higher on “business” accounts. Business accounts are also not entitled to consumer protection laws.  

Allegedly, Walmart lied about the accounts to say they would be free, and drivers have instant access and same-day pay. Allegedly Branch lied about free transfers to another account. Branch allegedly violated the Electronic Funds Transfer Act (EFTA) in many different ways. 

Imposing an illegal peonage

According to the complaint, both Walmart and Branch engaged in abusive acts or practices, took advantage of the drivers, used unfair account opening and funding practices, and made deceptive statements. Branch allegedly violated EFTA rights, failed to investigate errors, failed to stop payment, failed to provide disclosures properly, and failed to maintain records.

The CFPB asked for a court order to stop both from doing the wrongful activities, award refunds, disgorge the wrongfully obtained monies, pay damages to the victims, and award CFPB civil money penalties and costs.

Walmart illegally gave workers’ personal information to open Branch Messenger accounts without the workers’ consent and then deposited their pay into those accounts. Walmart told their drivers they had to “sign up” for their “magic link” to “claim” their account that held their own money. If they did not agree, they were terminated. 

For those who did access the accounts, over two years, drivers paid over $10 million to the bank in fees to transfer their already earned pay to their own bank accounts. The transfers would take several days while, in the meantime, Branch was earning interest on the workers’ money.

Employers cannot withhold your pay and then force you to continue working for them to get your money. That is called peonage, which is illegal under federal law. The peonage law was passed after the Civil War when southern employers used debt bondage to re-enslave African Americans.

Let your local Walmart manager know what you think of this behavior.  Nationally, go here to report your concerns:

https://one.walmart.com/content/walmartethics/en_us/report-a-concern.html

Consumer shenanigans are also afoot. Just before this lawsuit, the CPFB sued JP Morgan Chase, Bank of America, Wells Fargo, and Zelle (headquartered in Scottsdale) for the three banks’ failures to protect consumers from fraud by Zelle.  Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).  Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov. To learn more about reporting potential industry misconduct, visit the CFPB’s website.

But file any complaint or send any information quickly because, under the incoming administration, CFPB powers will no doubt be curtailed.

In contrast to Walmart, Costco rebuffed a request from shareholders to ditch DEI.  They said a balanced and fair workforce was an important asset, and they are sticking with it.  Go Costco.