Walmart allegedly unlawfully established bank accounts for over a million truck drivers, according to the Consumer Financial Protection Bureau.
The businesses established deposit accounts for Walmart's delivery drivers, utilizing their personal data like Social Security numbers, without explicit consent, alleges the regulatory body. Walmart's Spark Drivers, classified as independent contractors responsible for transporting packages from the company's storage facilities to customers' homes, had no choice but to deposit their earnings into Branch accounts, as per the complaint. Since 2021, Walmart warned workers they might face termination if they refused to utilize these accounts, according to the lawsuit.
Claiming access to their earnings followed a perplexing process that occasionally resulted in prolonged delays of up to weeks, the lawsuit declared, despite assurances of instant pay access.
Moreover, the drivers collectively forked out $10 million in imposition fees to move these wages into other bank accounts, asserts the Consumer Financial Protection Bureau (CFPB).
"Businesses cannot coerce employees into receiving pay via accounts that deplete earnings through imposition fees," mentioned CFPB Director Rohit Chopra in a statement.
The complaint characterized a typical SparkDriver as "a woman, has children, does not hold a college degree, and falls under the low-income category."
Walmart contested the CFPB's assertions and vowed to defend its position in court.
"The CFPB's hastily filed lawsuit is plagued with factual inaccuracies and contains distortions and inconsistent statements of settled legal principles," Walmart stated in a response. "The CFPB never afforded Walmart a fair chance to present its side of the story during their hasty investigation. We eagerly anticipate presenting our case before a court that, unlike the CFPB, upholds the due process of law."
Additionally, the CFPB implicated Branch in deceptive advertising and failure to address and rectify errors, among other allegations. Branch also refuted the accusations in the lawsuit and argued that "Branch provides swift and uncomplicated access to funds."
"Despite its comprehensive collaboration with the investigation, the CFPB refused to engage with Branch in any substantial manner regarding this issue, instead opting to file a lawsuit," Branch contended in its statement, claiming that the lawsuit primarily sought "media attention" and "has no basis in law or worker protection."
The lawsuit adds to the mounting demand for more protections and official classifications for gig workers, employed through apps such as Uber, Lyft, and Doordash. Prior to this month, the CFPB under the Biden administration sued JPMorgan Chase, Bank of America, and Wells Fargo for alleged failure to prevent fraud on monetary transfer app Zelle.
Donald Trump, the then-president-elect, was anticipated to select a new CFPB director. The future development of this case remains uncertain, but "much will depend upon whom Trump chooses as CFPB director," mentioned Jaret Seiberg, financial services policy analyst at TD Cowen Washington Research Group, in a previous email to CNN.
CNN’s Jeanne Sahadi contributed to this report.
The establishment of deposit accounts by businesses for their delivery drivers has become a point of contention, with the Consumer Financial Protection Bureau (CFPB) alleging that Walmart coerced its Spark Drivers into using such accounts that charge imposition fees.
The businesses' use of these accounts raises concerns about the protection of gig workers' earnings, prompting calls for more regulations and official classifications for this workforce.
