Walmart and Branch Messenger Face Lawsuit Over Alleged Misconduct
The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Walmart and Branch Messenger for allegedly forcing delivery drivers to use costly deposit accounts for pay reimbursement and misleading workers about how they could access their earnings.
Allegations Against Walmart and Branch
According to the lawsuit, Walmart and Branch opened Branch accounts for last-mile Spark drivers and deposited pay into these accounts without the drivers’ consent. Spark consists of independent drivers who work with Walmart to fulfill delivery requests. Furthermore, Walmart told Spark drivers that using Branch was a requirement to get paid and that those who refused would be terminated.
The lawsuit also alleged that Walmart and Branch misled workers about the availability of same-day access to earnings. Drivers had to follow a complex process to access their funds and faced further delays or fees if they needed to transfer money into a different account, resulting in workers paying more than $10 million in fees to transfer earnings.
Illegal Activities Alleged Against Branch
The CFPB also alleged that Branch engaged in a number of illegal activities related to consumer accounts. These include:
- Failing to investigate alleged errors
- Failing to honor stop-payment requests
- Failing to maintain necessary records
- Failing to provide certain disclosures
- Illegally requiring consumers to waive their rights under the law
CFPB’s Authority and Role
The CFPB has the authority to take action against institutions violating consumer financial protection laws, including the Truth in Savings Act, the Electronic Fund Transfer Act, and prohibitions on unfair, deceptive, or abusive acts or practices under the CFPA.
Walmart’s Response
Walmart has not responded to a request for comment.
Recent Improvements to Worker Benefits at Walmart
In 2024, Walmart improved worker benefits. In June, the big-box retailer announced that Walmart associates would have access to an associate-to-technician pipeline program, in addition to more skills certificates. A new bonus program allows hourly store workers to earn up to $1,000 in bonuses a year, and new features in the Me@Walmart app give associates easier access to their pay, discounts, learning opportunities, and benefits.
Store managers now receive an annual grant of company stock, which could be worth as much as $20,000 annually, depending on the size of the store. A new compensation plan, also announced last year, includes a pay raise and redesigned bonus plan.
Impact of the Lawsuit
The lawsuit filed by the CFPB against Walmart and Branch Messenger highlights the importance of protecting workers’ rights and preventing unfair business practices. The allegations made in the lawsuit demonstrate how companies can take advantage of workers, and the need for regulatory agencies to hold them accountable.
As the case continues to unfold, it will be interesting to see how the courts rule on the allegations made against Walmart and Branch Messenger. In the meantime, it is essential for workers to remain aware of their rights and to report any suspicious activity to the relevant authorities.
Conclusion
The lawsuit filed by the CFPB against Walmart and Branch Messenger serves as a reminder of the importance of protecting workers’ rights and preventing unfair business practices. As the case continues to unfold, it will be interesting to see how the courts rule on the allegations made against the companies involved.
In the meantime, it is essential for workers to remain aware of their rights and to report any suspicious activity to the relevant authorities. By working together, we can ensure that workers are treated fairly and with respect, and that companies are held accountable for their actions.
Recommendations
- Workers should be aware of their rights and should report any suspicious activity to the relevant authorities.
- Companies must be held accountable for their actions and must comply with consumer financial protection laws.
- Regulatory agencies must continue to work to protect workers’ rights and prevent unfair business practices.
By following these recommendations, we can ensure that workers are treated fairly and with respect, and that companies are held accountable for their actions.
