Lawsuit: Walmart Misclassified Contract Delivery Drivers
Walmart and a delivery subsidiary are facing a class-action lawsuit led by a former Spark driver who claims he and other couriers were misclassified as independent contractors and denied proper wages and benefits.
In a Washington State superior court, plaintiff Joshua Walz filed the suit on Nov. 27 against the retail giant, his former supervisor Ashley Hatfield and Delivery Drivers, Inc. (DDI), the Walmart-owned driver recruiting and management firm.
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As a result of the alleged misclassification, the defendants failed at times to pay the drivers at least the hourly state minimum wage. Delivery drivers were not compensated for the time they spent driving between locations, waiting for orders to be ready at stores, making returns or calling Spark’s support team, Walz alleges.
Walmart disputes the allegations, according to spokesperson Kelly Hellbusch.
“[We] believe that drivers who choose to use the Spark Driver platform are properly classified as independent contractors,” Hellbusch said. “We will continue defending the company against this litigation.”
Walz also claims the defendants neglected to provide other benefits including tips and gratuities, paid sick leave, 30-minute meal breaks and time-and-a-half overtime compensation for every hour worked beyond a 40-hour workweek.
According to the complaint, employees were paid weekly through a DDI-operated app called Branch, which tracked the total pay each driver made daily. But this app failed to record hours worked, rates of compensation and other wage details—another factor in what the plaintiff claims led to a failure to compensate for all time worked.
The plaintiff claimed the compensation shortfall was “not the result of administrative or clerical errors.”
Referring to the control exerted over contractors, the suit also indicated that “defendants had the ability to set terms and conditions of employment of plaintiff and members of the putative class to a substantial degree and all had the ability to hire and fire.”
This control extended to Walmart’s requirements that contractors use their own car and pay for their own gas, auto maintenance, insurance and cell phone without any reimbursement—despite the plaintiff’s claims that all these expenses are necessary to perform their job.
The complaint also said that the retail giant imposed certain vehicle requirement, and that employees could report delivery drivers for not meeting these criteria.
Among other allegations, Walz said drivers were required to undergo unpaid training to learn how to make deliveries using the Spark mobile app.
When they log into the Spark app, drivers can pick from one to seven order options, which state the distance of the delivery, the size and a flat pay rate for each delivery—all calculated by an algorithm. Once a driver receives a delivery request on the Spark app, they have up to 3 minutes to accept the order.
After selecting a delivery, drivers are directed to a Walmart location to pick up the order, where deliveries are loaded into their vehicles under strict supervision and procedures, according to the suit.
The case claims that drivers face suspension from delivering to certain store locations or even deactivation from the Spark app if they fail to meet the defendants’ regulations. Walz was permanently banned from the Spark program in September 2022 after a second deactivation.
The plaintiff is seeking damages for unpaid wages in amounts to be proven at trial, as well as exemplary damages for himself and all class members, which would double if found to violate the Washington Wage Rebate Act. Across the board, the suit claims the defendants also violated numerous other Washington laws, including the Industrial Welfare Act, the Minimum Wage Act and the Wage Payment Act.
The delivery workers’ employer-contractor relationship has frequently been under contention this year.
Dozens of workers at a former Amazon-contracted delivery company, Battle-Tested Strategies (BTS), unionized earlier this year after the e-commerce giant terminated the relationship. While Amazon has said that the workers were never official employees of the company, the contractors have picketed dozens of warehouses nationwide alleging unfair labor practices related to worker safety.
And last month, a former FedEx delivery contractor filed a lawsuit claiming the package delivery giant violates anti-racketeering laws by exercising the same level of control over contractors as it would over employees. The plaintiff, Pynq Logistics Services, said it could also pursue the case as a class-action lawsuit.
Anyone in Washington who is currently or formerly contracted directly by the defendants to provide delivery services to Walmart at any time since Oct. 23, 2020 is eligible to join the class-action suit.
Despite the suit, Walmart’s Spark delivery network is booming. Third-party drivers using the service tripled from June 2022 to June 2023, covering 84 percent of U.S. households with 17,000 pick-up points.
