ICs Head to Court to Win Unpaid Commissions

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The Me Too movement shows the power of speaking in unison—and in the travel industry, ICs are taking note. After months of waiting for back commissions from agencies that were not paying, and despite efforts to discredit and intimidate them, travel advisors in Canada and the United States have been speaking up and fighting back—and finally, winning.

Inspired by other travel advisors who were owed commissions by their host, Denise Hanuska on December 11 sued National Travel Associates/The Destination Experts in Nova Scotia Small Claims Court, docket number SCK 493212. She was awarded $9,361.11 in unpaid commissions and sales tax. And on January 10, Nicole Kavanaugh and Renee Winsor won their cases—and were awarded not just their back commissions, but also the maximum allowed under the law for pain and suffering. 

In another case in Canada, an agent is proceeding to litigation to recover more than $10,000 in commissions owed after she changed host agencies.

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On Facebook pages and through private messages to the press, travel advisors are sharing tales. In the United States, independent contractors are chattering about an agency that recently closed, and its owner, who opened a new business on Facebook while still deeply in debt to her ICs. And while the agencies can pooh-pooh and harass a single person into silence—as some travel advisors say they have been doing for years—the chorus of a few brave agents is finding it can get things done.

In the Hanuska case, Nexion Canada took over the open 2019 and 2020 bookings as National Travel Associates/The Destination Experts folded, and paid the commissions that were due on them—but not the $9,361.11 still owed in 2018 commissions and sales taxes, or commissions on a number of destination weddings Hanuska was owed for which NTA may never have even followed up. 

Similar Stories Show a Pattern 

Interestingly, all the ICs interviewed for this story asked that we not share their names or that of their agencies. Some happened 10 or even 20 years ago but some are much more recent—and in any case, the victims are still concerned about harassment or countersuits. And indeed, one is proceeding to court, so on top of lost commissions she now is paying legal fees to defend herself.

Like most tales of scams and abuse, the stories have many elements in common. They usually begin “I was new to the industry and I signed on with an agent who said she would help me. Things went fine in the beginning, when my bookings were low and my commissions were small. Over time I noticed other ICs were leaving, and understood it was over arguments regarding commissions not paid. But I did not want to risk losing the commissions I already was owed. I contacted the owner and she paid me some of the back money, though never all of it. Then one day I started talking to other ICs, and we realized the extent of the damage.”

Perhaps most surprising is how long the ICs waited before switching agencies. For some it is a sign of friendship with the ICs they leave behind, and even with the owner who stiffed them. For others it is fear of reprisals. For many it is both. 

“We don’t want to bad-mouth them, we just want to be paid and move on. We have not even told our consortium,” said one. 
“I am a little afraid to leave my office at night,” said another.

Small claims court is a good option for ICs who live near their agency’s headquarters, as costs are low and no attorney is required. Inspired by another agent who won her case and by a lawyer with whom she consulted, Hanuska got her information together and represented herself. The defendant did not show up or present any defense, and she won the case. 

Even though the agency is out of business, if the defendant does not pay up, Hanuska can ask for an execution order to garnish her bank account or put a lien on her property, she says.

Things are more difficult if you live far away, however. In the U.S., one group of ICs owed money by an agency in New Mexico has found that “while Small Claims Court is an option, it requires going to New Mexico, and all the agents involved are on the East Coast.”

“We as a group are still fighting for all of our money,” one IC in that case says. “We have contacted every supplier. We have contacted our consortium, the Better Business Bureau and the Attorney General of New Mexico, where the host agency is based. But no one wants to get involved. 

“I am appalled that this seems to happen often; I am questioning whether I want to be in this business anymore. There are no regulations or protections for agents. It is so easy to steal from us.”

Indeed, it is rare for ICs to fight back. Tammi Ruffini, who is owed “probably more than anyone” by NTA, says she is just writing off the loss as a lesson learned. 

Ruffini has moved on and for the first time has opened her own agency, with 13 ICs. “I let the drama consume me for a very short period of time and then I said, ‘I have agents relying on me to build my business; I have clients to take care of; I have eight destination weddings and so many groups. I don’t have the energy for this stress, and I think it would be a waste of time anyway.’ So I decided to just concentrate on my business and move forward.”

Still, though, she says, “should the money fall into my lap, I sure wouldn’t mind.”

Tips for Travel Agents

So what’s an agent to do to ensure commissions come to where they belong? Here are some tips from those who have been there.

  1. Choose your host agency very carefully. Being a travel advisor is a business, not a hobby. Do your homework. Speak to current and past ICs; ask those who have switched why they did so. And if someone—or especially if a group—leaves soon after you arrive, call them up and ask why.
  2. Before signing on with a host agency, ask to see their books, suggests Kim Kellar, president of Cohasset Travel Inc. in Massachusetts. Visit the home office often; “you can learn a lot from eye contact.” Be sure you have a signed contract that outlines the payment schedule and clearly defines the process for leaving if there are issues.
  3. Always run the contract past a lawyer before you sign it, and beware of any changes made from one year to the next. One agent noted that in her original contract, ICs were required to have their lawyer sign off on it, to prove they had legal advice before joining up. She should have seen the warning sign when the clause was removed the next year, she says.
  4. Be careful about tracking your commissions, and understand the process. Working in the head office at NTA as well as booking her own customers, Ruffini saw many errors in the booking system, some in favor of the ICs and some in favor of the agency. Assume responsibility for tracking your own money; know when each commission payment is due and use a spreadsheet to track that it arrives in a timely manner. 
  5. Don’t hesitate to take action when you are not paid. As soon as your first commission is late, contact the supplier to see if it was paid to the host. Approach your consortium; though they may not be helpful at first, they want to be aware of what is going on and may be able to work behind the scenes. Signature Travel Network, for example, made headlines in the travel press this fall by asking its members to please report any suppliers who are delinquent on their payments immediately. “If you see something, say something,” said both CEO Alex Sharpe and VP Phil Cappelli
  6. As soon as it becomes a pattern, get out. “I wish I had walked away when things were starting to slow down. But it’s a really hard thing to do, because you have booked clients and you’re not sure they will be looked after,” says one agent. Still, “If your gut tells you the owner isn’t being honest...run! Don’t wait until you have a lot of money invested, because it makes it harder to leave.”

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