1,287 results on '"Pestronk, A"'
Search Results
2. The host-IC relationship under Trump.
- Author
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Pestronk, Mark
- Subjects
FEDERAL courts ,PRESIDENTIAL administrations ,BUSINESS travel ,RETAIL industry - Abstract
The article discusses the impact of potential changes in regulations on the relationship between hosts and independent contractors (ICs) in the travel industry under the new Trump administration. It highlights the likely repeal of two Biden administration regulations: the Federal Trade Commission prohibition on noncompetes and the Labor Department's test of employee vs. independent contractor. The absence of federal regulation may lead to varying state laws governing the host-IC relationship, with potential implications for post-termination activities and minimum wages. The article also mentions broader issues such as tariffs, immigration policy, and taxation that could impact the retail travel business. [Extracted from the article]
- Published
- 2024
3. California law on pricing has broad reach.
- Author
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Pestronk, Mark
- Subjects
CREDIT cards ,PRICES ,ATTORNEYS general ,SURCHARGES ,ADMINISTRATIVE fees - Abstract
The article discusses California's Senate Bill 478, also known as the Honest Pricing Law, which requires ads and offers to include the total price to be paid, including all fees, except for government taxes and fees. The law applies to companies inside and outside California that advertise nationwide as long as California consumers can access the advertising. It does not apply to business-to-business quotes or optional services, and it allows for separate listing of mandatory fees as long as the total price is included. The California law differs from the DOT's full-price rule and allows for private lawsuits, including class actions, against violators. [Extracted from the article]
- Published
- 2024
4. The DOT’s new refund rules are here.
- Author
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Pestronk, Mark
- Subjects
CONSUMER protection ,TRAVEL regulations ,PRESIDENTIAL administrations ,TRAVEL agents ,REBATES - Abstract
The Department of Transportation's new refund rules, effective as of October 28, require travel agencies to provide refunds when flights are canceled or significantly changed. The rules define the "merchant of record" as the entity responsible for processing payments, including those made by cash, check, or bank transfer. If an agency is the merchant of record, they must issue refunds even if they no longer hold the client's funds, and airlines must promptly transfer funds to the agency in such cases. Refunds must be provided within seven days for credit card sales and 20 days for other payment methods, with the option to offer credits or vouchers instead. [Extracted from the article]
- Published
- 2024
5. How to prevent IC fraud on suppliers.
- Author
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Pestronk, Mark
- Subjects
LEGAL briefs ,SUPPLIERS - Abstract
The article from Travel Weekly discusses how to prevent IC fraud on suppliers in the travel industry. It highlights common types of fraud, such as unauthorized credit card use and setting up fake frequent flyer programs. The article recommends screening prospective ICs carefully, conducting criminal and credit checks, and closely monitoring reservations for red flags. It emphasizes the importance of setting clear credit card acceptance rules in the standard IC agreement to minimize the risk of fraud. [Extracted from the article]
- Published
- 2024
6. How a host agency can prevent IC fraud.
- Author
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Pestronk, Mark
- Subjects
BACKGROUND checks ,CREDIT ratings ,FRAUD ,LAW enforcement ,LEGAL authorities - Abstract
This article discusses the issue of fraud committed by independent contractors (ICs) against host agencies in the travel industry. The most common types of fraud include ICs depositing client funds into their own bank accounts and not paying suppliers or the host, as well as ICs using their own IATA number to receive all the commission directly. To prevent such fraud, host agencies are advised to carefully screen prospective ICs, have a specific IC contract that prohibits fraudulent activities, and strike a balance between control and the risk of reclassification as an employer. The article also mentions that suppliers hold the host agency responsible for any fraud committed by ICs. [Extracted from the article]
- Published
- 2024
7. Do seller of travel laws affect your ICs?
- Author
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Pestronk, Mark
- Subjects
INDEPENDENT contractors ,GOVERNMENT agencies - Abstract
This article discusses the implications of seller of travel registration laws on independent contractors (ICs) in the travel industry. The author explains that ICs located outside of a state with such laws do not need to qualify for an exemption or register as a seller of travel in that state if they do not sell to clients within the state. However, if an IC is located outside the state but sells to clients within the state, they must qualify for an exemption or register as a seller of travel. The criteria for exemption vary between the states of California, Florida, and Washington. The article emphasizes the need for interpretation of these laws in order to protect consumers and provides a link to further information on exemptions. [Extracted from the article]
- Published
- 2024
8. It’s an agency seller’s market this year.
- Author
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Pestronk, Mark
- Subjects
TRAVEL agents ,PRICES - Abstract
According to the article, there is currently a high number of travel agency owners looking to sell and retire or work part-time. These owners are primarily aging baby boomers who entered the industry about four decades ago. The boom in travel agencies in the early 1980s was due to increased airline commissions and a decision by the Civil Aeronautics Board to allow rebating to corporate accounts. The article suggests that now is a good time to sell, as agency acquisition prices are based on past profits, which have been generally profitable in recent years. After the sale, most buyers will require the seller to stay on as an employee or independent contractor for a period of time to ensure a smooth transition. If the seller wants to continue working as an independent contractor, they may be able to do so under the buyer's agency, but they should not expect to compete with the buyer as an independent contractor for another host. [Extracted from the article]
- Published
- 2024
9. Be wary when client won’t pay with credit card.
- Author
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Pestronk, Mark
- Subjects
CREDIT cards ,LATE payment - Abstract
This article discusses the issue of a travel agency being approached by a potential corporate client who does not or will not use credit cards for payment. The article advises the agency to first ensure that the client understands the need for timely payment. It then suggests evaluating the client's creditworthiness by checking their Dun & Bradstreet Business Credit Report and obtaining references. If the client insists on paying by check, the article outlines six conditions that should be met, including obtaining a security deposit and closely monitoring the client's payments. The article concludes by recommending that these requirements be included in an agreement with the client. [Extracted from the article]
- Published
- 2024
10. Don't share too much with potential buyer.
- Author
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Pestronk, Mark
- Subjects
SUPPLIERS - Abstract
This article discusses the concerns of a travel agency that has been approached by a competitor interested in acquiring them. The agency is worried that the competitor may use the information provided during the acquisition process to compete against them instead. The article advises the agency to disclose less-sensitive information first and gradually provide more as they become more confident in the acquisition. It also clarifies that a nondisclosure agreement (NDA) and a confidentiality agreement are the same thing. [Extracted from the article]
- Published
- 2024
11. When an employee turns competitor.
- Author
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Pestronk, Mark
- Subjects
TRUST ,BUSINESS travel - Abstract
This article discusses the issue of an employee leaving a travel business to start a competing business. The first consideration is whether the employee has an employment contract with a noncompete clause, which is uncommon in the travel industry. Without such a contract, there are general principles that apply. While still employed, the employee has a duty to refrain from competing or assisting competitors. However, they are allowed to prepare for competition, such as signing a lease or subscribing to software services. They cannot copy records or use confidential information while still employed. Once they leave the company, they are freer to solicit clients and use non-confidential information, but they cannot use trade secrets. It is recommended to have enforceable employment contracts in place to protect the business. [Extracted from the article]
- Published
- 2024
12. FTC’s noncompete rule is effectively dead.
- Author
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Pestronk, Mark
- Subjects
LEGAL briefs ,TRAVEL regulations ,JUDGES ,NON-commissioned officers ,BUSINESS travel - Abstract
The article discusses the Federal Trade Commission's (FTC) noncompete rule, which has been permanently set aside by a Texas federal judge. The judge ruled that the FTC did not have the authority to issue substantive rules and that the particular rule was arbitrary and capricious. As a result, each state's noncompete laws will now govern methods of competition. The article also mentions the potential implications for other travel business rules issued by the Department of Transportation (DOT). [Extracted from the article]
- Published
- 2024
13. FTC rule excludes franchise agreements.
- Author
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Pestronk, Mark
- Subjects
LEGAL briefs ,EMPLOYEE rules ,INDEPENDENT contractors ,COURTS ,SCHEDULING - Abstract
The Federal Trade Commission's new rule prohibiting employee and independent contractor noncompete clauses is scheduled to take effect on September 4, but it is uncertain whether it will stay in place. A Texas federal judge has temporarily stopped the FTC from enforcing the rule, but only against the plaintiffs in that case. The ruling may be limited to the plaintiffs or take effect nationwide. The government is expected to appeal the ruling, and if it reaches the Supreme Court, the prospects for the rule are dim. If the rule does take effect, it will apply retroactively, rendering noncompetes signed before the date unenforceable. Franchise agreements are excluded from the rule, but this exception does not apply to individuals employed by the franchisee. [Extracted from the article]
- Published
- 2024
14. Understanding terms in MSAs.
- Author
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Pestronk, Mark
- Subjects
CORPORATE accounting ,RESERVATION systems ,BUSINESS names ,COPYRIGHT ,LEGAL briefs - Abstract
This article discusses the terms "works made for hire" and "work product" in master services agreements (MSAs) between travel agencies and corporate clients. The term "works made for hire" refers to specific work that is ordered or commissioned and automatically belongs to the person who pays for it. "Work product" is a broader term that encompasses all deliverables and materials created by the service provider for the client. The article advises travel agencies to be cautious about these terms, as they may result in the transfer of ownership of profiles, reports, and customized portals to the corporate client. It suggests negotiating exemptions or deleting these clauses from the MSAs if possible. [Extracted from the article]
- Published
- 2024
15. Old host refuses to transfer bookings.
- Author
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Pestronk, Mark
- Subjects
LEGAL briefs ,BREACH of contract ,CRUISE industry ,TOUR brokers & operators ,SUPPLIERS - Abstract
The article discusses the issue of transferring bookings from an old host agency to a new host agency. The author explains that unless there is an agreement requiring the old host to cooperate, there is no way to force them to transfer the bookings. While some bookings can be canceled and rebooked through the new host, this may not be possible in many cases due to penalties or lack of availability. The author suggests negotiating a four-party agreement involving the old host, new host, supplier, and client to facilitate the transfer, but acknowledges that this may not be easy to achieve. [Extracted from the article]
- Published
- 2024
16. Figuring out the right earnout formula.
- Author
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Pestronk, Mark
- Subjects
TRAVEL agents ,MERGERS & acquisitions ,PURCHASING contracts ,LEGAL briefs ,AUTOMOBILE leasing & renting - Abstract
This article discusses the complexities of setting an earnout formula when selling a travel agency. The earnout formula involves setting payments as a percentage of revenue received over a period of time. The article addresses three key questions in negotiating an earnout: what kinds of revenue are included, what clients are included, and whether the formula applies to revenue received or sales made during the earnout term. The author explains that travel agency revenue consists of various elements such as commissions, fees, overrides, markups, incentives, and miscellaneous payments, but it is rare for an earnout to include all these elements. The article emphasizes the importance of clearly defining the elements of revenue included in the purchase agreement and ensuring that the buyer provides a detailed report of each sale and revenue item. [Extracted from the article]
- Published
- 2024
17. 5 things to know when buying an agency.
- Author
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Pestronk, Mark
- Subjects
MERGERS & acquisitions law ,TRAVEL agents - Abstract
This article provides guidance for individuals interested in acquiring travel agencies. It highlights five industry-specific issues that attorneys representing buyers may not be familiar with. These issues include the need for approval from the Airlines Reporting Corp. for ownership changes, the potential loss of bonus commissions if the timing of the acquisition is not managed correctly, the importance of checking client and supplier receivables, the varying commission payment policies of travel suppliers, and the need for precise definitions in earnout agreements. The article emphasizes the importance of understanding these issues to avoid potential legal mistakes in travel agency acquisitions. [Extracted from the article]
- Published
- 2024
18. 5 things to know when buying an agency.
- Author
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Pestronk, Mark
- Subjects
TRAVEL agents ,ACCOUNTS receivable ,PRICES ,CREDIT cards - Abstract
This article discusses five important issues to consider when buying a travel agency. The first issue is the requirement for travel agencies in the U.S. to obtain an appointment from the Airlines Reporting Corp. (ARC) in order to issue airline tickets. Failure to obtain ARC approval before closing the deal can result in sanctions. The second issue is the dependence of large corporate agencies on bonus commissions, which can be suspended during the acquisition process. The third issue is the need to check and adjust for any outstanding client receivables or bad debts. The fourth issue is understanding the varying commission payment policies of travel suppliers and GDS vendors. The fifth issue is the importance of developing precise definitions for earnouts, which are portions of the purchase price dependent on post-closing sales, revenue, or profits. The article also briefly mentions United Airlines' new advertising initiative, Kinective Media, which uses customer data to deliver targeted advertisements throughout the travel journey. The author expresses discomfort with this initiative and suggests that United should focus on improving its services instead. [Extracted from the article]
- Published
- 2024
19. Agency accreditation: Inside the numbers.
- Author
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Pestronk, Mark
- Subjects
AGENT (Philosophy) ,ACCREDITATION ,TRAVEL agents ,TRAVEL insurance ,BANKING industry - Abstract
This article discusses the accreditation numbers required for travel agencies and host agencies. ARC numbers are needed for agencies that want to issue airline tickets, while Iatan numbers, CLIA membership, or TRUE codes are industry-recognized accreditation numbers that allow suppliers to recognize agencies and track their sales. Iatan appointments have the most requirements and are recognized by all travel suppliers. CLIA member numbers are recognized by cruise lines and some tour operators and resorts, while TRUE codes are recognized by many suppliers. The article also mentions that the U.S. Travel Insurance Association offers centralized training for travel advisors. [Extracted from the article]
- Published
- 2024
20. Can contracts curb social media posts?
- Author
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Pestronk, Mark
- Subjects
SOCIAL media ,SOCIAL contract ,SOCIAL acceptance ,FREEDOM of speech ,SOCIAL desirability - Abstract
The article discusses the legality of requiring independent contractors (ICs) to submit their social media posts for approval and provide their social media logins to their host agency. The author explains that the rights and duties of both parties depend on the contract, and if the agreement allows for these requirements, they are legal. The author also addresses the argument that these requirements make ICs employees and violate their First Amendment rights, stating that control over conduct does not automatically classify the relationship as one of employment. Additionally, the author mentions that California law protects employees from being required to share their social media with employers. The First Amendment only applies to government action and does not restrict private parties from limiting free speech through contracts. [Extracted from the article]
- Published
- 2024
21. The do’s and don’ts of selling travel insurance.
- Author
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Pestronk, Mark
- Subjects
TRAVEL insurance ,INSURANCE law ,INSURANCE associations ,TRAVEL agents ,INSURANCE - Abstract
According to an article in Travel Weekly, retail travel agencies can sell travel insurance without a license in most states, as long as they meet certain conditions. These conditions include selling under the supervision of a state-licensed travel insurance agency or broker, undergoing training on insurance offerings and sales practices, and not providing advice or interpreting policy terms. Travel retailers can take applications and forward them to producers for decision, but they cannot answer clients' questions about the policy and must refer them to the producer. It is important for travel agencies to be aware of these rules when selling travel insurance. [Extracted from the article]
- Published
- 2024
22. Getting help with debit memos.
- Author
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Pestronk, Mark
- Subjects
MEMORANDUMS ,TORTURE ,DECLARATORY judgments ,LEGAL costs ,LEGAL judgments ,LEGAL briefs - Abstract
This article discusses the issue of receiving large airline debit memos and the challenges faced in resolving them. The author acknowledges that it is a common problem and suggests a few options for seeking a response from the carrier. These options include being part of a larger agency or consortium, hiring an attorney to write a formal letter, or filing a lawsuit for a declaratory judgment. The article also mentions the possibility of doing nothing and waiting to see what happens, as well as the fact that ARC will not take action unless the debit memo is due to fraud or nonpayment. [Extracted from the article]
- Published
- 2024
23. Contracts to consider in agency purchases.
- Author
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Pestronk, Mark
- Subjects
CONTRACTS ,LABOR contracts ,OFFICE leases ,RESERVATION systems ,OFFICES - Abstract
This article discusses the types of long-term contracts that travel agencies typically have and which ones are advantageous for a private equity firm to assume when acquiring an agency. The larger the agency, the more long-term contracts it tends to have, with technology vendors, landlords, travel suppliers, consortia or franchises, corporate clients, and sometimes employees. GDS contracts are typically five to eight years long and cannot be terminated early without penalties. Contracts with travel suppliers are usually for one year or less and can be terminated on short notice. The article advises the buyer to focus on assuming contracts with favorable business terms, such as GDS contracts, corporate online booking system agreements, commission and override agreements, and profitable corporate and group client contracts. Contracts like office leases and technology system contracts may be less important to assume, as the buyer can likely negotiate better terms in the future. [Extracted from the article]
- Published
- 2024
24. Six tips for getting the best GDS deal.
- Author
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Pestronk, Mark
- Subjects
TRAVEL agents - Abstract
This article provides six tips for travel agencies to negotiate the best deal with Global Distribution System (GDS) vendors. The author suggests starting the negotiation process early, being patient, and not being afraid to let the current contract expire while negotiating. It is also recommended to compare notes with colleagues and seek expert advice to determine the best financial deal rather than being swayed by technology. Additionally, creating a credible threat of conversion by obtaining competing offers can strengthen the negotiating position. The article emphasizes the importance of maintaining confidentiality if there is a nondisclosure agreement with the vendor. [Extracted from the article]
- Published
- 2024
25. How not to be the ‘merchant of record’.
- Author
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Pestronk, Mark
- Subjects
MERCHANTS ,CREDIT cards ,DEBIT cards ,ELECTRONIC funds transfers ,CONSUMERS - Abstract
The article discusses the implications of the Department of Transportation's new refund rule for corporate travel, meetings, and incentives. The rule states that the "merchant of record," defined as the entity responsible for processing payments for airfare, is obligated to provide refunds for canceled and delayed flights. While it may initially seem that if a client pays by cash, check, or wire transfer, the rule does not apply, the DOT's explanatory statement suggests that if a receipt is issued for these payment methods, the entity that issued the receipt is responsible for refunds. The article also clarifies that paying the airline with the agency's credit card does not exempt the agency from the refund obligations. Additionally, the author believes that the rule applies to any person or entity that pays for an airline ticket, not just consumers. [Extracted from the article]
- Published
- 2024
26. Defining terms in DOT’s airline refunds rule.
- Author
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Pestronk, Mark
- Subjects
REBATES ,CHECKS ,CREDIT cards ,DEBIT cards ,AIRLINE industry - Abstract
The Department of Transportation's new rule regarding airline refunds will go into effect on October 26. The rule requires agencies to make ticket refunds out of their own pockets in cases of cancellations, significant delays, significantly delayed bags, and ancillary services fees not provided. The "merchant of record" is responsible for processing payments and issuing refunds, which applies to agencies that use their own credit card merchant account or accept payment by cash or check. The agency must issue refunds within seven business days for credit card sales and within 20 calendar days for cash, check, or debit card payments. There is no deadline for the airline to reimburse the agency. [Extracted from the article]
- Published
- 2024
27. Who will inherit your business?
- Author
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Pestronk, Mark
- Subjects
LEGAL briefs ,SOLE proprietorship - Abstract
This article discusses the concerns of an aging baby boomer who is an independent contractor for a large host agency. The individual is worried about what will happen to their loyal clientele and expected commissions after their death. The advice given in the article depends on various factors, such as the existing independent contractor agreement, the business structure, and the individual's will and estate plan. The article suggests that setting up a corporation or LLC can help ensure that the book of business can be passed on to heirs. It also advises consulting with an estate planning attorney to finalize any arrangements. [Extracted from the article]
- Published
- 2024
28. Noncompetes are about to become illegal.
- Author
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Pestronk, Mark
- Subjects
LEGAL briefs ,ENTREPRENEURSHIP ,TRAVEL agents ,LABOR laws ,STATE laws - Abstract
The Federal Trade Commission (FTC) has adopted a rule that will make non-compete clauses illegal starting on September 4. This rule will have a significant impact on businesses in the U.S., including travel agencies. It means that travel agencies can no longer have clauses in employment or independent contractor agreements that prohibit employees or contractors from working with competitors after their relationship with the agency ends. The rule supersedes all state laws that allow non-compete clauses, even if they are limited in time and geography. However, the rule does not prohibit non-compete clauses that apply during employment or the contractor relationship. There are exceptions for senior executives making over $151,164 and for buyers of businesses requiring non-compete agreements as part of the sale. [Extracted from the article]
- Published
- 2024
29. The DOT has deputized state AGs.
- Author
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Pestronk, Mark
- Subjects
LETTERS of intent ,CONSUMER complaints - Abstract
The Department of Transportation (DOT) has authorized the attorneys general of 18 states and territories to investigate violations of the DOT's rules within their jurisdictions. This is a significant development because, under the Airline Deregulation Act of 1978, states are generally prohibited from regulating airfares. However, the DOT's new initiative allows state officials to determine if travel agencies and airlines have violated federal regulations. While the states cannot enforce fines or legal action themselves, they can refer meritorious complaints to the DOT for potential enforcement. This increased regulatory scrutiny comes at a time when travel agencies are also facing challenges related to refunds for canceled and delayed flights. [Extracted from the article]
- Published
- 2024
30. Is the DOT's refund rule still 'anti-agent'?
- Author
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Pestronk, Mark
- Subjects
REBATES ,FLIGHT delays & cancellations (Airlines) - Abstract
The Department of Transportation (DOT) has finalized a rule regarding airline ticket refunds, but it is not as "anti-agent" as previously claimed. Under the rule, travel agencies are only responsible for refunds in cases where they were the credit or debit card merchant or accepted payment by cash or check. The agency must make the refund out of its own funds by specified deadlines, regardless of whether they still hold the client's money or if the airline files for bankruptcy. The rule also applies to non-ARC-appointed agencies and independent contractors. The DOT has delayed the effectiveness of the refund requirements for six months to allow for cooperation and communication between airlines and agencies. However, the rule may still burden many agencies and lead to a decrease in ticket sales. [Extracted from the article]
- Published
- 2024
31. Don’t risk antitrust violations to keep staff.
- Author
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Pestronk, Mark
- Subjects
ANTITRUST violations ,CONTRACTS ,LEGAL briefs ,EMPLOYEE selection - Abstract
This article discusses the legality of certain employment practices in relation to antitrust laws. It explains that entering into agreements with competitors to fix employee salaries or refrain from hiring each other's employees is illegal and can result in civil and criminal prosecution. The U.S. Department of Justice and the Federal Trade Commission have issued guidance on the illegality of these practices. Additionally, the article mentions that noncompete clauses are facing potential regulation, with some states already outlawing them. It advises consulting an employment attorney for guidance on noncompete clauses. [Extracted from the article]
- Published
- 2024
32. Client’s DUI could keep him out of Canada.
- Author
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Pestronk, Mark
- Subjects
DRUNK driving ,FEDERAL crimes ,CRIME ,CANADIAN federal government - Abstract
According to an article in Travel Weekly, a client with a DUI conviction from about 10 years ago may have trouble being admitted into Canada at the airport. The Canadian federal government considers DUI to be a serious criminal offense and can deny entry to individuals with such convictions. However, there is a possibility that the client could still be admitted if the Canadian immigration officer deems them rehabilitated. Factors such as the severity of the offense and the amount of time that has passed since the conviction can influence this decision. The article advises the client to come prepared with necessary paperwork and suggests seeking assistance from a Canadian immigration law firm. If the client is denied entry, they will not be allowed to leave the airport and will be flown back home by their airline. [Extracted from the article]
- Published
- 2024
33. How to get rid of an IC.
- Author
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Pestronk, Mark
- Subjects
BANKING industry ,LEGAL briefs ,BANK accounts ,FRAUD ,INDEPENDENT contractors - Abstract
This article discusses the best way to terminate a relationship with an independent contractor (IC) in a travel agency. The author advises referring to the agreement with the IC to determine the termination process. Ideally, the agreement should allow for termination with a specific notice period or immediate termination for suspected fraud or breach of the agreement. If the agreement does not allow for termination, negotiation may be necessary. The article also addresses whether a reason for termination needs to be provided and the entitlement of the IC to commissions after termination. [Extracted from the article]
- Published
- 2024
34. Amex GBT-CWT linkup is full of upside.
- Author
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Pestronk, Mark
- Subjects
TRAVEL agents ,BUSINESS travel - Published
- 2024
35. Truth in advertising coming to travel.
- Author
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Pestronk, Mark
- Subjects
FALSE advertising ,ORGANIZATIONAL transparency ,LEGAL briefs ,CONSUMERS ,STATE taxation - Abstract
The article discusses the issue of misleading advertising in the travel industry, specifically regarding cruise, hotel, and car rental ads. The Federal Trade Commission (FTC) is considering a proposed rule to address this issue, but California has already enacted a law banning "junk fees" in advertisements, effective July 1. The law applies to companies both within and outside of California that advertise to California consumers, including travel agencies and tour operators. The law requires that the advertised price includes all mandatory fees and charges, except for taxes and fees imposed by a government agency. While the California law is weaker than the Department of Transportation's (DOT) full-price rule for airfares, it allows consumers to sue violators for damages. The article also mentions an update on the federal Corporate Transparency Act, which requires businesses with fewer than 20 employees to file a list of "beneficial owners" with the Financial Crimes Enforcement Network. A federal judge has deemed the law unconstitutional, but the government has appealed the decision. [Extracted from the article]
- Published
- 2024
36. Affiliating to meet AA’s NDC requirement.
- Author
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Pestronk, Mark
- Subjects
LEISURE - Abstract
American Airlines is requiring that a large portion of bookings be made through their New Distribution Capability (NDC) system in order for agencies to remain "preferred." This requirement poses a challenge for agencies that have few bookings on NDC and find the process difficult to integrate into their systems. To meet this requirement, agencies can affiliate with a larger agency that is likely to reach preferred status. The relationship between the two agencies can take different forms, ranging from a ticketing agreement where the preferred agency receives booking information via email, to a more integrated arrangement where the agency becomes an authorized location under the preferred agency's Global Distribution System (GDS) agreement. However, there are risks involved for the preferred agency, such as potential fraud liability and the possibility that American Airlines may prohibit such affiliations in the future. [Extracted from the article]
- Published
- 2024
37. Little legal recourse against AA's moves.
- Author
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Pestronk, Mark
- Subjects
CONSUMER protection ,AIRLINE tickets ,LEGAL briefs - Abstract
The article discusses the legal recourse available to travel agencies in response to American Airlines' decision to deny frequent flyer benefits to leisure customers. The article explains that airlines have the legal right to set conditions for the sale of their services and to discriminate by providing benefits to some agencies and not others. The 1989 U.S. Court of Appeals decision in Illinois Corporate Travel Inc. v. American affirmed airlines' rights to dictate conditions for ticket sales. The article suggests that only consumers can challenge airline monopolists and that joining a host agency may be necessary for some agencies to continue ticketing on American Airlines. [Extracted from the article]
- Published
- 2024
38. Class action against airlines won't fly.
- Author
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Pestronk, Mark
- Subjects
CLASS actions ,STATE laws ,AIRLINE rates ,BREACH of contract ,AIRLINE industry - Abstract
A library patron asks why airlines are not required to refund the taxes on a nonrefundable ticket that is not used. The answer explains that attempts to file class-action lawsuits against airlines have failed because the Airline Deregulation Act of 1978 gives the Department of Transportation (DOT) the authority to rule on such matters. The act pre-empts state and federal courts from enforcing laws related to airline rates, routes, and services. While airlines should refund some taxes and fees, there is no authoritative list of which ones are refundable. The patron is advised to complain to the DOT. [Extracted from the article]
- Published
- 2024
39. The growing trend of verticalization.
- Author
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Pestronk, Mark
- Subjects
LEGAL briefs ,TOURISM ,INDEPENDENT contractors ,CONSORTIA ,RETAIL industry - Abstract
The article discusses the growing trend of "verticalization" in the retail travel industry. The author identifies several factors contributing to this trend, including the ease of entry into the travel advisor business, the simplicity and cost-free nature of entering the host-agency business, the lack of government audits on independent contractors (ICs), and the commission agreements of major carriers. The author predicts that in the future, a small number of mega-agencies will dominate the industry, with smaller agencies affiliating with them through various arrangements. [Extracted from the article]
- Published
- 2024
40. The legality of IC exclusivity.
- Author
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Pestronk, Mark
- Subjects
FRAUD - Abstract
The article discusses the legality of requiring independent contractors (ICs) to work exclusively with an agency. While many hosts prefer exclusivity to minimize the risk of fraud, federal law and the laws of most states allow for exclusivity without reclassifying the IC as an employee. The IRS does not consider exclusivity as evidence of control, and most states follow the ABC test, which focuses on day-to-day control rather than exclusivity. However, some states, like California, may view exclusivity as a reason for reclassification. It is important to research the laws of both the agency's state and the contractor's state to determine the legal requirements. [Extracted from the article]
- Published
- 2024
41. Six ways to get higher commissions.
- Author
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Pestronk, Mark
- Subjects
TRAVEL agents ,BUSINESSPEOPLE - Abstract
This article discusses six ways that travel agencies can obtain higher commissions. These methods include joining a host agency or consortium, using travel companies' booking portals, partnering with higher-commission travel agencies, designating your agency as an authorized location under a GDS contract, becoming an associate branch of a larger agency, or forming a group of agencies designated as branches under an ARC agreement. These arrangements are designed to make suppliers believe that the agency is part of a larger entity, simplifying marketing and administration. The article suggests that suppliers may condone or encourage these arrangements as they require fewer resources to reach a larger number of agencies. [Extracted from the article]
- Published
- 2024
42. Why GDS contracts are full of dangers.
- Author
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Pestronk, Mark
- Subjects
CONTRACTS ,HAZARDS - Abstract
The article discusses the increasing trend among major U.S. airlines to list their lowest fares only through nontraditional Global Distribution System (GDS) channels. A survey by Amtrav found that comparison searches showed lower fares on American, United, and Southwest through direct-connection fares and New Distribution Capability (NDC) rather than traditional GDSs. Only Delta still has all of its fares in the GDSs. The article warns that GDS contracts, which have been in effect for almost 40 years, now pose potential dangers due to this trend. It advises travel agencies to be cautious when negotiating new GDS contracts and suggests exploring other channels for better deals. [Extracted from the article]
- Published
- 2024
43. Green flags in host agency contracts.
- Author
-
Pestronk, Mark
- Subjects
CONTRACTS ,REVENUE accounting ,TRAVEL agents ,LEGAL briefs - Abstract
This article discusses the importance of clear and comprehensive clauses in host agency contracts. It highlights several "green flags" that indicate a fair agreement, such as including all forms of travel agency revenue in the revenue split, specifying how compensation is calculated for groups, outlining the requirements for compensation to accrue, setting fixed deadlines for payment, listing any costs the independent contractor (IC) must pay, providing the right to audit the host's books, addressing the collection of unpaid commissions, determining the fate of commissions after contract termination, and outlining the terms and conditions for moving bookings to another host agency. While not every well-drafted host contract includes all of these clauses, most of them do. [Extracted from the article]
- Published
- 2024
44. Red flags in host agency contracts.
- Author
-
Pestronk, Mark
- Subjects
CONTRACTS ,BUSINESSPEOPLE - Abstract
Host agency contracts vary widely in length and content, with some being as short as three pages and others as long as 35 pages. The best contracts strike a balance between control and independence for independent contractors (ICs), while others either emphasize tight control or complete freedom. Negotiability of host contracts depends on factors such as the IC's book of business, and there is no standard commission split. Red flags to watch out for in host contracts include the ability for the host to change the commission split and fees without limitation, the host claiming ownership of all clients, and noncompete clauses that restrict the IC's future work. [Extracted from the article]
- Published
- 2024
45. Working out Labor’s new IC rule.
- Author
-
Pestronk, Mark
- Subjects
PRIVATE companies ,EXECUTIVE ability (Management) - Abstract
The U.S. Labor Department has finalized a rule that redefines the distinction between employees and independent contractors under the Fair Labor Standards Act. The rule, which becomes effective on March 11, uses six criteria to determine whether a worker is an employee or an independent contractor. These criteria include factors such as the worker's opportunity for profit or loss, investments made in the job, and the level of control exerted by the company. The rule has received criticism for its vagueness, and employer groups plan to appeal and request an injunction against it. It is important for agencies to take steps to ensure compliance with the rule, such as requiring ICs to set up their own corporations or limited liability companies and making trainees employees until they have their own following. [Extracted from the article]
- Published
- 2024
46. A new hurdle for small businesses to clear.
- Author
-
Pestronk, Mark
- Subjects
SMALL business ,MONEY laundering ,PASSPORTS ,PRIVATE companies ,STOCKHOLDERS equity ,FULL-time employment - Abstract
The Corporate Transparency Act, a new federal law that took effect on January 1, requires businesses in the U.S., including travel agencies and other travel companies, to disclose ownership information that was previously confidential. The law aims to combat money laundering and the concealment of illicit funds through "shell" corporations or other entities. Business owners must file a list of "beneficial owners" with the Financial Crimes Enforcement Network by January 1, 2025. Failure to comply with the law could result in fines and imprisonment. The law applies to both domestic and foreign companies registered to do business in any U.S. state. [Extracted from the article]
- Published
- 2024
47. More questions about selling an agency.
- Author
-
Pestronk, Mark
- Subjects
PURCHASING agents ,PRICES ,VALUE (Economics) ,TRAVEL agents - Abstract
This article discusses various questions related to selling a travel agency. The first question addresses whether a home-based agency is worth less or less likely to sell at a good price compared to a brick-and-mortar agency. The answer provided states that prospective buyers do not value a home-based agency less, and in fact, the absence of rent expenses can increase profits. The article also touches on topics such as purchase prices, earnouts, and the preferred form of acquisition (asset purchases). Additionally, it mentions that legal fees for selling a travel agency can range from a few thousand dollars to $25,000 or more, depending on the complexity of the deal. The author advises readers to not be discouraged by generalizations and to remember that each deal is unique. [Extracted from the article]
- Published
- 2024
48. A travel person's guide to selling an agency.
- Author
-
Pestronk, Mark
- Subjects
BUSINESSPEOPLE ,TRAVEL agents ,TELECOMMUTING - Abstract
This article provides guidance for travel agency owners who are considering selling their businesses. The author distinguishes between "travel people" who are experts in advising clients but may lack a strong understanding of the business side of their agency, and "business people" who have a better grasp of the economics. The first step for a travel person is to ensure they understand their company's financials and can answer questions about them from prospective buyers. The article also suggests ways to maximize profits, such as joining a consortium or cutting expenses, and provides advice on finding a buyer and retaining an experienced attorney. The author emphasizes that they are not patronizing travel people, as they would likely be one themselves if they owned an agency. [Extracted from the article]
- Published
- 2024
49. Keeping contracts up with the times.
- Author
-
Pestronk, Mark
- Subjects
CONTRACTS ,INDUSTRIAL management ,CORPORATE accounting ,BUSINESS travel ,TRAVEL agents - Abstract
Corporate travel agencies are facing challenges in keeping their contracts up to date with the evolving demands of their corporate clients. As corporate travel management becomes more sophisticated, clients are requesting new services that are not covered by existing contracts, without being willing to pay additional fees. To address this issue, agencies can review their current contracts and propose amendments to cover new services and fees. Another approach is to propose a blanket amendment for all corporate accounts, stating that new services will come with new fees. However, if a contract promises unlimited services for a fixed fee, agencies may be stuck unless they can terminate the contract. It is advisable for new contracts to include a clause explicitly stating that new services will have separate fees. [Extracted from the article]
- Published
- 2023
50. Navigating ship charter contracts.
- Author
-
Pestronk, Mark
- Subjects
MARITIME contracts ,INDEMNIFICATION ,CRUISE industry ,CONTRACTS ,CHARTERS ,EXPERTISE - Abstract
This article from Travel Weekly provides guidance on navigating ship charter contracts. The author advises seeking legal expertise when dealing with these contracts, as they require specialized knowledge. Some important points to consider include ensuring that the client organization signs the contract to avoid liability, securing a full refund if the charter doesn't operate for reasons beyond your control, and arranging for accommodations and transfers if the cruise is cut short. The article also suggests including provisions for canceling without charge in certain circumstances and obtaining indemnification and liability coverage from the cruise line. The term "charter party" is explained as an old-fashioned term for a charter contract. [Extracted from the article]
- Published
- 2023
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