From JDSupra, Richard Reibstein discusses a lawsuit in Massachusetts which alleges that travel advisors were misclassified as independent contractors. Richard writes:
Few industries are immune from class actions alleging IC misclassification of workers paid on a 1099 basis. One industry that has not yet been besieged by these types of lawsuits is travel, but that may be changing. While some companies in this industry employ travel advisors on a W-2 employee basis, a host of others engage such professionals as 1099 contractors. That can be risky — unless the travel business takes effective steps to enhance its compliance with laws classifying workers as employees or ICs — as seen in the first case summarized below among key legal developments last month. A number of companies using an IC business model in the travel industry (as well as an array of other industries) have resorted to a process such as IC Diagnostics (TM) to minimize exposure to IC misclassification liability in a customized and sustainable manner. This type of process can also be used to defend against lawsuits for IC misclassification and offers a number of special defenses, even in states with a strict test for IC status.
In the Courts (3 cases)
MASSACHUSETTS TRAVEL COMPANY SUED IN CLASS ACTION FOR IC MISCLASSIFICATION. A travel advisor has filed a proposed class action in a Massachusetts state court against vacation planning company, Practically Perfect Vacations, Inc., claiming violations of state law due to allegedly misclassifying her and about 50 similarly situated travel advisors as independent contractors and not employees. The company, which describes itself as providing “expert travel planners specializing in Disney,” is accused of failing to pay the advisors at least the minimum wage for all hours worked on a timely basis, charging the travel advisors unlawful fees for the right to work for the company, and failing to accrue and pay them for sick time. According to the class action complaint, the company engages travel advisors through independent contractor agreements to provide travel agent services. The complaint alleges that the agents are not free from control over the performance of their services, are required by the company to use the company’s network number to book all travel, must comply with all company rules, guidelines, and instructions, must complete yearly online training sessions, are required to sell travel services exclusively through the company, and are charged an agency fee. While the test for IC status in Massachusetts is very challenging for any business to meet, travel companies like the defendant may have alternative arguments to advance in defending against this type of lawsuit. Manoli v. Practically Perfect Vacations, Inc., No. 2583-CV-00161 (Mass. Super. Ct. Feb. 20, 2025).