SEATTLE – CM Travel must refund individuals who answered an employment ad for travel agents but instead were offered opportunities as independent contractors. The Attorney General’s Office announced a settlement today with the Bellevue-based company and its owners, resolving allegations that they violated the state Consumer Protection Act.
Russell and Marika Dawe, of Sammamish, and Careermaker, Inc., doing business as CM Travel, agreed to the terms of a consent decree filed today in King County Superior Court. The settlement, which does not include an admission or finding or wrongdoing, includes injunctions related to how they represent business opportunities to potential travel agents.
CM Travel operates as a host agency; its agents are self-employed, usually work from their homes and access the company’s computerized booking resources to make reservations. Agents pay annual and monthly fees to the company and share commissions with CM Travel.
“Job-seekers who apply to ‘help wanted’ ads generally expect to be offered a position that pays a regular wage or commission; they don’t expect to become independent contractors that will pay fees to and share commissions with the company,” said Assistant Attorney General Shannon Smith. “Companies seeking to negotiate contracts with self-employed individuals need to clearly explain that business relationship in their promotions.”
According to the state’s complaint also filed today, CM Travel advertised in local newspapers that it sought to hire travel agents and would provide training. Applicants were interviewed in groups and were told about the company’s commission-based pay, travel-related benefits and training opportunities. However, applicants were not told the true nature of the opportunity until after the initial meeting. This led some individuals to believe they were being offered a job rather than an opportunity to sign a contract.
Under the settlement, CM Travel must disclose in its advertisements that the opportunity is for an independent contractor, not an employee. CM Travel also must disclose the following, prior to signing an agreement with a potential agent:
• The agent’s earnings will be derived solely from commission,
• The range of commissions that other agents have earned,
• The number of bookings will depend on the effort put forth by the agent,
• Mandatory and other fees that the agent will pay to CM Travel,
• Agents will not receive health benefits, paid leave or retirement, and
• Agents will be financially responsible for all business expenses beyond the software, promotional services and blanket insurance provided by CM Travel.
They defendants will pay $2,635 restitution to refund five individuals who paid fees to CM Travel. They also agreed to pay $10,000 in civil penalties, suspended provided they comply with the terms of the agreement, and $9,000 in state attorneys’ fees and costs.
CM Travel Complaint
CM Travel Consent Decree
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Media Contacts: Kristin Alexander, Media Relations Manager – Seattle, (206) 464-6432