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Disney seeks exemption from contract-agent law

26 January 2011 by By Jason Garcia, Orlando Sentinel

TALLAHASSEE — Walt Disney World, concerned about potential legal liability, is seeking to get out from under a state law governing how businesses contract with sales agents.

The giant resort wants the Florida Legislature to exempt it and other travel companies from a law requiring businesses that use outside agents to sell their products in Florida — and pay those agents by commission — to have written contracts that specify how the commissions will be calculated and paid. The law also gives agents the ability to sue in certain situations when they are not paid on time — for triple the amount of money due, plus legal fees and court costs.

Disney and its backers say the law, which was initially passed in 1984 amid complaints that some out-of-state businesses were withholding promised commissions, has become obsolete in the Internet age and now imposes unnecessary costs on businesses that work with many agents.

Disney tried and failed to win an exemption to the law for travel businesses last year, but it may have more luck this year. An overwhelmingly pro-business atmosphere has gripped the state Capitol since the November elections, with new Republican Gov. Rick Scott and leaders in the GOP-controlled Legislature vowing to eliminate scores of regulations that businesses don't like, in hopes of getting businesses to begin hiring again and putting a dent in the state's stubbornly high unemployment rate.

"In the 1980s, no one could have foreseen the impact the Internet and e-commerce would have on the travel industry. This statute is outdated and puts an unnecessary burden on businesses large and small across Florida," Disney World spokesman Bryan Malenius said.

As it stands now, Disney appears to be violating the law.

That's because Disney, instead of maintaining written contracts with individual travel agents, makes its tickets, hotel rooms and vacation packages available through a website that can be accessed by any registered "seller of travel" that wants to peddle Disney vacations. That site details commission amounts, payment timetables and other business terms.

Boosters say it is a more cost-effective approach for businesses that work with scores of agents across the state. They say many businesses follow Disney's model, though they have not provided specific examples.

Universal Orlando, which like Disney sells vacation packages through many agencies, would not discuss its contract practices. But "we support a review of the current statute," Universal spokesman Tom Schroder said.

SeaWorld Parks & Entertainment, operator of five theme and water parks in Florida, including SeaWorld Orlando and Busch Gardens Tampa Bay, said it contracts with all travel agents and companies who receive a commission on the sale of its tickets. Still, SeaWorld spokesman Fred Jacobs said the company supports the legislation Disney is lobbying for, saying it would "reduce burdensome regulation in this area."

To get around the law, Disney lobbyists have floated a proposal to exempt from the need for written contracts any commission contract to which a seller of travel is a party — that is, contracts between travel providers like Disney World and travel agents selling Disney vacations.

Disney managed to get the exemption inserted into an omnibus agriculture bill during last year's legislative session, only to see the overall package — which touched on dozens of disparate issues, from seeting new testing guidelines for antifreeze to making sex with animals illegal — fail to pass. So the company has approached lawmakers again this year.

This time, however, some lawmakers want to go even further. Rather than exempting travel businesses, they have proposed wiping out the written-contract law entirely.

"Our technology has outgrown our Florida statutes," said Sen. Greg Evers, R-Baker, who is sponsoring the legislation (HB 4023/SB 474) in the Senate.

Another factor: deregulation fever in Tallahassee. House Speaker Dean Cannon, R-Winter Park, has even offered House members, who are typically limited to sponsoring no more than six pieces of general legislation, the chance to carry as many as three extra bills this year — provided they also sponsor "repealer" bills that eliminate unnecessary or unpopular laws.

Rep. Scott Plakon, R-Longwood and House sponsor of the contract legislation, said the government shouldn't dictate rules by which two businesses contract with each other.

"Philosophically, I have difficulty with government standing between two businesses," he said


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