State sues company for deceptive poster sales

SEATTLE — A Michigan business has been sued for hundreds of thousands of Consumer Protection Act violations, according to a statement from Washington Attorney General Bob Ferguson.

Ferguson filed the lawsuit against Labor Law Poster Service on Monday, according to the statement. This is the third time the company has been sued in Washington for the same business practices.

In 2008, the Attorney General’s Office investigated consumer protection violations by Labor Law Poster Service, formerly known as Mandatory Poster Agency, a company run by brothers Joseph Fata, Thomas Fata and Steven Fata, and later by Joseph’s son, Justin Fata, according to the statement. Mandatory Poster Agency entered into a legally enforceable agreement that it would provide full refunds to Washington businesses and stop unlawful conduct to avoid a penalty.

Mandatory Poster Agency did not stop, and in 2014, the Attorney General’s Office filed a consumer protection lawsuit and won. In March 2016, a King County Superior Court judge ruled that the Mandatory Poster Agency violated the Consumer Protection Act 79,354 times and ordered civil penalties and restitution of $1.15 million. The judgment included $793,540 in civil penalties and up to $362,625 in restitution for businesses harmed by the deceptive scheme. The court also ordered the Fata brothers to stop their illegal conduct. In all, Mandatory Poster Agency and the Fata brothers paid more than $1.2 million as a result of that judgment.

Monday’s action is a new consumer protection lawsuit against Labor Law Poster Service, and the Fatas, for sending hundreds of thousands of deceptive solicitations targeting small businesses, the AG wrote.

The lawsuit, filed in King County Superior Court, accuses Labor Law Poster Service of violating the state Consumer Protection Act more than 300,000 times over the course of at least seven years, the statement said. It alleges that the company and its owners violated both the prior permanent injunction and the 2008 resolution with the Attorney General’s Office that prohibited the company from sending deceptive letters.

Ferguson’s lawsuit is part of the Small Business Protection Initiative, which has won tens of millions of dollars for Washington businesses that have been targeted by scams, the statement said.

The types of businesses across Washington affected by Labor Law Poster Service’s scheme include a small law firm, a fitness franchise, a daycare center, a veterinarian, a church, and a company that transports people who use wheelchairs to non-emergency medical appointments, according to Ferguson.

“These repeat offenders keep recycling deceptive tactics they know are unlawful,” Ferguson wrote in the statement. “We will make them return every penny, plus interest, to small business owners they harmed. We’ll also seek a significant penalty to make sure they stop their illegal conduct.”

The latest lawsuit asserts that Labor Law Poster Service mailed at least 325,750 deceptive letters to small businesses between 2016 and 2022, including 60,000 to 70,000 new solicitations each year. The lawsuit alleges the company made at least 1,650 sales to Washington businesses since 2016, totaling at least $141,228 in sales.

The lawsuit seeks:

• Full restitution for Washingtonians harmed by this deceptive conduct, plus interest. This includes the $141,228 in sales, as well as any other payments the Attorney General’s Office uncovers from Washington businesses as a result of the deceptive solicitations.

• Civil penalties for every deceptive letter sent to Washington businesses to hold these repeat violators accountable and deter future violations. The law allows the Attorney General’s Office to seek a significant penalty of up to $7,500 for every one of the 325,750 deceptive letters. 

• Civil penalties of up to $125,000 for each of Labor Law Poster Service’s violations of the injunctive terms of its 2008 agreement with the Attorney General’s Office and the King County Superior Court’s 2016 permanent injunction.

Businesses with employees are legally required to display certain workplace posters about a variety of workers’ rights and entitlements, such as workplace safety requirements or the right to access disability leave, according to the statement. Employers can download digital copies of these posters for free from many regulators and state agencies, such as the Washington Department of Labor and Industries, Washington Employment Security Department and the U.S. Department of Labor. Workplace posters are not required for businesses with no employees.

Labor Law Poster Service intentionally misrepresents these requirements for profit, Ferguson wrote. They send deceptive letters that look like bills or invoices from a government agency. They mail the letters in envelopes with threatening language about legal consequences for not immediately purchasing the advertised product — a “Complete State & Federal Posting Requirement Set” — at a cost of $79.50 or more. These solicitations target small business owners, often newly registered small businesses, who may lack time and resources to vet the legitimacy of the letters.

Together, these deceptive tactics leave business owners with the impression that buying and displaying Labor Law Poster Service’s product is required by law and they ultimately pay the fee to avoid any risk of legal ramifications, according to the statement.

The latest lawsuit also asserts Labor Law Poster Service continues soliciting renewal payments from businesses they previously duped into buying the posters. Each version of deceptive solicitation — whether for new or repeat purchases — counts as a violation under the Consumer Protection Act, the suit contends.