SEATTLE — The Washington State Attorney General (AG) Bob Ferguson is bringing a second lawsuit and a third enforcement action against a Michigan-based company that the AG alleges has been targeting small local businesses for over a decade.
Labor Law Poster Service, which is owned by the Fata brothers, sends mailers out to small business owners that give the impression that they are a mandatory bill sent by a government agency. The AG's office alleges that business owners are coerced into paying $79 for posters that they can otherwise access for free.
While business owners are required to display certain posters informing employees of their rights, those posters are available for free to download and print from various government agencies.
The company also repeatedly targets the same business owners, suggesting that they must purchase new and updated posters annually by law.
This is not the first time that the Washington AG's office has taken the brothers, Joseph, Thomas and Stephen Fata, to court. In 2008, the brothers were operating as Mandatory Poster Agency, and were forced to pay restitution to all Washington businesses who purchased their posters. The brothers were also required to sign an agreement that they would stop engaging in deceptive practices targeting Washington business owners.
In 2014, the brothers were still found to be operating their scheme. The brothers were taken to court and ordered to pay $1.2 million in restitution, attorney fees and fines. The company paid the judgement, but has since been engaging in the same deceptive practices they were fined for originally under its new name, Labor Law Poster Service, according to the Attorney General's office.
Preliminary information suggests that 1,600 Washington companies have paid Labor Law Poster Service more than $140,000 since 2016, and that the company has sent more than 325,000 deceptive letters over that period of time. The AG's office argues that each letter amounts to a violation of Washington's Consumer Protection Act, which has a maximum penalty of a $7,500 fine.
As the AG seeks out Washington business owners who have been targeted by the scam, they expect the number of impacted businesses and the amount of money that Labor Law Poster Service has collected from Washington business owners to grow significantly. The office has received between ten and twelve consumer complaints about Labor Law Poster Service.
Ferguson said the company operates nationwide, and that his office will be reaching out to other AG offices around the country to notify them of Labor Law Poster Service's actions. The suit, filed in King County Superior Court, seeks full restitution paid to Washington business owners and penalties to be decided by a judge.
Anyone who suspects they have been the target of scams can file a complaint online with the Attorney General’s Office at atg.wa.gov/file-complaint or by calling toll-free at 1-800-551-4636.