[co-author: Stephanie Kozol]*
Labor Law Poster Service, formerly Mandatory Poster Agency, was recently ordered to pay more than $8.2 million in penalties and restitution following a lawsuit brought by the Washington state attorney general’s (AG) office. The lawsuit is the third enforcement action taken against this Michigan company in connection with its efforts to mail solicitations to Washington small businesses that look like or mimic official government communications.
Historic Enforcement Actions
The Washington AG’s office has investigated Labor Law Poster Service’s business activities for years.
In 2008, the Washington AG’s office looked into complaints that the company violated the state Consumer Protection Act by mailing notices to businesses that allegedly “made it appear that businesses needed to immediately purchase and post certain government posters in order to comply with the law.” The company subsequently entered into an Assurance of Discontinuance and agreed to stop using solicitation materials that could mislead recipients into believing the mail was from a government agency.
Then, in 2014, Washington initiated its second enforcement action when AG Ferguson filed a consumer protection lawsuit against the company, accusing it of again violating the state Consumer Protection Act by allegedly tricking thousands of businesses into paying for what reasonably appeared to be official government documents. A Superior Court judge found that the company committed 79,354 violations of the Consumer Protection Act and ordered the company to pay $10 per violation in civil penalties and up to $362,625 in restitution.
Current Enforcement Action
Labor Law Poster Service allegedly continued its practices, prompting a third enforcement action by the Washington AG’s office. In January 2024, Ferguson filed another lawsuit, alleging that Labor Law Poster Service violated the state Consumer Protection Act when they mailed additional deceptive solicitations to businesses from 2016 to 2022.
After a trial, the judge imposed a per-violation penalty of $12 for each of the nearly 600,000 solicitations sent by the company. The judge highlighted the defendants’ bad faith, noting their continued use of solicitations resembling government communications despite prior enforcement actions and agreements not to do so. The court also emphasized how the previous $10 per-violation penalty was insufficient to deter the company’s conduct and acknowledged the potential public harm posed by the company’s business model. In addition to the $7.4 million in penalties, the court awarded $850,000 in consumer restitution.
Implications
AGs routinely enter into settlements with companies accused of engaging in deceptive and unfair acts and practices under state consumer protection laws. What is less common are repeat offenders because companies typically realize that they are under increased scrutiny and potentially liable for increased civil penalties and more onerous injunctive terms for each additional enforcement action involving the exact same or similar conduct. Here, the company at issue allegedly engaged in the same deceptive conduct — and was caught — three times. Most AG offices will increase scrutiny when it comes to holding repeat offenders accountable. Washington is no different. Companies that have been the subject of an investigation — especially if that investigation resulted in a settlement agreement with injunctive provisions — should review their compliance policies and ensure that the conduct that resulted in the earlier enforcement action is no longer occurring.
*Senior Government Relations Manager
