Author: Kaya Stanley, Board Chair and CEO, CRMBC
Workers’ compensation claims are a familiar part of operating a restaurant. Still, for many restaurant owners, a surprising—and often controversial—aspect of managing these claims is the emergence of civil lawsuits tied to workers’ compensation cases. Michael Adreani, principal at Roxborough Pomerance, Nye & Adreani, shed light on this topic during a recent episode of The Self-Insurance Podcast. Here are four key takeaways from the conversation that may surprise restaurant operators, along with actionable advice to help them protect their businesses.
1. Dual Claims: The Surprise of Workers’ Comp Plus Civil Litigation
Restaurant owners may assume that when an employee files a workers’ compensation claim, it’s the end of the matter. However, Adreani points out that employees often file both workers’ compensation and civil claims simultaneously. He refers to this as “double dipping”—a tactic that can catch employers off guard. In a workers’ comp claim, the employer is expected to compensate the employee for medical expenses and lost wages. But the civil claim—often focused on discrimination—can add a whole new layer of risk.
This practice has grown more common in California, where workers’ comp attorneys sometimes work side-by-side with civil attorneys. Adreani explained, “You walk into their office, and on the left are the workers’ comp people, and on the right are the civil people. It’s the same law firm—they do both.” For restaurant owners, this means facing not just one legal battle but two, increasing the complexity and potential cost of a single workplace injury.
Actionable Tip: When an employee files a workers’ comp claim, anticipate the possibility of a civil claim and consult legal counsel to develop a defense strategy early on.
2. The Inconsistency Trap: Employees Playing Both Sides
One of the most surprising points in Adreani’s discussion is how employees can use inconsistent arguments in workers’ comp versus civil claims. In the workers’ comp process, employees might say, “I can’t work. This injury is so severe and pervasive.” However, in a subsequent civil suit, the same employee might argue that the employer should have returned them to work. According to Adreani, “Those two things are inconsistent.” Yet, employees—and sometimes their attorneys—are willing to play both sides, hoping to benefit from the workers’ comp system and a civil lawsuit.
This inconsistency challenges restaurant owners, who may defend themselves against conflicting narratives from the same employee. Adreani shared his frustration with this tactic: “It drives me crazy because, in these firms that do both, I don’t know what they’re thinking—they’re playing against each other sometimes.”
Actionable Tip: Carefully document all interactions with employees during and after a workers’ comp claim. This includes keeping records of medical reports, deposition statements, and return-to-work offers, which could be critical in refuting inconsistent civil claims.
3. Settlement Myths: Why a Workers’ Comp Settlement Won’t Protect You
Restaurant owners often believe that settling a workers’ comp claim will protect them from future civil claims, but Adreani warns this is a dangerous misconception. “You cannot release a civil claim in a workers’ comp settlement. It’s against the law,” he explains. Even if an employee voluntarily resigns as part of a workers’ comp settlement, they can still pursue a civil lawsuit afterward, claiming discrimination or wrongful termination.
Adreani recalled a case in which a restaurant settled a workers’ comp claim for $50,000, only to face a civil lawsuit shortly after. “The client thought that settling the workers’ comp claim did away with the civil claim, and it just doesn’t,” he emphasized. Restaurant owners must know that resolving one legal issue doesn’t necessarily mean the end of their legal troubles.
Actionable Tip: When settling a workers’ comp claim, clarify that the settlement applies only to workers’ compensation and seek legal guidance on handling any potential civil claims separately.
4. Proactive Measures: How to Avoid Double Dipping
The best defense against double claims, according to Adreani, is a proactive approach. Self-insured restaurant groups, like CRMBC, have an advantage because they are typically more involved in managing workers’ comp claims through third-party administrators (TPAs). However, Adreani stressed the importance of being vigilant from the moment a workers’ comp claim is filed. “Get it treated, get it handled right away, and get things under oath,” he advised. Locking employees into their workers’ comp statements early can reduce their ability to file a contradictory civil claim later.
Restaurant owners also need to communicate discrimination policies clearly with employees. Adreani suggests having posters, handbooks, and direct communication in place to inform employees that discrimination, including based on injury or disability, is taken seriously and should be reported immediately. This can help prevent civil claims from arising long after the fact when the details are murkier and more complicated to refute.
Actionable Tip: Work with your TPA to handle all workers’ comp claims efficiently and thoroughly. Also, make sure your employee policies regarding discrimination are clear and well-communicated.
For restaurant owners, workers’ compensation claims are challenging enough without the added threat of civil litigation. Understanding the risks of dual claims, preparing for inconsistent arguments, and taking proactive steps can help mitigate these issues. As Michael Adreani shared in the podcast, being informed and ready to act is the key to protecting your business from unnecessary legal exposure.
By staying on top of claims management, communicating openly with employees, and seeking legal guidance, restaurant owners can navigate the complexities of workers’ comp and civil claims without falling into the double-dipping trap.
At CRMBC, we specialize in helping restaurant owners navigate the complexities of workers’ compensation and civil litigation. With our expert team and dedicated third-party administrators, you can stay ahead of potential risks and protect your business from costly claims. If you’re looking for tailored support and proactive solutions, don’t wait until it’s too late. Contact us today to learn how CRMBC can help safeguard your business and streamline your workers’ comp processes. Reach out to info@crmbc.com for more information.
Kaya Stanley is an attorney, published author, business owner, and highly sought-after strategic turnaround expert. Ms. Stanley serves as CEO and Chairman of the Board for CRMBC, the largest restaurant workers’ compensation self-insured group in California, and she is the Licensee for TEDxReno, an independently organized TEDx Event.
Throughout her 22 years of practicing law, Ms. Stanley has served as outside counsel for Wal-Mart and Home Depot. She was voted one of the country’s “Top 25 OZ Attorneys” by Opportunity Zone Magazine and published a best-selling book called “The Employer’s Guide to Obamacare.” Before that, she earned her master’s degree in social work and public policy, after which she worked with at-risk girls in Detroit and lobbied for women and families.
