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Berry v. Playboy Enterprises Inc.

Decided: August 15, 1984.

CAROLYN AND LAWRENCE BERRY, PLAINTIFFS-APPELLANTS,
v.
PLAYBOY ENTERPRISES, INC., AND PLAYBOY OF SUSSEX, INC., DEFENDANTS-RESPONDENTS



Sullivan, and Judges King and Bilder. The opinion of the court was delivered by King, J.A.D.

King

This appeal presents the issue of whether an employer has a duty to explain with reasonable care an employee's options as to health and other supplemental benefits upon hiring. The appeal is taken from a summary judgment in favor of defendant Playboy Enterprises, Inc. The plaintiffs alleged that defendants' agents negligently misrepresented plaintiff Carolyn Berry's options for a health-benefit plan when she was hired as a cook at Playboy's Great Gorge Resort in Sussex County. Plaintiffs claim that as a result they suffered money damages because they were without family medical benefits for the first 90 days of Carolyn Berry's employment. Her husband, plaintiff Lawrence Berry, was injured during that period and was without medical insurance. We conclude that defendant had a duty to use reasonable care in explaining employment benefit options. Because the record before us seems to generate factual conflict, because the issue is somewhat novel*fn1 and because the parties' credibility is critical to the dispositive issue, we reverse and remand for a plenary hearing on the merits.

This is the factual background. Carolyn Berry was hired as a banquet cook by Playboy on March 4, 1981. At that time she signed this document called "Playboy Benefit Program Enrollment and Record Card":

From this card it is unclear whether dependent coverage was declined or accepted. The entry for "Dependent Coverage" is marked "Spouse Only" but Carolyn Berry also signed the entry declining dependent coverage. She also signed an "Employee Record Card" on the same date, electing union status with the local of the Hotel-Restaurant Employees and Bartenders Union, and indicating that she chose dependent coverage with an effective date of June 4, 1981.

According to the collective bargaining agreement between Playboy and the union local, the "health, hospitalization and life insurance benefits are reserved for all full-time employees who have completed at least ninety (90) continuous calendar days of service." During the 90-day period, on March 24, plaintiff

Lawrence Berry was injured in an accident. The Berrys' claim that the medical plan refused to pay his medical bills because of the 90-day waiting period. Of further note, Carolyn Berry never filed a grievance under her union's collective bargaining agreement. The core of the dispute is plaintiffs' contention that Carolyn Berry was never told that she could have chosen either salary or hourly status and that in a salaried status she would have had immediate health care benefits for herself and her husband.

The transcript of argument in the Law Division reveals that summary judgment was granted solely because Carolyn Berry was a union member and therefore subject to the collective bargaining agreement, which the trial judge interpreted as requiring recourse to prescribed grievance procedures. That Carolyn Berry was a union member is beyond cavil on this record and the trial judge correctly so found. However, this finding does not necessarily mean that the present dispute is the proper subject of a grievance claim.

The Berrys' complaint sounds in tort. They claim that they incurred extensive medical expenses because of defendants' "negligence, misrepresentation and misconduct." Specifically, they allege in the complaint that

1. On or about the latter part of February, 1981, the plaintiff, Carolyn Berry, interviewed for a job at Playboy Club, Great Gorge, Sussex County, New Jersey.

2. At that time, she was interviewed by the personnel department and the chef, Peter Enbler, all agents, servants or employees of Playboy Enterprises, Inc., Playboy of Sussex Inc., and/or ABC Corporation, a fictitious name.

4. This plaintiff was advised by the above persons to receive her compensation by hourly wage, rather than the salary rate for her position.

5. As a result of this instruction, and unknown to the plaintiff, she became eligible for a medical benefits plan requiring a ninety-day waiting period, rather than a medical benefit plan ...


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