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Varrallo v. Hammond Inc.

September 6, 1996

PHILIP VARRALLO

APPELLANT

v.

HAMMOND INCORPORATED; WILLIAM ABEL



On Appeal From the United States District Court For the District of New Jersey

(D.C. Civil Action No. 93-cv-05365)

BEFORE: BECKER, STAPLETON and MICHEL, *fn* Circuit Judges

STAPLETON, Circuit Judge

Argued July 25, 1996

Filed September 6, 1996)

OPINION OF THE COURT

After thirty-four years of service to his employer Hammond Inc., appellant Philip Varrallo was fired for allegedly falsifying his time cards. Insisting that he was simply following the instructions given to him by his supervisor William Abel, Varrallo brought suit in the Superior Court of New Jersey against his employer for breach of contract and against his supervisor for tortious interference in his employment. The case was removed to the United States District Court for the District of New Jersey, where summary judgment was granted to defendants on all counts. Because we agree with the district court that Varrallo's employment was "at will," we will affirm the judgment with respect to Hammond. Because there is a genuine issue of material fact regarding Abel's alleged interference, however, we will reverse the grant of summary judgment with respect to this claim and remand for further proceedings.

I.

A.

We have plenary review over a grant of summary judgment, and apply the same test that the district court should have used originally. Aman v. Cort Furniture Rental Corp., 85 F.3d 1074, 1081 (3rd Cir. 1996). That is, a summary judgment should be sustained only if there is "no genuine issue of material fact" and "the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Where, as here, the nonmoving party has supported his assertions regarding material facts by affidavits and other documentary material, a summary judgment in favor of the moving party cannot be affirmed. Aman, 85 F.3d at 1080. The facts set forth below are supported by documents and affidavits tendered by Varrallo.

B.

Caleb Stillson Hammond founded what is now known as Hammond Incorporated ("Hammond") in 1900. In 1958, some years after relocating to New Jersey, the company hired Philip Varrallo as a draftsman. Varrallo was eventually promoted to Lead Technician in the drafting department. In 1989, his department head, William Abel, put Varrallo in charge of the "Hammond Atlas of the World" project. Although the original completion date was July 1992, it became apparent early that year that Hammond would not meet the target. Abel therefore instructed Varrallo to work as much overtime as necessary to complete the project, *fn1 giving him a key to open the building. Varrallo often started work at 6 AM, stayed late, and worked weekends.

That September, Abel asked Varrallo to work even more overtime. *fn2 Abel told Varrallo to start at 5 AM whenever he wished, but to put 6 AM on his time card because a 5 AM start would upset the payroll department. He instructed Varrallo to put the extra hour at the end of the day. He further told Varrallo: (1) to work through lunch, adding that time to the end of the day, (2) to add the hours accumulated by "snow time" *fn3 whenever he wanted, and (3) to take a few hours off with pay, because he was doing a good job.

In early 1993, Ann Roberts, Vice President of Human Resources, received complaints that Varrallo was overstating his hours. She examined his time records, and found that on two days, January 16 and January 30 of that year, Varrallo's time cards (which stated that he had worked from 6 AM to 4 PM on each of these days) conflicted with building security records (which indicated 5:54 AM-2:41 PM and 5:45 AM-2:53 PM hours). She reported this to Kathy Hammond, Executive Vice President and Chief Operating Officer of Hammond Inc., who decided to keep close watch of Varrallo's time records. Kathy Hammond told Abel about the apparent inconsistencies that had come up and instructed him to "see if he noticed anything." Abel never reported anything back to her.

Later, Roberts found that Varrallo's card from February 20th had apparently been altered, and told Kathy Hammond. Roberts also thought it strange that Varrallo's March 6th card only indicated hours of 6 AM-1 PM when he usually worked 6 AM-4 PM on Saturdays. She informed Kathy Hammond of this, but no action was taken. Roberts became more concerned when she compared Varrallo's March 18 and March 20 cards (which indicated 6 AM-5:30 PM and 6 AM-1 PM working hours, respectively, with a 12 noon-12:45 PM lunch break on the 18th) with Abel's reports regarding these days. Abel told Roberts that, on those days, Varrallo had left at 4:30 PM and 10:30 AM respectively. Upon hearing from Roberts of these latest apparent violations, Kathy Hammond at last decided "that we had enough violations of our policy to go ahead with termination." It was also decided that Roberts would first ask Varrallo about the apparent violations.

On March 24, 1993, Roberts called in Abel and Varrallo and confronted Varrallo about the February 20, March 6, March 18, and March 20 inconsistencies. Varrallo explained the February 20 alteration as having been done by someone else, with no deceptive intent, and found nothing wrong with the March 6 card. As for the last two, he explained that he had come in before 6 AM on March 17 *fn4 and was taking credit for it the next day, that he had left work at 12:05 PM on March 20, not 10:30 AM, and that there had been a two hour snow delay on March 16 for which he was taking credit later in that week. He related the instructions Abel had given him concerning coming in early, "snow time," and his time cards. Abel did not say a word during this meeting.

Upon hearing this explanation, Roberts said that she would have to investigate further. Specifically, she looked into the computerized building records to see if Varrallo's account of 5 AM openings was correct. She found that, at least for a two-week period in September 1992, the building records showed 5 AM openings while Varrallo's time cards showed 6 AM starts. She did not, however find anything that matched the January dates. The next day, Roberts called Varrallo and Abel into her office again and terminated Varrallo. Abel again said nothing.

II.

This action was removed from New Jersey Superior Court, Law Division, by defendants pursuant to 28 U.S.C. Section(s) 1441. The district court had original jurisdiction over Count Four of the complaint, now dismissed, pursuant to 28 U.S.C. Section(s) 1331 and 29 U.S.C. Section(s) 216(b) (the Fair Labor Standards Act), and supplemental jurisdiction over the other counts pursuant to 28 U.S.C. Section(s) 1367. The district court also had original jurisdiction over all counts pursuant to ...


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