21-2445-cv Schwartz v. City of New York
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals for the Second Circuit, 2 held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of 3 New York, on the 5th day of December, two thousand twenty-two. 4 5 PRESENT: 6 AMALYA L. KEARSE, 7 MICHAEL H. PARK, 8 STEVEN J. MENASHI, 9 Circuit Judges. 10 _____________________________________ 11 12 JACOB SCHWARTZ, 13 14 Plaintiff-Appellant, 15 16 v. 21-2445-cv 17 18 CITY OF NEW YORK, 19 20 Defendant-Appellee. 21 _____________________________________ 22 23 FOR PLAINTIFF-APPELLANT: ARTHUR Z. SCHWARTZ, Advocates for 24 Justice, Chartered Attorneys, New York, NY. 25 26 FOR DEFENDANT-APPELLEE: LORENZO DI SILVIO (Richard Dearing, Scott 27 Shorr, on the brief) for Hon. Sylvia O. Hinds- 28 Radix, Corporation Counsel of the City of 29 New York, New York, NY. 30 1 Appeal from a judgment of the United States District Court for the Southern District of
2 New York (Cronan, J.).
3 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
4 DECREED that the judgment of the district court is AFFIRMED in part and VACATED in part,
5 and this case is REMANDED for further proceedings consistent with this order.
6 Plaintiff-Appellant Jacob Schwartz worked for Defendant-Appellee City of New York in
7 the Department of Design and Construction (“DDC”) from 2015 to 2017. Schwartz brought suit
8 against his former employer alleging that, upon his termination, the City failed to pay him for his
9 accumulated compensatory time and annual leave. Schwartz brought claims under the Fair Labor
10 Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”); the New York City Administrative Code,
11 N.Y.C., N.Y. Admin Code § 12-108; and common law for breach of oral contract and quantum
12 meruit. The district court (Torres, J.) dismissed Schwartz’s state-law claims under Federal Rule
13 of Civil Procedure 12(b)(6). The district court (Cronan, J.) later granted summary judgment in
14 favor of the City on Schwartz’s FLSA claim, concluding that Schwartz was exempt from FLSA
15 protection under the statute’s administrative-employee exemption. Schwartz appeals both
16 decisions. We assume the parties’ familiarity with the facts, the procedural history, and the issues
17 on appeal.
18 I. Summary Judgment
19 “We review a district court’s grant of summary judgment de novo, construing the evidence
20 in the light most favorable to the party opposing summary judgment and drawing all reasonable
21 inferences in her favor.” Guan v. City of New York, 37 F.4th 797, 804 (2d Cir. 2022). Summary
22 judgment is appropriate where “the movant shows that there is no genuine dispute as to any
23 material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).
2 1 “Congress enacted the Fair Labor Standards Act . . . in order to correct ‘labor conditions
2 detrimental to the maintenance of the minimum standard of living necessary for health, efficiency,
3 and general well-being of workers.’” Flood v. Just Energy Mktg. Corp., 904 F.3d 219, 227 (2d
4 Cir. 2018) (quoting 29 U.S.C. § 202(a)). The FLSA contains a number of exemptions to these
5 protections, which are “as much a part of the FLSA’s purpose as the overtime-pay requirement”
6 and must be given “a fair reading.” Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134, 1142
7 (2018).
8 As relevant here, the FLSA provides an exemption for employees who work in “bona fide
9 executive, administrative, or professional capacit[ies].” 29 U.S.C. § 213(a)(1). This exemption
10 includes “any employee” (1) who is “[c]ompensated on a salary or fee basis” at a certain rate; (2)
11 whose “primary duty is the performance of office or non-manual work directly related to the
12 management or general business operations of the employer or the employer’s customers”; and (3)
13 whose “primary duty includes the exercise of discretion and independent judgment with respect to
14 matters of significance.” 29 C.F.R. § 541.200(a).
15 Federal regulations direct courts to consider the “phrase ‘discretion and independent
16 judgment’ . . . in the light of all the facts involved in the particular employment situation in which
17 the question arises.” Id. § 541.202(b). Factors relevant to this analysis include “whether the
18 employee has authority to formulate, affect, interpret, or implement management policies or
19 operating practices”; “whether the employee has authority to waive or deviate from established
20 policies and procedures without prior approval”; “whether the employee provides consultation or
21 expert advice to management”; “whether the employee is involved in planning long- or short-term
22 business objectives”; and “whether the employee investigates and resolves matters of significance
23 on behalf of management[.]” Id.
3 1 Schwartz appeals the district court’s conclusion that he is an exempt worker under this
2 provision. Schwartz does not challenge the first two prongs of the administrative exemption.
3 Instead, he argues there are disputed material issues of fact as to whether he satisfied the third
4 prong of the exemption. Schwartz’s arguments are unavailing.
5 As the district court explained, the undisputed evidence in the record—particularly
6 Schwartz’s own deposition testimony—demonstrates that Schwartz’s work at DDC satisfied
7 several factors relevant to the prong-three analysis. For example, Schwartz testified that, on his
8 own initiative, he built a “more sophisticated data tracking system” from “the ground up” to replace
9 DDC’s existing tracking system. App’x 122. This testimony demonstrates one way that he had
10 “authority to formulate, affect, interpret, or implement management policies or operating
11 practices.” 29 C.F.R. § 541.202(b). Schwartz also played a role “in planning long- or short-term
12 business objectives” at DDC, id., as exemplified by the prominent role he played in the work-order
13 vetting process, App’x 121-122, his oversight of individual projects including “raising the red
14 flags” when a project was not progressing, App’x 523, and his responsibilities related to adjusting
15 budget projections, App’x 126.
Free access — add to your briefcase to read the full text and ask questions with AI
21-2445-cv Schwartz v. City of New York
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals for the Second Circuit, 2 held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of 3 New York, on the 5th day of December, two thousand twenty-two. 4 5 PRESENT: 6 AMALYA L. KEARSE, 7 MICHAEL H. PARK, 8 STEVEN J. MENASHI, 9 Circuit Judges. 10 _____________________________________ 11 12 JACOB SCHWARTZ, 13 14 Plaintiff-Appellant, 15 16 v. 21-2445-cv 17 18 CITY OF NEW YORK, 19 20 Defendant-Appellee. 21 _____________________________________ 22 23 FOR PLAINTIFF-APPELLANT: ARTHUR Z. SCHWARTZ, Advocates for 24 Justice, Chartered Attorneys, New York, NY. 25 26 FOR DEFENDANT-APPELLEE: LORENZO DI SILVIO (Richard Dearing, Scott 27 Shorr, on the brief) for Hon. Sylvia O. Hinds- 28 Radix, Corporation Counsel of the City of 29 New York, New York, NY. 30 1 Appeal from a judgment of the United States District Court for the Southern District of
2 New York (Cronan, J.).
3 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
4 DECREED that the judgment of the district court is AFFIRMED in part and VACATED in part,
5 and this case is REMANDED for further proceedings consistent with this order.
6 Plaintiff-Appellant Jacob Schwartz worked for Defendant-Appellee City of New York in
7 the Department of Design and Construction (“DDC”) from 2015 to 2017. Schwartz brought suit
8 against his former employer alleging that, upon his termination, the City failed to pay him for his
9 accumulated compensatory time and annual leave. Schwartz brought claims under the Fair Labor
10 Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”); the New York City Administrative Code,
11 N.Y.C., N.Y. Admin Code § 12-108; and common law for breach of oral contract and quantum
12 meruit. The district court (Torres, J.) dismissed Schwartz’s state-law claims under Federal Rule
13 of Civil Procedure 12(b)(6). The district court (Cronan, J.) later granted summary judgment in
14 favor of the City on Schwartz’s FLSA claim, concluding that Schwartz was exempt from FLSA
15 protection under the statute’s administrative-employee exemption. Schwartz appeals both
16 decisions. We assume the parties’ familiarity with the facts, the procedural history, and the issues
17 on appeal.
18 I. Summary Judgment
19 “We review a district court’s grant of summary judgment de novo, construing the evidence
20 in the light most favorable to the party opposing summary judgment and drawing all reasonable
21 inferences in her favor.” Guan v. City of New York, 37 F.4th 797, 804 (2d Cir. 2022). Summary
22 judgment is appropriate where “the movant shows that there is no genuine dispute as to any
23 material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).
2 1 “Congress enacted the Fair Labor Standards Act . . . in order to correct ‘labor conditions
2 detrimental to the maintenance of the minimum standard of living necessary for health, efficiency,
3 and general well-being of workers.’” Flood v. Just Energy Mktg. Corp., 904 F.3d 219, 227 (2d
4 Cir. 2018) (quoting 29 U.S.C. § 202(a)). The FLSA contains a number of exemptions to these
5 protections, which are “as much a part of the FLSA’s purpose as the overtime-pay requirement”
6 and must be given “a fair reading.” Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134, 1142
7 (2018).
8 As relevant here, the FLSA provides an exemption for employees who work in “bona fide
9 executive, administrative, or professional capacit[ies].” 29 U.S.C. § 213(a)(1). This exemption
10 includes “any employee” (1) who is “[c]ompensated on a salary or fee basis” at a certain rate; (2)
11 whose “primary duty is the performance of office or non-manual work directly related to the
12 management or general business operations of the employer or the employer’s customers”; and (3)
13 whose “primary duty includes the exercise of discretion and independent judgment with respect to
14 matters of significance.” 29 C.F.R. § 541.200(a).
15 Federal regulations direct courts to consider the “phrase ‘discretion and independent
16 judgment’ . . . in the light of all the facts involved in the particular employment situation in which
17 the question arises.” Id. § 541.202(b). Factors relevant to this analysis include “whether the
18 employee has authority to formulate, affect, interpret, or implement management policies or
19 operating practices”; “whether the employee has authority to waive or deviate from established
20 policies and procedures without prior approval”; “whether the employee provides consultation or
21 expert advice to management”; “whether the employee is involved in planning long- or short-term
22 business objectives”; and “whether the employee investigates and resolves matters of significance
23 on behalf of management[.]” Id.
3 1 Schwartz appeals the district court’s conclusion that he is an exempt worker under this
2 provision. Schwartz does not challenge the first two prongs of the administrative exemption.
3 Instead, he argues there are disputed material issues of fact as to whether he satisfied the third
4 prong of the exemption. Schwartz’s arguments are unavailing.
5 As the district court explained, the undisputed evidence in the record—particularly
6 Schwartz’s own deposition testimony—demonstrates that Schwartz’s work at DDC satisfied
7 several factors relevant to the prong-three analysis. For example, Schwartz testified that, on his
8 own initiative, he built a “more sophisticated data tracking system” from “the ground up” to replace
9 DDC’s existing tracking system. App’x 122. This testimony demonstrates one way that he had
10 “authority to formulate, affect, interpret, or implement management policies or operating
11 practices.” 29 C.F.R. § 541.202(b). Schwartz also played a role “in planning long- or short-term
12 business objectives” at DDC, id., as exemplified by the prominent role he played in the work-order
13 vetting process, App’x 121-122, his oversight of individual projects including “raising the red
14 flags” when a project was not progressing, App’x 523, and his responsibilities related to adjusting
15 budget projections, App’x 126. Further, as the district court explained, the undisputed evidence
16 also makes clear that Schwartz provided advice “[a]lmost daily” to the Assistant Commissioner,
17 met with several city officials, and attended meetings at City Hall, S. App’x 37, thereby providing
18 “consultation or expert advice to management,” 29 C.F.R. § 541.202(b).
19 On appeal, Schwartz attempts to identify various “disputed” facts that would foreclose
20 summary judgment. But none of these ostensible disputes undermines or alters the district court’s
21 analysis. For example, Schwartz argues he “did not ‘manage’ the vetting, he performed the
22 vetting.” Appellant’s Br. at 34. But this distinction is irrelevant. Schwartz’s deposition testimony
23 made clear that he was responsible for working with dozens of contractors and resolving the
4 1 “constant” problems he identified during the vetting process. App’x 121-122. Schwartz also
2 testified that he was initially working “hand-in-hand” with Fabian Perez and then later with
3 Victoria Kravits who “tended to be sort of like an assistant” to him. App’x 124-25. Whether or
4 not Schwartz was “managing” the vetting process, he had “significant latitude for judgment on
5 matters vital to both short- and long-term business objectives.” S. App’x 35.
6 Schwartz also gathers the testimony of various supervisors in an effort to prove that his job
7 involved only “collecting information,” “synthesiz[ing] the information into reports that could be
8 understood,” “rais[ing] concerns,” “reconcil[ing] information that ensured that it was accurate,”
9 “creating reports” and “attend[ing] meetings in order to present reports or discuss the data
10 collection process.” Appellant’s Br. at 34-36. Schwartz does not explain, however, why his role
11 in collecting and analyzing significant volumes of data used to inform DDC’s decision-making
12 somehow undermines the district court’s finding that he exercised discretion and independent
13 judgment with respect to matters of importance. Cf. 29 C.F.R. § 541.203(b) (“Employees in the
14 financial services industry generally meet the duties requirements for the administrative exemption
15 if their duties include work such as collecting and analyzing information . . . .”).
16 Schwartz thus meets the requirements for the FLSA’s administrative exemption, and the
17 district court correctly granted summary judgment in favor of the City.
18 II. Motion to Dismiss
19 We review de novo a district court’s grant of a motion to dismiss under Rule 12(b)(6) for
20 failure to state a claim upon which relief can be granted. Bldg. Indus. Elec. Contractors Ass’n v.
21 City of New York, 678 F.3d 184, 187 (2d Cir. 2012). “[O]nly a complaint that states a plausible
22 claim for relief survives a motion to dismiss.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).
5 1 First, the district court failed to consider fully whether Schwartz could base a claim under
2 Section 12-108 of the New York City Administrative Code on the City of New York’s Career and
3 Salary Plan and the Department of Design and Construction’s Employee Manual (“DDC
4 Manual”). In relevant part, Section 12-108 provides that:
5 [T]he mayor may authorize the head of any agency to require any officer or 6 employee in such agency or any class or group of officers or employees in such 7 agency to work in excess of the maximum number of hours of employment 8 prescribed for such officer or employee or class or group of officers or employees 9 by any statute, general, special or local, provided that each such officer or employee 10 shall be paid overtime compensation for such work at not less than his or her regular 11 basic pay rate.
12 N.Y.C., N.Y., Administrative Code § 12-108. The district court dismissed Schwartz’s claim
13 because his complaint does not identify any statute establishing 35 hours as the weekly maximum
14 number of hours of employment. But the court did not address whether Schwartz could state a
15 claim under the New York City Administrative Code based on the DDC Manual if, as Schwartz
16 alleges, it was “authorized by Section 12-108.” Appellant’s Br. at 21.
17 Second, the district court incorrectly concluded that Schwartz’s claims for breach of an
18 oral contract and quantum meruit failed because the claims should have been brought in an Article
19 78 proceeding and the four-month statute of limitations for any such proceeding had long-since
20 passed. See N.Y. C.P.L.R. §§ 7801; 217(1). “New York courts have held that article 78 is
21 inapplicable to contract actions against the state government that seek damages as the principal
22 remedy.” Finley v. Giacobbe, 79 F.3d 1285, 1291 (2d Cir. 1996). The district court erred by
23 relying on Finley for the proposition that an employee seeking damages based on wrongful
24 termination was required to bring her claim in an Article 78 proceeding. In Finley, “all [the
25 plaintiff’s] claims on appeal (including her back pay claim) depend[ed] on a right to reinstatement,
26 an issue that . . . must be first addressed in an article 78 proceeding.” Id. at 1293. So it was clear
6 1 that “a successful article 78 proceeding for reinstatement [was] a prerequisite to a claim for
2 damages by a discharged public employee.” Id. 1292. There is no such prerequisite here, where
3 Schwartz’s claim for damages is not based on wrongful discharge and does not depend on any
4 right to reinstatement. This is also not a case in which requiring an Article 78 proceeding would
5 “conserve[] public money” by ensuring that claims are brought promptly “so that the accrual of
6 damages can be arrested[.]” Id. at 1292-93. Schwartz seeks damages based on a finite number of
7 hours he accrued during his employment period.
8 The City offers an alternative ground for affirming the district court’s dismissal of
9 Schwartz’s common-law claims: “Schwartz has no standing to assert such common-law claims
10 when a citywide [collective bargaining agreement (“CBA”)] exclusively governed his pay and
11 leave rights” and his claims were not filed under the “exclusive procedures established by that
12 agreement.” Appellee’s Br. at 45. But Nakahata v. New York-Presbyterian Healthcare System,
13 Inc., 723 F.3d 192 (2d Cir. 2013), squarely forecloses this argument. There, this Court held that a
14 CBA could not be the basis for a dismissal where “[n]o CBAs were pled or attached to the
15 complaints” because “[w]e do not consider matters outside the pleadings in deciding a motion to
16 dismiss for failure to state a claim.” Id. at 202. Even if Schwartz’s claims are foreclosed by his
17 CBA, “a motion addressed to the adequacy of the pleadings is not necessarily the proper place for
18 [the issue] to be decided.” Id. at 203.
19 We thus vacate the district court’s dismissal of Schwartz’s state-law claims. Because we
20 affirm the grant of summary judgment on the FLSA claim, which is the only basis for federal
21 jurisdiction, we remand to the district court to determine whether to exercise supplemental
22 jurisdiction over Schwartz’s state-law claims, or to dismiss those claims without prejudice. See,
23 e.g., Valencia v. Lee, 316 F.3d 299, 308 (2d Cir. 2003) (the “interplay between the responsibilities
7 1 imposed by municipal law and those imposed by state law” may pose “complex questions . . . best
2 left to the courts of the state when the early disposition of all federal claims makes the federal
3 court’s resolution of such state-law claims unnecessary”).
4 We have considered the remainder of Schwartz’s arguments and find them to be without
5 merit. For the foregoing reasons, the judgment of the district court is AFFIRMED in part and
6 VACATED in part, and this case is REMANDED for further proceedings consistent with this
7 order.
8 FOR THE COURT: 9 Catherine O’Hagan Wolfe, Clerk of Court 10