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 O R 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.
At a stated term of the United States Court of Appeals for the Second Circuit, 1 held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of 2 New York, on the 5 t h da y of D e c e m b e r , two thousand twenty

- two. 3 4 PRESENT: 5 AMALYA L. KEARSE , 6 MICHAEL H. PARK , 7 STEVEN J. MENASHI, 8 Circuit Judges. 9

_____________________________________ 10 11 JACOB SCHWARTZ, 12 13 Plaintiff

- Appellant, 14 15

v. 21

- 2445

- cv 16 17 CITY OF NEW YORK, 18 19 Defendant

- Appellee. 20

_____________________________________ 21 22 F OR PLAINTIFF

- APPELL ANT : A RTHUR Z. S CHWARTZ , Advocates for 23 Justice, Chartered Attorneys, New York, NY. 24 25 F OR DEFENDANT

- APPELL EE : L ORENZO D I S ILVIO (Richard Dearing, Scott 26 Shorr, on the brief ) for Hon. Sylvia O. Hinds

27 Radix, Corporat ion Counsel of the City of 28 New York, New York, NY

. 29 302 Appeal from a judgment of the United Stat es District Court for the Southern District of 1
New York (Cronan
, J

. ). 2

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND 3

DECREED that the judgment of the district court is AFFIRMED in part and VACATED in part, 4

and this case is REMANDED for further proceedings consistent with this o r d e r

. 5

Plaintiff

- Appellant Jacob Schwartz worked for Defendant

- Appellee City of New York in 6

the Department of Design and Construction (“DDC”) from 2015 to 2017

. Schwartz brought suit 7
against his former employer allegin g that, upon his termination, the City failed to pay him for his 8
accumulated compensatory time and annual leave. Schwartz brought claims under the Fair Labor 9

Standards Act, 29 U.S.C. § 201 et seq . (“FLSA”); the New York City Administrative C ode
, 10

N.Y. C.
, N.Y. Admin Code § 12

- 108; and common law for breach of oral contract and quantum 11

meruit

. The district court (Torres, J. ) dismissed Schwartz’s state

- law claims under Federal Rule 12

of Civil Procedur e 12(b)(6). The district court (Cronan, J. ) later granted s ummary judgment in 13
favor of the City on Schwartz’s FLSA claim , concluding that Schwartz was exempt from FLSA 14
protection under the statute’s administrative

- employee exemption . Schwartz appeals both 15

decisions. We assume the parties ’ familiarity with the fa cts, the procedural history, and the issues 16
on appeal. 17

I. Summary Judgment 18

“We review a district court’s grant of summary judgment de novo , construing the evidence 19
in the light most favorable to the party opposing summary judgment and drawing all reasonable 20

i nferences in her favor.” Guan v. City of New York , 37 F.4th 797, 804 (2d Cir. 2022). Summary 21
judgment is appropriate where “the movant shows that there is no genuine dispute as to any 22
material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). 233 “Congress enacted the Fair Labor Standards Act

. . . in order to correct ‘labor conditions 1
detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, 2
and general well

- being of workers. ’ ” Flood v. Just Energy Mktg. Corp ., 904 F.3d 219, 227 (2d 3
Cir. 2018) (quoting 29 U.S.C. § 202(a)). The FLSA contains a number of exemptions to these 4
protections
, which are “as much a part of the FLSA’s purpose as the overtime

- pay requirement” 5

and must be given “a fair reading.” Encino Motorcars, LLC v. Navarro , 138 S

. Ct. 1134, 1142 6
(2018). 7
As relevant here, the FLSA provides an exemption for employees who work in “bona fide 8
executive, administrative, or professional capacit[ies].” 29 U

. S

. C

. § 213(a)(1 ). This exemption 9
includes “any employee” (1) who is “[ c ] ompensated on a salary or fee basis ” at a certain rate; (2) 10
whose “primary duty is the performance of office or non

- manual work directly related to the 11
management or general business operations of t he employer or the employer’s customers”; and (3) 12
whose “primary duty includes the exercise of discretion and independent judgment with respect to 13
matters of significance.” 29 C.F.R. § 541.200 (a)

. 14
Federal regulations direct courts to consider the “phrase ‘discretion and independent 15
judgment’

. . . in the light of all the facts involved in the particular employment situation in which 16
the question arises.” Id. § 541.202(b). Factors relevant to this analysis include “whether the 17
employee has authority to formulate, affect, interpret, or implement management policies or 18
operating practices”; “whether the employee has authority to waive or deviate from established 19
policies and procedures without prior approval”; “whether the employee provides consultation or 20
expert advice to management”; “whether the employee is involved in planning long

- or short

- term 21
business objectives”; and “whether the employee investigates and resolves matters of significance 22
on behalf of management [.] ” Id. 234 Schwartz appeals the district court’s conclusion that he is an exempt worker u nder this 1
provision. Schwartz does not challenge the first two prongs of the administrative exemption. 2

Instead, he argues there are disputed material issues of fact as to whether he satisfied the third 3

prong of the exemption

. Schwartz’s arguments are un availing. 4
As the district court explained, the undisputed evidence in the record

— particularly 5
Schwartz’s own deposition testimony

— demonstrates that Schwartz’s work at DDC satisfied 6

several factors relevant to the prong

- three analysis

. For example, Schw artz testified that , on his 7

own initiative, he built a “more sophisticated data tracking system” from “the ground up” to replace 8
DDC’s existing tracking system. App’x 122

. This testimony demonstrates one way that he had 9
“authority to formulate, affect, i nterpret, or implement management policies or operating 10
practices.” 29 C.F.R. § 541.202(b). Schwartz also played a role “in planning long

- or short

- term 11
business objectives” at DDC
, id.
, as exemplified by the prominent role he played in the work

- order 12
vetting process, App’x 121

- 122, his oversight of individual projects including “raising the red 13
flags” when a project was not progressing, App’x 523, and his responsibilities related to adjusting 14
budget projectio ns , App’x 126. F urther, as the distri ct court explained, the undisputed evidence 15

also makes clear that Schwartz provided advice “[a]lmost daily” to the Assistant Commissioner
, 16
met with several city officials, and attended meetings at City Hall, S. App’x 37, thereby providing 17

“consultation or expert advice to management
, ” 29 C.F.R. § 541.202(b)

. 18
On appeal, Schwartz attempts to identify various “disputed” facts that would foreclose 19
summary judgment. But n one of these ostensible disputes undermine s or alter s the district court’s 20
analysis. For example, Schwartz argues he “did not ‘manage’ the vetting, he performed the 21
vetting.” Appellant’s Br. at 34. But this distinction is irrelevant . Schwartz’s deposition testimony 22
made clear that he was responsible for working with dozens of contractors an d resolving the 235 “constant” problems he identified during the vetting process. App’x 121

- 122

. Schwartz also 1
testified that he was initially working “hand

- in

- hand” with Fabian Perez and then later with 2

Victoria Kravits who “tended to be sort of like an ass istant” to him. App’x 124

- 25

. Whether or 3

not Schwartz was “manag ing ” the vetting process, he had “significant latitude for judgment on 4

matters vital to both short

- and long

- term business objectives.” S. App’x 35. 5

Schwartz also gathers the testimony of various supervisors in an effort to prove that his job 6

involved only “collecting information ,” “synthe s iz[ing] the information into reports that could be 7

understood,” “ra i s[ing] concerns,” “reconcil[ing] information that ensured that it was accurate,” 8
“creating reports” and “attend[ing] meetings in order to present reports or discuss the data 9

col lection process.” Appellant’s Br. at 34

- 36

. Schwartz does not explain, however, why his role 10
in collecting and analyzing significant volumes of data used to inform DDC’s decision

- making 11

somehow undermines the district court’s finding that he exercised di scretion and independent 12
judgment with respect to matters of importance

. Cf. 29 C.F.R. § 541.203(b) (“Employees in the 13
financial services industry generally meet the duties requirements for the administrative exemption 14

if their duties include work such as collecting and analyzing information

. . . . ”). 15
Schwartz thus meets the requirements for the FLSA’s administrative exemption, and the 16
district court correctly granted summary judgment in favor of the City. 17

II. Motion to Dismiss 18

We review de novo a district court’s grant of a motion to dismiss under Rule 12(b)(6) for 19
failure to state a claim upon which relief can be granted

. Bldg. Indus. Elec. Contractors Ass’n v. 20

City of N ew York
, 678 F.3d 184, 187 (2d Cir. 2012 ). “[O]nly a complaint that state s a plausible 21

claim for relief survives a motion to dismiss.” Ashcroft v. Iqbal
, 556 U.S. 662, 679 (2009)

. 226 First
, the district court failed to consider fully whether Schwartz could base a claim under 1

Section 12

- 108 of the New York City Administrative Code on the City of New York’s Career and 2
Salary Plan and the Department of Design and Construction’s Employee Manual (“DDC 3
Manual”) . In relevant part, Section 12

- 108 provides that: 4

[T]he mayor may authorize the head of any agency to requir e any officer or 5 employee in such agency or any class or group of officers or employees in such 6 agency to work in excess of the maximum number of hours of employment 7 prescribed for such officer or employee or class or group of officers or employees 8 by any statute, general, special or local, provided that each such officer or employee 9 shall be paid overtime compensation for such work at not less than his or her regular 10 basic pay rate. 11

N.Y.C. , N.Y., Administrative Code § 12

- 108 . The district court dismissed Schwartz’s claim 12

because his complaint does not identify any statute establishing 35 hours as the weekly maximum 13
number of hours of employment

. But the court did not address whether Schwartz could state a 14

claim under the Ne w York City Administrative Code based on the DDC Manual if, as Schwartz 15
alleges
, it was “authorized by Section 12

- 108

. ” Appellant’s Br. at 21

. 16

Second
, the district court incorrectly concluded that Schwartz’s claims for breach of an 17

oral contract and quantum meruit failed because the claims should have been brought in an Article 18
78 proceeding and the four

- month statute of limitations for any such proceeding had long

- since 19
passed. See N

. Y

. C

. P

. L

. R

. § § 7801 ; 217(1)

. “New York courts have held that arti cle 78 is 20
inapplicable to contract actions against the state government that seek damages as the principal 21
remedy.” Finley v. Giacobbe , 79 F.3d 1285 , 1291 (2d Cir. 1996) . The district court erred by 22
relying on Finley for the proposition that an employee seeking damages based on wrongful 23
termination was required to bring her claim in an Article 78 proceeding. In Finley , “all [the 24
plaintiff’s] claims on appeal (including her back pay claim) depend[ed] on a right to reinstatement, 25

an issue that

. . . must b e first addressed in an article 78 proceeding.” Id. at 1293. So it was clear 267 that “a successful article 78 proceeding for reinstatement [wa s] a prerequisite to a claim for 1
damages by a discharged public employee.” Id. 1292

. There is no such prerequisite here, where 2
Schwartz’s claim for damages is not based on wrongful discharge and does not depend on any 3
right to reinstatement

. This is also not a case in which requiring an Article 78 proceeding would 4
“conserve[] public money ” by ensuring that claims are brought promptly “so that the accrual of 5
damages can be arrested[.]” Id. at 12 92

- 93. Schwartz seeks damages based on a finite number of 6
hours he accrued during his employment period. 7
The City offers an alternative ground fo r affirming the district court’s dismissal of 8

Schwartz’s common

- law claims: “ Schwartz has no standing to assert such common

- law claims 9
when a citywide [collective bargaining agreement (“CBA”) ] exclusively governed his pay and 10
leave rights” and his claims w ere not filed under the “exclusive procedures established by that 11

agreement.” Appellee’s Br. at 45. But Nakahata v. New York

- Presbyterian Healthcare System, 12

Inc ., 723 F.3d 192 (2d Cir. 2013)
, squarely forecloses this argument. There, this Court held tha t a 13

CBA could not be the basis for a dismissal where “[n]o CBAs were pled or attached to the 14
complaints” because “[w]e do not consider matters outside the pleadings in deciding a motion to 15

dismiss for failure to state a claim.” Id

. at 202. Even if Schwar tz’s claims are foreclosed by his 16
CBA, “a motion addressed to the adequacy of the pleadings is not necessarily the proper place for 17

[the issue] to be decided.” Id. at 203. 18

We thus vacate the district court’s dismissal of Schwartz’s state

- law claims . Because we 19

affirm the grant of summary judgment on the FLSA claim, which is the only basis for federal 20
jurisdiction, we remand to the district court to determine whether to exercise supplemental 21
jurisdiction over Schwartz’s state

- law claims , or to dismiss those claims without prejudice

. S ee, 22

e.g. , Valencia v. Lee , 316 F.3d 299, 308 (2d Cir. 2003) (the “interplay between the responsibilities 238 imposed by municipal law and those imposed by state law” may pose “complex questions . . . best 1
left to the courts of the state when the early disposition of all federal claims makes the federal 2

court’s resolution of such state

- law claims unnecessary”). 3

We have considered the remainder of Schwartz’s arguments and find them to be without 4

merit. For the foregoing reasons, the judgment of the district court is AFFIRMED in part and 5

VACATED in part, and this case is REMANDED for further proceedings consistent with this 6

o r d e r

. 7

FOR THE COURT: 8 Catherine O ’ Hagan Wolfe, Cler k of Court 9 10