2011 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

5-25-2011

Michael Swartz v. Windstream Comm Inc

Precedential or Non-Precedential: Non-Precedential

Docket No. 10-3313

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Recommended Citation

"Michael Swartz v. Windstream Comm Inc" (2011). 2011 Decisions. Paper 1201.

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT 

_____________

No. 10-3313

_____________

MICHAEL J. SWARTZ, 

Appellant

v.

WINDSTREAM COMMUNICATIONS, INC.

_____________

 

On Appeal from the United States District Court

for the Western District of Pennsylvania 

District Court No. 2-09-cv-00946

United States Magistrate Judge: The Honorable Robert C. Mitchell

Submitted Pursuant to Third Circuit L.A.R. 34.1(a)

May 10, 2011

Before: SMITH, CHAGARES, and VANASKIE, Circuit Judges

(Filed: May 25, 2011)

 

_____________________

 OPINION

_____________________ 

SMITH, Circuit Judge.

Michael Swartz brings this action for overtime pay and unlawful age 

discrimination against his former employer, Windstream Communications, Inc. 
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(“Windstream”). The Magistrate Judge granted summary judgment in 

Windstream’s favor.1 Swartz appeals. We will affirm.

I

Windstream is a telecommunications company whose affiliates provide 

telecom services in sixteen states. Swartz was employed by Windstream (or its 

predecessor) as a Sales Engineer II. In that capacity, he custom-designed 

telecommunications platforms for Windstream’s clients. Swartz was terminated on 

June 20, 2008 as the result of a corporate reorganization. He was sixty-one years 

of age at the time.

Swartz filed a complaint in the Western District of Pennsylvania 

approximately one year later. He claimed that his termination was the product of 

age discrimination—a violation of both the Age Discrimination in Employment 

Act (“ADEA”), 29 U.S.C. § 621 et seq., and the Pennsylvania Human Relations 

Act (“PHRA”), 43 Pa. Cons. Stat. § 951 et seq. Swartz also argued that he was 

entitled to overtime pay under the Fair Labor Standards Act, 29 U.S.C. § 201 et 

seq. After a period of discovery, the parties filed cross-motions for summary 

judgment. The Magistrate Judge denied Swartz’s motion, but granted the motion 

filed by Windstream. Swartz timely appealed. The Magistrate Judge exercised 

jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1367. We have jurisdiction under

 

1 The parties consented to have the Magistrate Judge conduct all pretrial and trial proceedings 

pursuant to 28 U.S.C. § 636(c).
3

28 U.S.C. § 1291.

II

We review the Magistrate Judge’s decision to grant summary judgment de 

novo and apply the same standard the Magistrate Judge was required to apply. 

Barefoot Architect, Inc. v. Bunge, 632 F.3d 822, 826 (3d Cir. 2011). Summary 

judgment is appropriate “if the movant shows that there is no genuine dispute as to 

any material fact and the movant is entitled to judgment as a matter of law.” 

Lamont v. New Jersey, --- F.3d ---, 2011 U.S. App. LEXIS 4104, at *8 (3d Cir. 

Mar. 4, 2011) (quoting Fed. R. Civ. P. 56(a)).

Swartz first claims that his termination was the product of unlawful age 

discrimination.2 Our analysis of this claim is governed by the framework set forth 

in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Smith v. City of 

Allentown, 589 F.3d 684, 691 (3d Cir. 2009). Under the McDonnell Douglas

framework, Swartz must shoulder the initial burden to make out a prima facie case 

of discrimination. Smith, 589 F.3d at 689. If he is able to do so, the burden of 

production shifts to Windstream to articulate a legitimate, non-discriminatory 

reason for its employment decision. Id. Should Windstream meet its burden, the 

presumption of discriminatory action is rebutted and Swartz must show that 

 

2 Swartz raises age discrimination claims under the ADEA and PHRA. We address these claims 

collectively because the same legal standard applies to both. Kautz v. Met-Pro Corp., 412 F.3d 

463, 466 n.1 (3d Cir. 2005).
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Windstream’s stated reasons are pretextual. Id. The Magistrate Judge held that

Swartz failed at the first McDonnell Douglas step. We are not so sure. Our 

uncertainty is of no moment, however, for even if Swartz had made out a prima 

facie case, it was rebutted by Windstream. The record shows that Swartz’s 

principal focus was in “voice” systems; that the demand for “voice” systems had 

fallen off significantly; that Swartz declined to obtain training in an alternate 

practice area; and that Swartz ultimately was terminated as part of a corporate 

reorganization. Swartz failed to come forth with sufficient evidence to prove that 

these reasons were pretextual. His claim cannot withstand scrutiny under 

McDonnell Douglas, and the Magistrate Judge properly dismissed it.

Swartz’s second claim arises under the FLSA, which entitles most

employees who work in excess of forty hours per week to overtime pay. 29 U.S.C. 

§ 207. The FLSA’s overtime provision does not apply, however, to “any employee 

employed in a bona fide executive, administrative, or professional capacity.” Id. § 

213(a)(1). An individual employed in a “bona fide administrative capacity” is 

someone:

(1) Compensated on a salary or fee basis at a rate of not 

less than $455 per week . . . exclusive of board, lodging 

or other facilities;

(2) Whose primary duty is the performance of office or 

non-manual work directly related to the management or 

general business operations of the employer or the 

employer’s customers; and
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(3) Whose primary duty includes the exercise of 

discretion and independent judgment with respect to 

matters of significance.

29 C.F.R. § 541.200.3 The parties agree that Swartz was paid in excess of $455 per 

week. This appeal centers on the second and third requirements.

Swartz argues that his primary duties were not directly related to 

Windstream’s management or general business operations. An employee’s 

primary duties are directly related to his employer’s management or general 

business operations when the employee “perform[s] work directly related to 

assisting with the running or servicing of the business.” 29 C.F.R. § 541.201(a). 

Windstream is a telecommunications provider; its business is to sell

telecommunications systems. Swartz did not sell these systems himself. Rather, 

he assisted with the sales by custom-designing telecom systems to meet each 

prospective customer’s unique needs. In this manner, Swartz’s primary duty 

constituted work that serviced Windstream’s core business—the sale of telecom 

systems. Requirement two of the “administrative employee exemption” was 

therefore satisfied. 

The third “administrative exemption” requirement states that the employee’s 

 

3 Under 29 U.S.C. § 213(a), the Secretary of Labor is empowered to define the FLSA’s 

exemptions. Regulations promulgated pursuant to this congressional delegation “have 

controlling weight unless found to be arbitrary, capricious, or manifestly contrary to the statute.” 

Smith v. Johnson & Johnson, 593 F.3d 280, 284 (3d Cir. 2010).
6

primary duty must include the exercise of discretion and independent judgment 

with respect to matters of significance. Department of Labor regulations explain 

that “the exercise of discretion and independent judgment involves the comparison 

and evaluation of possible courses of conduct, and acting or making a decision 

after the various possibilities have been considered.” 29 C.F.R. § 541.202(a). 

Windstream’s customer base was varied; it included, for example, major hospitals, 

banks, and law firms. Each customer’s needs varied with the nature of its business. 

It fell to employees such as Swartz to assess these unique needs and to design 

telecommunications systems to meet them. In so doing, Swartz had access to a

sizable product portfolio line. The inclusion (or exclusion) of different products in 

different combinations naturally impacted the ultimate sales price. Swartz’s goal 

was to find the right combination of products at a price the customer was willing to 

pay. This task required him to compare and evaluate discrete options, and to make 

a decision after he had considered each possibility. Swartz’s duties thus included 

the exercise of discretion and independent judgment. 

In sum, Swartz met the three criteria required to fall within the 

administrative exemption of the FLSA. He was not entitled to overtime pay.

III

For the reasons set forth above, we conclude that Swartz was not the subject 

of age discrimination and was not entitled to overtime pay under the FLSA. The 
7

order of the Magistrate Judge granting Windstream’s motion for summary 

judgment will be affirmed.