Court Opinion

ID: 217468
Source: CourtListenerOpinion
Date Created: 2011-05-25 19:50:51+00
Date Added: 2024-06-11T17:28:32.537050
License: Public Domain

NOT PRECEDENTIAL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.
(“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).
                                               2
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).
                                                3
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
                                           4
               (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).
                                                 5
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

                                          6
order of the Magistrate Judge granting Windstream’s motion for summary

judgment will be affirmed.

                                      7