Win some (breach of contract), lose some (FLSA)

The Court of Appeals holds that an FLSA plaintiff cannot win his wage-and-hour claim because he falls within one of the many exemptions to the rule that entitles you to certain accumulated compensatory time and annual leave. But the court also holds that plaintiff may pursue a breach of contract claim. Win some, lose some.

The case is Schwartz v. City of New York, a summary order issued on December 5. A complicated analysis guides FLSA cases, as the statute and regulations employ various exceptions that make certain employees exempt from the statute's protections. One exception is for employees who work in "bona fide executive, administrative, or professional capacities." We consider in part whether the plaintiff's "primary dut[ies] include the exercise of discretion and independent judgment with respect to matters of significance." Under the regulations, the “phrase ‘discretion and independent judgment’" is analyzed "in the light of all the facts involved in the particular employment situation. Relevant factors include “whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices”; “whether the employee has authority to waive or deviate from established policies and procedures without prior approval”; “whether the employee provides consultation of expert advice to management”; “whether the employee is involved in planning long- or short-term business objectives”; and “whether the employee investigates and resolves matters of significance on behalf of management.”

Plaintiff cannot get around the exception, and he thus loses on summary judgment. The Court of Appeals (Park, Menashi and Kearse) says that in his role at the Department of Design and Construction for New York City, he built a sophisticated data tracking system from the ground up, had authority to formulate or implement policies, helped planning long or short term business objectives at the agency, raised red flags when projects were not progressing, his responsibilities related to adjusting budget projections, and gave advice almost daily to the Assistant Commissioner and met with public officials. For purposes of the FLSA, plaintiff is a professional and exercises considerable judgment.

However, plaintiff may proceed on his City law claim, which permits overtime pay for certain classes of employees. On the breach of contract claim, plaintiff survives the motion to dismiss, however, and discovery will proceed on that claim. The trial court said plaintiff can only pursue this claim in an Article 78 proceeding, which is an expedited state-court action against administrative agencies that must be filed within a four-month statute of limitations instead of the more generous SOL for contract claims. The Court of Appeals holds that plaintiff may bring this case in federal court without bothering with the Article 78 process because breach of contract claims are not covered under Article 78. The authority for that holding is Finley v. Giacobbe, 78 F.3d 1285 (2d Cir. 1996).