Swartz v. Windstream Communications, Inc.

NOT PRECEDENTIAL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)
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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