Krumholz v. Village of Northport
Filing
28
MEMORANDUM AND ORDER granting in part 21 Motion for Summary Judgment; finding as moot 23 Motion for Partial Summary Judgment. For the reasons set forth in the attached Memorandum and Order, the Court grants defendant's motion for summary j udgment on the FLSA claim and declines to exercise supplemental jurisdiction over the remaining state law claims. Thus, given that the Court has declined to exercise supplemental jurisdiction over the state law claims, the cross-motions for summary judgment on the state law claims are moot. The Clerk of the Court shall enter judgment accordingly and close the case. Ordered by Judge Joseph F. Bianco on 7/10/2012. (Weber, Rebecca)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 09-cv-4277 (JFB) (ARL)
_____________________
MARYCLAIRE KRUMHOLZ,
Plaintiff,
VERSUS
VILLAGE OF NORTHPORT,
Defendant.
___________________
MEMORANDUM AND ORDER
July 10, 2012
___________________
JOSEPH F. BIANCO, District Judge:
Plaintiff
MaryClaire
Krumholz
(“Krumholz”) brought this action against the
Village of Northport (“the Village”) alleging
violations of the Fair Labor Standards Act
(“FLSA”), due process violations in
contravention of 42 U.S.C. § 1983, and
wrongful termination pursuant to New York
State law. The Village moved for summary
judgment, arguing that plaintiff is an exempt
employee under the FLSA, the Village did
not violate plaintiff’s right to due process,
and plaintiff’s action under state law is
improperly before this Court and is timebarred. 1 The Village further argued that it
was entitled to summary judgment on its
counterclaims for conversion and breach of
1
At oral argument on February 6, 2012, plaintiff
voluntarily dismissed her due process claim under
Section 1983 which, in any event, could not have
survived summary judgment on the merits for the
reasons set forth in defendant’s memorandum of law,
as well as by the Court at oral argument.
fiduciary duty. Specifically, the Village
asserted
that
plaintiff
converted
approximately $149,500 in Village funds by
(1) drafting checks payable to herself for a
total of approximately $115,900, and (2)
having the Village pay the IRS and NYS tax
on her behalf for approximately $33,600.
Plaintiff countered that she was properly
compensating herself for accumulated
“comp. time,” and believed she had been
given permission to draft checks payable to
herself. Plaintiff also cross-moved for partial
summary judgment on the wrongful
termination claim.
For the reasons set forth below, the
Court grants defendant’s motion for
summary judgment on the FLSA claim,
which is the only remaining federal claim.
In particular, the Court holds as a matter of
law, based upon the uncontroverted facts,
that plaintiff was exempt from the FLSA’s
overtime pay requirements because, as the
I. BACKGROUND
Village Treasurer, she was “employed in a
bona fide executive, administrative, or
professional
capacity.”
29
U.S.C.
§ 213(a)(1).
Although there are some
disputed facts regarding certain aspects of
plaintiff’s duties, it is undisputed that, as the
Village Treasurer, she had, inter alia, the
following primary duties and authorities: (1)
she was responsible for drafting the Village
Budget; (2) she had the authority to open
bank accounts on behalf of the Village; (3)
she had the authority to act as the sole check
signatory on behalf of the Village for checks
under $5,000; (4) she supervised the work of
the person in charge of accounts payable and
the person in charge of payroll; and (5) she
had the authority to decide where to invest
the Village’s excess money, and used her
judgment to make the decision and get the
best interest rate for the Village. These
uncontroverted facts demonstrate as a matter
of law that her primary duties certainly
relate to “the performance of office or nonmanual work directly related to the
management or general business operations”
of the Village, and “include[d] the exercise
of discretion and independent judgment with
respect to matters of significance.” 29
C.F.R. § 541.200(a)(2)-(3). Thus, plaintiff
is exempt from the FLSA’s overtime pay
requirements as an administrative employee.
No rational trier of fact could conclude
otherwise given these undisputed facts.
Accordingly, the disputed facts regarding
certain aspects of her other duties simply do
not create a genuine issue of material fact
for trial on the FLSA claim, and summary
judgment in defendant’s favor on that claim
is warranted. Given that the sole remaining
federal claim does not survive summary
judgment, the Court in its discretion declines
to exercise supplemental jurisdiction over
the state law claims, including plaintiff’s
wrongful termination claim, as well as
defendant’s counterclaims.
A. Factual Background
The Court has taken the facts set forth
below from the parties’ depositions,
affidavits, and exhibits, and from the parties’
respective Rule 56.1 Statements of Facts.
Upon consideration of a motion for
summary judgment, the Court shall construe
the facts in the light most favorable to the
non-moving party. See Capobianco v. City
of New York, 422 F.3d 47, 50 (2d Cir. 2005).
Unless otherwise noted, where a party’s 56.1
Statement is cited, that fact is undisputed or
the opposing party has pointed to no
evidence in the record to contradict it. 2
Plaintiff was appointed as the Treasurer
of the Village of Northport under the
proposal of Mayor George Doll pursuant to
the New York State Village Law and the
vote of the Village Board of Trustees
effective June 7, 2006. (Def.’s 56.1 ¶ 4.)
Plaintiff’s starting salary was $60,000 per
year plus $4,500 in lieu of health benefits.
(Id.) Plaintiff has a degree in Business
Administration from Hofstra University, and
was one quarter of the way to obtaining a
Masters in Business Administration prior to
her employment with the Village. (Id. ¶¶ 1,
2.) Before working as the Village Treasurer,
plaintiff was a Certified Public Accountant.
(Id. ¶ 2.) She worked as an accountant and
an assistant comptroller for private
companies. (Def.’s 56.1 ¶ 3; Pl.’s 56.1 ¶ 3.)
The parties do not dispute that plaintiff
had the following duties in her position as
Village Treasurer: (1) Plaintiff supervised
and reviewed the work of the payroll clerk
2
In addition, although the parties’ Rule 56.1
Statements contain specific citations to the record to
support their statements, the Court has cited to the
Rule 56.1 Statements, rather than the underlying
citation to the record, when utilizing the 56.1
Statements for purposes of this summary of facts.
2
and the accounts payable clerk. (Def.’s 56.1
¶ 14.) (2) Plaintiff signed off on the work of
the persons whom she supervised. She made
the final determination as to what was
accurate. (Id. at ¶ 15.) (3) Plaintiff was
autonomous in respect to those she
supervised and relied on her own judgment
as to supervision and training. (Id. at ¶ 16.)
(4) Plaintiff was one of only four people in
the Village authorized to sign checks. The
other three were the Village Clerk, the
Deputy Village Clerk, and the Deputy
Treasurer. 3 (Def.’s 56.1 ¶ 17; Pl.’s 56.1
¶ 17.) (5) Plaintiff was the only person other
than the Mayor who was authorized to open
banking accounts. (Def.’s 56.1 ¶ 18; Pl.’s
56.1 ¶ 18.) (6) Plaintiff reviewed others’
work, assisted others with their work,
performed bank reconciliations, made sure
items were being posted properly in the
ledger, made journal entries, corrected
miscoding of accounts, and recorded items
of depreciation. (Def.’s 56.1 ¶ 19.) (7)
Plaintiff supervised the drafting of the
Village budget and reported directly to the
Commissioner of Finance, who was a
member of the Board of Trustees. (Id. ¶ 20;
Pl.’s 56.1 ¶ 20.) (8) Plaintiff had the
assistance of department heads when she
drafted the budget. She was the department
head for the line of employees of the
Treasurer. (Def.’s 56.1 ¶ 21.) (9) Plaintiff
had the authority to decide where to invest
the Village’s excess money. She used her
judgment to make the decision and get the
best interest rate for the Village. (Id. ¶ 23.)
(10) When plaintiff was Treasurer, the
Village policy was that she could sign the
Village checks if they were for less than
$5,000, without requiring a second
signature. (Id. ¶ 28.) Indeed, plaintiff drafted
several Village general fund checks payable
to herself for amounts less than $5,000
during the period of October 31, 2007
through February 11, 2009. (Id. ¶¶ 11, 12,
39, 57.) At no time did plaintiff obtain a
second signature for any check made
payable to herself. (Id. ¶ 29.)
The parties dispute the exact nature of
some of plaintiff’s duties. For example,
defendant states that plaintiff used her
judgment to determine what money went
into the Village trust fund, and that she did
not answer to anyone in the Village. (Id.
¶ 22.) Plaintiff counters, however, that she
did not exercise any judgment in
determining what money went into the
Village trust fund, because that was
determined by the payroll system based
upon health insurance bills, and was
therefore a purely ministerial act. (Pl.’s 56.1
¶ 22.) Additionally, defendant states that
plaintiff, as Treasurer, made and drafted
several policies, including the Village policy
on travel, credit cards, and cell phone use.
(Def.’s 56.1 ¶ 25.) Plaintiff counters that,
although she physically drafted the policies,
the policies were made with the guidance of
and at the specific direction of Village
auditors and Board. (Pl.’s 56.1 ¶ 25.)
According to plaintiff, she had little or no
input as to the actual content of the policies
and did not “make” policies. (Pl.’s 56.1
¶ 25.) As stated supra, the Court construes
these disputed facts in the light most
favorable to plaintiff, the non-moving party.
From October 31, 2007 through
February 11, 2009, plaintiff drafted Village
checks payable to herself for a total of
$115,906.77. (Def.’s 56.1 ¶ 57.) Plaintiff
had the Village pay the IRS and NYS tax on
her behalf for $33,605.61. (Id.) Accordingly,
in addition to receiving her annual salary,
during the above time period, plaintiff paid
herself $149,511.77 from the Village
3
Although defendant asserts that plaintiff was one of
only three people in the Village authorized to sign
checks (Def.’s 56.1 ¶ 17), the Court has accepted the
plaintiff’s version – that the Deputy Treasurer was
also authorized to sign checks (Pl.’s 56.1 ¶ 17) – for
purposes of this motion.
3
general fund. 4 (Id.) Defendant contends that
plaintiff converted these Village funds.
Plaintiff
contends
that
she
was
compensating herself for accumulated
“comp. time,” and believed that she had
been given permission to draft the checks
payable to herself. (Pl.’s 56.1 ¶¶ 26, 37, 53.)
Plaintiff does not dispute that, when she
began her salaried position with the Village,
she had no expectation of receiving
payments for overtime. (Def.’s 56.1 ¶ 13;
Pl.’s 56.1 ¶ 13.) However, plaintiff states
that she also had no expectation that the
requirements of her position as Treasurer
would compel her to routinely work more
than the 35 hours per week specified in the
resolution appointing her to the position,
except on a limited basis during budget
season. (Pl.’s 56.1 ¶ 13.)
B. Procedural Background
Plaintiff filed the complaint in this action
on October 5, 2009. The Village answered
and counterclaimed against the plaintiff on
November 25, 2009. The Village filed its
motion for summary judgment on
September 21, 2011. On December 2, 2011,
plaintiff opposed defendant’s motion and
cross-moved for partial summary judgment.
On December 23, 2011, the Village opposed
plaintiff’s cross-motion and replied in
support of its motion for summary
judgment. On January 6, 2012, plaintiff
replied in support of its cross-motion. The
Court held oral argument on the motions on
February 6, 2012. The Court has fully
considered the arguments and submissions
of the parties.
II. STANDARD OF REVIEW
Plaintiff’s last day of work for the
Village was March 5, 2009. (Def.’s 56.1
¶ 5.) On that day, she was called to a
meeting with the Mayor and others
concerning
the
overtime 5
and
reimbursement she had taken. (Id. ¶ 6.)
Defendant contends that plaintiff was
informed that, if she did not resign by the
following week, her employment with the
Village would be terminated. (Id. ¶ 7.)
Plaintiff disputes this, pointing to a
memorandum given to the plaintiff at the
March 5, 2009 meeting that stated, “While
we complete our investigation, you are
hereby suspended indefinitely without pay.”
(Pl.’s 56.1 ¶ 7.)
The standards for summary judgment are
well settled. Pursuant to Federal Rule of
Civil Procedure 56(a), a court may only
grant a motion for summary judgment 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.” Fed. R. Civ. P. 56(a). The moving
party bears the burden of showing that he or
she is entitled to summary judgment.
Huminski v. Corsones, 396 F.3d 53, 69 (2d
Cir. 2005). “A party asserting that a fact
cannot be or is genuinely disputed must
support the assertion by: (A) citing to
particular parts of materials in the record,
including
depositions,
documents,
electronically stored information, affidavits
or declarations, stipulations (including those
made for purposes of the motion only),
admissions, interrogatory answers, or other
materials; or (B) showing that the materials
cited do not establish the absence or
presence of a genuine dispute, or that an
adverse party cannot produce admissible
evidence to support the fact.” Fed. R. Civ.
4
The Court notes that the sum of $115,906.77 and
$33,605.61 is $149,512.38. The slight disparity
between this figure and the undisputed amount cited
in the parties’ motion papers obviously had no impact
on this decision.
5
Plaintiff contends that she took accrued “comp.
time” rather than “overtime.” (Pl.’s 56.1¶ 6.)
4
to assert a conclusion without supplying
supporting arguments or facts.’” BellSouth
Telecomms., Inc. v. W.R. Grace & Co., 77
F.3d 603, 615 (2d Cir. 1996) (quoting
Research Automation Corp., 585 F.2d at
33).
P. 56(c)(1). The court “is not to weigh the
evidence but is instead required to view the
evidence in the light most favorable to the
party opposing summary judgment, to draw
all reasonable inferences in favor of that
party,
and
to
eschew
credibility
assessments.” Amnesty Am. v. Town of W.
Hartford, 361 F.3d 113, 122 (2d Cir. 2004)
(quoting Weyant v. Okst, 101 F.3d 845, 854
(2d Cir. 1996)); see Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct.
2505, 91 L. Ed. 2d 202 (1986) (summary
judgment is unwarranted if “the evidence is
such that a reasonable jury could return a
verdict for the nonmoving party”).
III. DISCUSSION
Defendant argues that plaintiff is exempt
from the FLSA because she (1) was
“employed in a bona fide executive,
administrative, or professional capacity,” 29
U.S.C. § 213(a)(1), and/or because (2) she
was an appointed policymaker employed by
a political subdivision of a state, 29 U.S.C.
§ 203(e)(2)(c)(ii)(III). 6 The Court concludes,
based upon the uncontroverted facts, that
plaintiff was exempt from the FLSA as an
administrative employee under 29 U.S.C.
§ 213(a)(1). Therefore, the Court does not
reach the question of whether plaintiff also
was exempt under the “policymaker”
exemption.
Once the moving party has met its
burden, the opposing party “‘must do more
than simply show that there is some
metaphysical doubt as to the material
facts . . . . [T]he nonmoving party must
come forward with specific facts showing
that there is a genuine issue for trial.’”
Caldarola v. Calabrese, 298 F.3d 156, 160
(2d Cir. 2002) (quoting Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 586-87, 106 S. Ct. 1348, 89 L. Ed. 2d
538 (1986) (emphasis in original)). As the
Supreme Court stated in Anderson, “[i]f the
evidence is merely colorable, or is not
significantly probative, summary judgment
may be granted.” Anderson, 477 U.S. at
249-50, 106 S. Ct. 2505 (citations omitted).
Indeed, “the mere existence of some alleged
factual dispute between the parties” alone
will not defeat a properly supported motion
for summary judgment. Id. at 247-48, 106
S. Ct. 2505 (emphasis in original). Thus, the
nonmoving party may not rest upon mere
conclusory allegations or denials but must
set forth “‘concrete particulars’” showing
that a trial is needed. R.G. Group, Inc. v.
Horn & Hardart Co., 751 F.2d 69, 77 (2d
Cir.1984) (quoting SEC v. Research
Automation Corp., 585 F.2d 31, 33 (2d Cir.
1978)). Accordingly, it is insufficient for a
party opposing summary judgment “‘merely
A. Applicable Law
Under the FLSA, employers engaged in
interstate commerce must pay overtime pay
to an employee working more than forty
hours per week “at a rate not less than one
6
The relevant text of the “policymaker” exemption is
as follows:
(C) any individual employed by a State,
political subdivision of a State, or an
interstate governmental agency, other than
such an individual –
(i) who is not subject to the civil service
laws of the State, political subdivision, or
agency which employs him; and
(ii) who –
(I) holds a public elective office of that
State, political subdivision, or agency,
[or . . . ]
(III) is appointed by such an officeholder to
serve on a policymaking level[.]
29 U.S.C. § 203(e)(2)(c)(ii)(III).
5
and one-half times the regular rate at which
he is employed.” 29 U.S.C. § 207(a)(1). Not
all workers, however, are covered by this
scheme. For example, “any employee
employed in a bona fide executive,
administrative, or professional capacity” is
exempt from the overtime pay requirements.
29 U.S.C. § 213(a)(1). FLSA exemptions
such as this one are to be “narrowly
construed.” Martin v. Malcolm Pirnie, Inc.,
949 F.2d 611, 614 (2d Cir. 1991) (citing
Arnold v. Ben Kanowsky, Inc., 361 U.S. 388,
392 (1960)). Moreover, the “employer bears
the burden of proving that its employees fall
within an exempted category of the
[FLSA].” Id. “[I]t is a strict question of law
whether the activities and responsibilities of
the employee, once established, exempt him
or her from the FLSA’s overtime
requirements.” Alberti v. Cnty. of Nassau,
393 F. Supp. 2d 151, 174 (E.D.N.Y. 2005)
(citing Tomney v. Int’l Ctr. for Disabled,
357 F. Supp. 2d 721, 739-40 (S.D.N.Y.
2005)).
weekly, or less frequent basis, a
predetermined amount” that is not subject to
deductions based on the quality or quantity
of the work performed. 29 C.F.R.
§ 541.602(a). Subject to certain exceptions,
the employee must receive “the full salary
for any week in which the employee
performs any work without regard to the
number of days or hours worked.” Id.
Under the second prong, the employee
must engage in certain “primary dut[ies].”
29 C.F.R. §§ 541.100(a)(2), 541.200(a)(2),
541.300(a)(2). An exempt “administrative”
employee must engage in the following
primary duties:
(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
(3) Whose primary duty includes the
exercise
of
discretion
and
independent judgment with respect
to matters of significance.
The Department of Labor (“DOL”) has
enacted regulations that establish a twopronged test for determining whether an
employee is exempt as “employed in a bona
fide
executive,
administrative,
or
professional capacity” under Section
213(a)(1). 7 Under the first prong, the
employees must be paid on a “salary basis”
at least $455 per week. 29 C.F.R.
§§ 541.100(a)(1),
541.200(a)(1),
541.300(a)(1). An employee is considered to
be paid on a “salary basis” if the employee
“regularly receives each pay period on a
29 C.F.R. § 541.200(a)(2)-(3).
The regulations further explain each of
these requirements. With respect to duties
“directly related to management or general
business operations,” the employee “must
perform work directly related to assisting
with the running or servicing of the
business, as distinguished, for example,
from working on a manufacturing
production line or selling a product in a
retail or service establishment.” 29 C.F.R.
§ 541.201(a). The regulations provide a nonexclusive list of examples of this type of
work, including “work in functional areas
such as tax; finance; accounting; budgeting;
auditing,” among other areas. Id.
§ 541.201(b). With respect to duties
7
The regulations promulgated by the Secretary of
Labor pursuant to an express grant of authority from
Congress under the FLSA have the force and effect
of law. They are to be given controlling weight
unless they are found to be arbitrary, capricious, or
manifestly contrary to the statute. See Freeman v.
Nat’l Broadcasting Co., 80 F.3d 78, 82 (2d Cir.
1996) (citations omitted); Reich v. State of New York,
3 F.3d 581, 587 (2d Cir. 1993).
6
independent judgment even if their decisions
or recommendations are reviewed at a
higher level.” Id. § 541.202(c). Thus, the
employee’s decisions do not need to “have a
finality that goes with unlimited authority
and a complete absence of review.” Id.
demonstrating “discretion and independent
judgment,” “the exercise of discretion and
independent
judgment
involves
the
comparison and the evaluation of possible
courses of conduct, and acting or making a
decision after the various possibilities have
been considered.” Id. § 541.202(a). Some
factors to consider in determining whether
the employee exercises discretion are:
B.
Application
As to the “salary” prong of the test,
plaintiff’s starting salary was $60,000 per
year, which constitutes a weekly salary of
$1,153.85. (Def.’s 56.1 ¶ 4.) This salary well
exceeds the minimum of $455 per week
required for an employee to fall within the
Section
213(a)
exemption.
Plaintiff
“regularly received” her pay through direct
deposit. (Def.’s 56.1 ¶ 10.) There is no
indication that plaintiff’s payments were
“subject to reduction because of variations
in the quality or quantity of the work
performed.” 29 C.F.R.
§ 541.602(a).
Accordingly, plaintiff satisfies the “salary”
prong of the test for an exemption under
Section 213(a)(1).
whether the employee has authority
to formulate, affect, interpret, or
implement management policies or
operating practices; whether the
employee
carries
out
major
assignments in conducting the
operations of the business; whether
the employee performs work that
affects business operations to a
substantial degree, even if the
employee’s assignments are related
to operation of a particular segment
of the business; whether the
employee has authority to commit
the employer in matters that have
significant financial impact; whether
the employee has authority to waive
or deviate from established policies
and procedures without prior
approval; whether the employee has
authority to negotiate and bind the
company on significant matters;
whether the employee provides
consultation or expert advice to
management; whether the employee
is involved in planning long- or
short-term
business
objectives;
whether the employee investigates
and resolves matters of significance
on behalf of management; and
whether the employee represents the
company in handling complaints,
arbitrating disputes or resolving
grievances.
Turning to the first part of the primary
duties prong – whether the employee’s
“work directly related to the management or
general business operations of the
employer” – the regulations specifically list
work in tax, finance, accounting, budgeting,
and auditing as examples of areas of work
that assist in the running of a business. 29
C.F.R. § 541.201. Plaintiff was a Certified
Public Accountant prior to her employment
with the Village. (Def.’s 56.1 ¶ 2.) She also
has a degree in Business Administration
from Hofstra University, and was one
quarter of the way to obtaining a Masters in
Business Administration. (Def.’s 56.1 ¶¶ 1,
2.) As discussed supra, plaintiff’s duties
included supervising and drafting the
Village budget, deciding where to invest the
Village’s excess money, and opening bank
accounts and signing checks. These duties
clearly relate directly to the management
Id. § 541.202(b). The regulations note that
employees “can exercise discretion and
7
and general business operations of the
Village. 8
Treasurer. (Def.’s 56.1 ¶ 21.) Drafting the
Village budget constitutes a “major
assignment” in the operations of the Village,
and demonstrates “authority to commit the
employer in matters that have significant
financial
impact.”
See
29
C.F.R.
§ 541.202(b).
Moreover,
plaintiff’s
responsibility over the budget-drafting
process demonstrates that the plaintiff had
“authority to formulate, affect, interpret, or
implement
management
policies
or
operating practices,” since determining how
to allocate Village resources may
substantially impact policies and operating
practices. See id. Additionally, this duty
indicates plaintiff’s involvement in the
Village’s long- and short-term business
objectives. See id. Thus, this undisputed
primary duty, based upon the facts of this
case, makes her exempt from the FLSA’s
overtime
requirement
under
the
administrative exemption of Section
213(a)(1).
Plaintiff’s duties also satisfy the second
prong of the primary duties test – whether
she had “discretion and independent
judgment” in her role as Village Treasurer.
Plaintiff supervised the drafting of the
Village budget and reported directly to the
Commissioner of Finance, who was a
member of the Board of Trustees. (Def.’s
56.1 ¶ 20; Pl.’s 56.1 ¶ 20.) Plaintiff had the
assistance of department heads when she
drafted the budget. She was the department
head for the line of employees of the
8
Neither party has offered evidence as to the
percentage of time plaintiff allocated to each duty.
See 29 C.F.R. § 541.700(b) (“The amount of time
spent performing exempt work can be a useful guide
in determining whether exempt work is the primary
duty of an employee.”) However, even if plaintiff
spent a large percentage of her time performing
ministerial tasks such as data entry, it is clear that she
had primary responsibility over the budget-drafting
process and where to invest the Village’s excess
money. As discussed supra, these duties clearly relate
to the management or general business operations of
the Village, and are indicative of the discretion and
independent judgment plaintiff exercised. See Paul v.
UPMC Health Sys., No. 06-1565, 2009 U.S. Dist.
LEXIS 19277, at *28 (W.D. Pa. Mar. 10, 2009)
(employee qualified for administrative exemption
even though she offered no evidence about the
amount of time allocated to each duty because her
“responsibility to make key decisions with respect to
certain contracts” constituted a primary duty related
to business operations); Hills v. Western Paper Co.,
825 F. Supp. 936, 938-39 (D. Kan. 1993) (employee
qualified for administrative exemption even if she
spent more than one half of her time doing
bookkeeping and clerical work, because her primary
duties directly related to employer’s management
policies and general business operations, and she
exercised discretion and independent judgment).
Moreover, the regulations state: “Time alone . . . is
not the sole test, and nothing in this section requires
that exempt employees spend more than 50 percent
of their time performing exempt work. Employees
who do not spend more than 50 percent of their time
performing exempt duties may nonetheless meet the
primary duty requirement if the other factors support
such a conclusion.” 29 C.F.R. § 541.700(b).
This Court’s holding on this issue is
consistent with prior decisions in this Court
and other courts under analogous
circumstances. For example, in Alberti v.
County of Nassau, 393 F. Supp. 2d 151, 174
(E.D.N.Y. 2005), this Court held that
Califano, the Nassau County Manager of
Budget Analysis, and Nigra, the Budget
Examiner for Nassau County were exempt
from the FLSA’s overtime requirements
under the administrative exemption. Id. at
158-59. The Court explained:
Califano’s
responsibility
for
reviewing the reasonableness of
various
proposed
expenditures,
directly related to the management
policies
or
general
business
operations of Nassau County, and
clearly demanded the exercise of
discretion and judgment. Nigra
prepared
spending
projections,
analyzed
expenditures,
and
8
nevertheless had to exercise her own
judgment in accomplishing that task.
In overseeing the billing of contracts,
plaintiff had to prepare budgets. [The
central office] would ask plaintiff to
propose “cuts” in the budgets to save
money; plaintiff had the discretion to
determine which cuts to propose, and
plaintiff sent those budgets to the
[financial] office for review. Plaintiff
does not dispute that she had the
discretion to approve or disapprove
purchases and expenditures within
contractual and budgetary guidelines,
even when [the central office] and
her direct supervisor suggested
otherwise.
Such
responsibility
demonstrates that the duties of
plaintiff’s position affected a
segment of defendant’s business
operations to a substantial degree,
and that she investigated and
resolved matters of significance on
behalf of her manager . . . . Such
responsibility also demonstrates that
plaintiff’s
position
exercised
authority to commit the employer in
matters that have significant
financial impact. Her decisions not
being final and having to be
reviewed by superiors . . . do not
render her without discretion or
independent judgment.
controlled spending by approving or
disapproving purchases, all based on
his knowledge of the resources and
activities of each County department;
these
tasks
were
likewise
administrative and likewise required
the exercise of independent judgment
and discretion.
Id. at 174. Plaintiff’s responsibilities
concerning the Village budget were similar
in nature to the responsibilities at issue in
Alberti. In drafting the budget, plaintiff
necessarily evaluated the reasonableness of
proposed
expenditures,
an
exercise
demanding discretion and judgment.
Although plaintiff’s duties did not include
approving or disapproving purchases, she
nonetheless used discretion and judgment in
consulting with other department heads to
draft the budget and determine how much
money to allocate to each department.
Similarly, in Paul v. UPMC Health
System, No. 06-1565, 2009 U.S. Dist.
LEXIS 19277, at *34-35 (W.D. Pa. Mar. 10,
2009), the court held that plaintiff, a
manager of grants, funding, and budgets at a
mental health service provider, was exempt
from FLSA overtime pay requirements
under the administrative exemption. In
analyzing the plaintiff’s primary duties, the
court explained:
Id. at *33-34. In the instant action, although
neither party alleges that plaintiff oversaw
contract billing, her duties with respect to
the Village budget-drafting process,
discussed supra, were similar, and
demonstrative of plaintiff’s discretion and
independent judgment, particularly when
considered in conjunction with plaintiff’s
other duties. 9
The totality of the evidence in this
case, even when viewed in plaintiff’s
favor, demonstrates that plaintiff
exercised independent discretion.
Although plaintiff attempts to
portray herself as a clerical
employee, the undisputed evidence
of record establishes that her
position’s duties required analysis
and decision making. . . . Plaintiff’s
position may have largely involved
the entry of data, but she
9
In his brief and at oral argument, plaintiff’s counsel
was unable to point to any case in any federal
9
In particular, in addition to her
supervision of the drafting of the Village
budget, plaintiff had numerous other duties
and authorities, which are uncontroverted,
and provide further support for the
application of the administrative exemption
under Section 213(a)(1). For example,
plaintiff had the authority to decide where to
invest the Village’s excess money. She used
her judgment to make the decision and get
the best interest rate for the Village. 10
(Def.’s 56.1 ¶ 23.) This duty constitutes a
“major assignment[] in conducting the
operations of the business,” as well as an
indication of plaintiff’s “authority to commit
the employer in matters that have significant
financial
impact.”
See
29
C.F.R.
§ 541.202(b).
¶¶ 11, 12, 29, 39, 57.) These duties provide
another indication of plaintiff’s authority to
commit the Village to matters of significant
financial impact.
In sum, even construing the evidence in
the light most favorable to plaintiff, the
uncontroverted facts demonstrate, for the
reasons set forth above, that plaintiff was
exempt from the overtime requirements of
the FLSA because she was an administrative
employee under 29 U.S.C. § 213(a)(1). It is
uncontroverted that, as the Village
Treasurer, she had, inter alia, (1)
responsibility for drafting the Village’s
budget, (2) the authority to open bank
accounts and act as sole check signatory for
checks under $5,000, and (3) supervisory
authority over the work of the person in
charge of accounts payable and the person in
charge of payroll. 11 It is also uncontroverted
that plaintiff had the power to decide where
to invest the Village’s excess money.
These undisputed facts demonstrate, as a
matter of law, that her primary duties were
“the performance of office or non-manual
work directly related to the management or
general business operations” of the Village,
and “include[d] the exercise of discretion
and independent judgment with respect to
matters of significance.” 29 C.F.R.
§ 541.200(a)(2)-(3). There are no genuine
disputed issues of material fact on this claim
that
preclude
summary
judgment. 12
Plaintiff’s duties also included opening
bank accounts and signing checks. She was
the only person other than the Mayor who
was authorized to open banking accounts.
(Def.’s 56.1 ¶ 18; Pl.’s 56.1 ¶ 18.) She was
one of only four people in the Village
authorized to sign checks. The other three
were the Village Clerk, the Deputy Village
Clerk, and the Deputy Treasurer. (Def.’s
56.1 ¶ 17; Pl.’s 56.1 ¶ 17.) When plaintiff
was Treasurer, the Village policy was that
she could sign Village checks if they were
for less than $5,000, without requiring a
second signature. (Def.’s 56.1 ¶ 28.) She
exercised this authority regularly, drafting
several Village general fund checks payable
to herself and signed only by herself for
amounts less than $5,000 during the period
of October 31, 2007 through February 11,
2009, totaling $115,906.77. (Def.’s 56.1
11
Plaintiff’s counsel conceded at oral argument that
plaintiff was “prominently involved” in the drafting
of the Village Budget, with the Village Mayor.
Counsel also acknowledged that these other duties
were undisputed.
12
Although certain aspects of plaintiff’s other duties
and responsibilities are disputed, these factual
disputes do not preclude summary judgment in
defendant’s favor on this issue because, even if these
factual disputes were resolved in plaintiff’s favor, she
would still be subject to the administrative
exemption, as a matter of law, given the
uncontroverted duties and responsibilities discussed
above. No rational trier of fact could find otherwise.
jurisdiction that had concluded that this exemption to
the FLSA overtime requirement did not apply to a
treasurer or someone with analogous duties and
responsibilities.
10
Additionally, it is undisputed that plaintiff
supervised and reviewed the work of the person in
charge of accounts payable and the person in charge
of payroll. (Def.’s 56.1 ¶ 14.)
10
Accordingly, the Court grants defendant’s
motion for summary judgment on the FLSA
claim.
C.
subject matter jurisdiction over appellants’
federal claims. It would thus be clearly
inappropriate for the district court to retain
jurisdiction over the state law claims when
there is no basis for supplemental
jurisdiction.”); Karmel v. Claiborne, Inc.,
No. 99 Civ. 3608 (WK), 2002 WL 1561126,
at *4 (S.D.N.Y. July 15, 2002) (“Where a
court is reluctant to exercise supplemental
jurisdiction because of one of the reasons
put forth by § 1367(c), or when the interests
of judicial economy, convenience, comity
and fairness to litigants are not violated by
refusing to entertain matters of state law, it
should decline supplemental jurisdiction and
allow the plaintiff to decide whether or not
to pursue the matter in state court.”).
Although the parties urged the Court at oral
argument to exercise such jurisdiction for
purposes of efficiency and judicial economy,
the Court in its discretion concludes that
such interests are not sufficient in this case
to
warrant
exercising
supplemental
jurisdiction over the state law claims.
Accordingly, pursuant to 28 U.S.C.
§ 1367(c)(3), the Court declines to retain
jurisdiction over the remaining state law
claims given the absence of any federal
claim that survives the summary judgment
motion and dismisses any such claims
without prejudice.
State Law Claims
Having granted summary judgment to
defendant on plaintiff’s federal claim under
the FLSA, the only remaining claims are the
plaintiff’s state law claim of wrongful
termination
and
the
defendant’s
counterclaims for conversion and breach of
fiduciary
duty. 13
However,
having
determined that plaintiff’s federal claim
against the defendant does not survive the
defendant’s motion for summary judgment,
the Court concludes that retaining
jurisdiction over any of the remaining state
law claims is unwarranted. 28 U.S.C.
§ 1367(c)(3); United Mine Workers of Am.
v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130,
16 L.Ed.2d 218 (1966). “In the interest of
comity, the Second Circuit instructs that
‘absent exceptional circumstances,’ where
federal claims can be disposed of pursuant
to Rule 12(b)(6) or summary judgment
grounds, courts should ‘abstain from
exercising pendent jurisdiction.’” Birch v.
Pioneer Credit Recovery, Inc., No. 06-CV6497T, 2007 WL 1703914, at *5 (W.D.N.Y.
June 8, 2007) (quoting Walker v. Time Life
Films, Inc., 784 F.2d 44, 53 (2d Cir. 1986)).
Therefore, in the instant case, the Court, in
its discretion, “‘decline[s] to exercise
supplemental jurisdiction’” over plaintiff’s
state law claim because “it ‘has dismissed
all claims over which it has original
jurisdiction.’” Kolari v. N.Y.-Presbyterian
Hosp., 455 F.3d 118, 122 (2d Cir. 2006)
(quoting 28 U.S.C. § 1367(c)(3)); see also
Cave v. E. Meadow Union Free Sch. Dist.,
514 F.3d 240, 250 (2d Cir. 2008) (“We have
already found that the district court lacks
13
As noted supra, at oral argument on February 6,
2012, plaintiff voluntarily dismissed her due process
claim pursuant to 42 U.S.C. § 1983.
11
IV. CONCLUSION
For the foregoing reasons, the Court
grants defendant’s motion for summary
judgment on the FLSA claim and declines to
exercise supplemental jurisdiction over the
remaining state law claims. Thus, given that
the Court has declined to exercise
supplemental jurisdiction over the state law
claims, the cross-motions for summary
judgment on the state law claims are moot.
The Clerk of the Court shall enter judgment
accordingly and close the case.
SO ORDERED.
______________________
JOSEPH F. BIANCO
United States District Judge
Dated: July 10, 2012
Central Islip, NY
***
Plaintiff is represented by Lane T. Maxson
and William P. Caffrey, Jr., Hamburger,
Maxson, Yaffe, Knauer & McNally, LLP,
225 Broadhollow Road, Suite 301E,
Melville, NY 11747. Defendant is
represented by Carl S. Sandel, Morris Duffy
Alonso & Faley, Two Rector Street
New York, NY 10006.
12
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