Schwartz v. City of New York

Background

Jacob Schwartz sued the City of New York, alleging that the City failed to pay him overtime under the Fair Labor Standards Act (FLSA) and Section 12-108 of the New York City Administrative Code. He also asserted claims for breach of an oral contract and quantum meruit, a theory seeking payment for the reasonable value of services provided.

The complaint alleged that Schwartz worked for the City’s Department of Design and Construction as a provisional employee from May 2015 through May 2017. He was assigned a 35-hour workweek. For work beyond 35 hours, he could choose hourly pay or bank the time as “Comp Time.” He could also bank holiday hours at 1.5 times his hourly rate. After his termination, his paycheck showed 457 hours and 10 minutes of Comp Time, 26 hours and 38 minutes of holiday work, and 21 hours and 16 minutes of unused annual leave. The opinion states that he was not paid for those hours.

Procedural History and Standard

The City moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which asks whether the complaint states a legally sufficient claim. The motion was referred to Magistrate Judge Stewart D. Aaron, who recommended granting the motion as to every claim except the FLSA claim. Schwartz objected to that recommendation.

Because Schwartz mostly repeated arguments previously made to Judge Aaron, Judge Torres reviewed those objections for clear error, meaning whether the recommendation left the court with a firm conviction that a mistake had been made. The court reviewed properly specific objections de novo, meaning independently and without deference, and reviewed the unchallenged portions for clear error.

Section 12-108 Claim

Schwartz argued that Section 12-108 supported overtime compensation because a Department of Design and Construction employee manual established a 35-hour workweek. The court rejected that argument. Section 12-108 applies when an employee works more than the maximum number of hours prescribed by a statute or other specified legal authority. The court held that an employee manual is not a statute and that Schwartz had not presented authority establishing otherwise. The court therefore overruled his objection to dismissal of the Section 12-108 claim.

Contract and Quantum Meruit Claims

Schwartz also challenged dismissal of his breach-of-contract and quantum-meruit claims for unpaid Comp Time. Judge Aaron concluded that, because Schwartz was a discharged public employee, he first needed a successful proceeding under Article 78 of the New York Civil Practice Law and Rules before pursuing damages. The opinion states that Article 78 proceedings have a four-month limitations period and that this period had expired by the time of the case.

Judge Torres rejected Schwartz’s argument that Article 78 was unnecessary because he was not seeking reinstatement or challenging his discharge. The court relied on Second Circuit authority stating that a discharged public employee must obtain reinstatement through an Article 78 proceeding before bringing a damages claim. The court also rejected Schwartz’s reliance on a case involving suspension rather than termination. Finally, the court overruled a new argument about when his claims accrued because he had not previously presented it to Judge Aaron and, in any event, the court said that any uncertainty about accrual did not eliminate the requirement of a prior Article 78 proceeding.

Disposition

Judge Torres adopted the Report and Recommendation in its entirety and dismissed counts two, three, and four of the complaint. The opinion identifies count two as the Section 12-108 claim and counts three and four as the oral-contract and quantum-meruit claims. The order does not dismiss the FLSA claim. It also granted the City’s request to extend the deadline for filing a pre-motion conference request concerning an anticipated summary-judgment motion until 14 days after the order, with the request due by June 17, 2020. The parties were ordered to appear for a case-management conference on June 24, 2020, and to submit a joint status report by June 17, 2020.