In the

United States Court of Appeals

For the Seventh Circuit

No. 09-1902

TAMMY SCHMIDT,

Plaintiff-Appellant,

v.

EAGLE WASTE & RECYCLING, INC.,

Defendant-Appellee.

Appeal from the United States District Court

for the Western District of Wisconsin.

No. 3:08-cv-00230-bbc—Barbara B. Crabb, Chief Judge.

ARGUED DECEMBER 2, 2009—DECIDED MARCH 22, 2010

Before POSNER, FLAUM, and SYKES, Circuit Judges.

FLAUM, Circuit Judge. The plaintiff, Tammy Schmidt,

brought this action for monetary relief under the Fair

Labor Standards Act (“FLSA”), alleging that she was not

paid overtime due under the Act. The defendant, Eagle

Waste and Recycling, Inc. (“Eagle”), moved for summary judgment, arguing that Schmidt was exempt from

the act because she was either an “outside salesperson” or

a combination of an “outside salesperson” and an “admin-
2 No. 09-1902

1 This summary of the undisputed facts comes mainly from

the district court’s opinion, which is in turn largely based on

Eagle’s proposed findings of undisputed fact. We address

Schmidt’s argument that this summary unfairly deems those

findings admitted in Part II of this opinion.

istrative employee.” Taking Eagle’s proposed findings

of fact as true because Schmidt failed to contest them in

the manner prescribed by the local rules, the district

court granted summary judgment for the defendant.

Schmidt appeals, arguing that the district court erroneously denied her an opportunity to cure the defects in her

response brief, failed to “liberally construe” the FLSA, and

incorrectly applied the “outside salesperson” and “combination” exemptions to the FLSA. We affirm.

I. Background1

Eagle, a corporation located in Eagle River, Wisconsin,

is in the business of waste removal from residential and

commercial properties. Alan Albee is the president of

Eagle and has been since its founding on July 1, 2005.

Albee hired Schmidt on September 12, 2005. According

to Eagle, Schmidt was hired as a sales representative

and adopted the title of “account representative” with

Albee’s permission. Schmidt reported to Albee, her

sole supervisor.

Schmidt’s duties included contacting potential commercial customers at their places of business and convincing

them to use Eagle’s waste disposal and recycling services.

She was responsible for bringing in new customers, and
No. 09-1902 3

maintaining and increasing the business of existing

customers. Schmidt spent some time in the office on

approximately half of her workdays. On those days,

she was in the office between one and four hours.

Schmidt spent four to eight hours a day outside the

office making sales calls to current and potential customers. Schmidt would schedule in-person sales calls in

the mornings and afternoons so that she could meet

with these customers on the way to and from the office.

She controlled the amount of time she spent on these

calls. She was also authorized to negotiate prices with

customers. For her efforts, she was paid a commission

on sales in addition to her base salary.

Schmidt also had promotional and marketing duties. She

conferred frequently with Albee to determine new locations and businesses to target. Schmidt would then

develop a marketing campaign that Albee would review.

Schmidt spent time in and out of the office promoting

Eagle. For example, she attended weekly chamber of

commerce meetings and social functions, where she

distributed business cards and flyers, talked to area

business people, and sold services Eagle offered. Schmidt

spent approximately five or six hours a week promoting

Eagle outside the office, including two to four hours a

week at chamber of commerce meetings. She spent

another ten hours a week working on promotional and

marketing efforts at the office.

Finally, Schmidt was responsible for customer service

and maintaining the customer database. She made inperson visits to resolve any service problems her cus-
4 No. 09-1902

tomers had, ranging from confusion with neighbors’

containers to billing and accounting. Her database

tracked current customers, prospects, and lost customers.

She used the database to collect money owed by her

customers, sometimes adjusting bills if a customer had

a complaint or concern. These collections formed the

basis of her commission payments.

Occasionally, other employees consulted Schmidt when

Albee was out of the office. For example, if a customer

complained about service, Schmidt would decide

whether to give the customer a credit on the next bill. If

a vehicle needed to be repaired, Schmidt would sometimes authorize the ordering of replacement parts without consulting Albee.

When she was hired in September 2005, Schmidt’s

base salary was $384.62 a week plus commission. Beginning January 1, 2006, she received a base salary of $461.54

a week plus commission. She received $26,319.75 in

commissions during her time as an employee of Eagle,

which ended on December 31, 2007.

Schmidt brought this action in state court on April 4,

2008. Eagle removed the case to federal court and answered the complaint on April 23, 2008. On May 15, 2008,

Magistrate Judge Stephen Crocker held a pretrial conference in which he set deadlines for discovery and a trial

date. Notice of these deadlines was sent to both parties

along with a copy of the procedures for briefing summary judgment motions. Following depositions of

Schmidt and Albee, Eagle filed its motion for summary

judgment on November 13, 2008. Schmidt filed her brief
No. 09-1902 5

in opposition to Eagle’s motion on December 4, 2008,

before the deadline of December 15, 2008. That same day,

she filed a sworn affidavit making various statements

in support of her response. Eagle filed its reply on December 12, 2008, raising Schmidt’s failure to respond to its

proposed findings of fact in accordance with the local

rule and asking that Schmidt’s affidavit be stricken

because it contradicted her deposition testimony. On

December 26, 2008, Schmidt filed a motion for leave to

file a sur-reply brief and to modify her responses to

Eagle’s proposed findings of fact. The brief and proposed

findings of fact she sought to file were not included

with the motion.

On February 25, 2009, the district court entered an

order denying Schmidt’s motion for leave to file a surreply brief and correct her proposed findings of facts. The

same order granted summary judgment to Eagle.

Schmidt now appeals.

II. Analysis

At the outset, we must address Schmidt’s argument

that the district court erred when it deemed Eagle’s

proposed findings of fact admitted and refused to

consider additional facts alleged by Schmidt. The district

court did so because Schmidt failed to follow the local

rule for making and opposing proposed findings of fact

for summary judgment, which required her to respond

to the defendant’s proposed findings paragraph by paragraph and put her own proposed findings into separate

numbered paragraphs. Instead, Schmidt included only a
6 No. 09-1902

“statement of facts” of the sort that might be found in an

appellate brief. While this statement of facts did contain

some pinpoint citations, it did not directly respond to

Eagle’s proposed findings and lumped several distinct

factual assertions together in each paragraph.

We have routinely held that a district court may

strictly enforce compliance with its local rules regarding

summary judgment motions. See, e.g., Patterson v. Indiana

Newspapers Inc., 589 F.3d 357, 360 (7th Cir. 2009). Indeed,

we have previously upheld a district court’s decision

to enforce compliance with the precise local rule at issue

here. See Hedrich v. Bd. of Regents of Univ. of Wis. Sys., 274

F.3d 1174, 1177 (7th Cir. 2001). In Hedrich, as here, the

nonmoving party did include some citations to the

record but failed to follow the requirement that specific

factual allegations be made or contested in numbered

paragraphs. Id. at 1178. Similarly, as in Hedrich, a

separate reminder of the local rule accompanied notices

sent to the parties. Id. Schmidt’s reliance on a pair of

Supreme Court cases addressing pleading standards,

Swierkiewicz v. Sorema N.A., 543 U.S. 506 (2002) and Conley

v. Gibson, 355 U.S. 41 (1957), is misplaced. Not only has

Conley been abrogated by Bell Atlantic v. Twombly, 550

U.S. 554, 560-63 (2007), but the issue of notice pleading is

fundamentally different from compliance with the local

rule at issue here. The local rule serves an important

function by ensuring that the proposed findings of fact

are in a form that permits the district court to analyze

the admissible evidence supporting particular factual

propositions and determine precisely what facts, if any,

are material and disputed. See Hedrich, 274 F.3d at 1178.
No. 09-1902 7

2

Schmidt also sought leave to file a sur-reply on the “sham

affidavit rule,” which Eagle had raised in its reply brief to

attack an affidavit filed by Schmidt along with her response

brief. The district court denied Schmidt leave to file a sur-reply

and instead decided the summary judgment motion without

reference to Eagle’s sham affidavit rule argument. Because

this was the only new argument raised in Eagle’s reply brief

and the district court did not rely on it, the district court did not

abuse its discretion when it denied Schmidt’s request for

leave to file a sur-reply.

This is not a hyper-technical rule that turns “pleading

[into] a game of skill in which one misstep by counsel

may be decisive of the outcome,” Conley, 355 U.S. at 48.

Rather, the rule provides district courts with the means

to resolve motions for summary judgment on the merits.

Here, even after Schmidt was informed of the deficiencies

in her response brief, she waited two weeks before

asking for leave to correct her proposed findings of fact

and did not tender a corrected version with her motion.

The district court concluded that Schmidt had not given

an adequate explanation for her disregard of the local

rules or her delay in attempting to cure the error. Schmidt

has not explained why those findings were erroneous.

Consequently, the district court did not abuse its discretion when it denied Schmidt the opportunity to amend

her response brief and proposed findings of fact. We 2

therefore proceed, as the district court did, on the

findings of fact proposed by Eagle.

Next, we address Schmidt’s argument that she was not

an “outside salesperson” as defined in the FLSA regula-
8 No. 09-1902

tions. The Secretary of Labor defines an “outside salesperson” as an employee (1) whose “primary duty” consists

of “making sales” or “obtaining orders or contracts for

services” and (2) who is “customarily and regularly

engaged away from the employer’s place or places of

business in performing such primary duty.” 29 C.F.R.

§ 541.500 (2009). An employee’s “primary duty” is the

“principal, main, major, or most important duty that the

employee performs.” Id. § 541.700. Time spent performing exempt work is useful, but not dispositive,

in determining an employee’s primary duty. Id. The

burden is on the employer to prove that an employee

is exempt under FLSA, see Piscione v. Ernst & Young LLP,

171 F.3d 527, 533 (7th Cir. 1999), and such exemptions

are to be narrowly construed against the employer

seeking the exemption. See Yi v. Sterling Collision Centers,

Inc., 480 F.3d 505 (7th Cir. 2007).

While Schmidt argues that the district court failed to

“liberally construe” FLSA in her favor, the district court

identified the correct legal standard and applied it to the

facts before the court. The undisputed facts show that

Schmidt’s primary duty was outside sales. On average,

Schmidt spent four to eight hours a day outside the

office making in-person sales calls. She visited the office

on only about half of her workdays. At the office, much

of her work furthered her efforts to make sales. She

maintained a database of her customers, which formed

the basis of her collections and commission payments.

This sort of work relates directly to her outside sales

work and is thus exempt itself. See 29 C.F.R. § 541.703
No. 09-1902 9

(2009). She also spent about ten hours a week developing

marketing plans and doing other promotional work

inside the office, and five to six hours a week promoting

Eagle outside of the office. Other than Albee, Eagle’s

president, who made some sales directly, there do not

appear to have been any other Eagle employees directly

involved in sales work. Most of the fruits of Schmidt’s

promotional work were therefore realized through her

own sales. Thus, this promotional work also counts as

exempt outside sales work. See id. § 541.503(a) (promotional work is exempt if it is “incidental to and in conjunction with an employee’s own outside sales or solicitations” but non-exempt if it “is incidental to sales

made, or to be made, by someone else”).

We also agree with the district court that even if

Schmidt did not qualify for the outside salesperson exemption on its own, she would fall within the “combination exemption” to the FLSA. Employees “who perform

a combination of exempt duties as set forth in the regulations in this part for . . . administrative [and] outside

sales . . . employees may qualify for exemption.” 29 C.F.R.

§ 541.708 (2009). Eagle argues that to the extent Schmidt

performed duties unrelated to outside sales, these were

largely exempt “administrative” duties. See id. § 541.200.

Before we proceed to the merits of Eagle’s argument,

however, we must address Schmidt’s claim that Eagle

has waived any reliance on the combination exemption.

Schmidt argues that the combination exemption is an

affirmative defense that should have been raised in
10 No. 09-1902

Eagle did not raise the outside salesperson defense in its 3

answer, either. Schmidt, however, does not argue that Eagle

has waived that defense.

Eagle’s answer. She also argues that, in response to a

3

request to admit, Eagle admitted that Schmidt was not

an administrative employee. Schmidt made these arguments, which she frames as an issue of “estoppel,” to the

district court on summary judgment, but the district

court did not mention waiver or estoppel in its opinion

granting summary judgment.

While Fed. R. Civ. P. 8(c) directs parties to raise affirmative defenses in the pleadings, a delay in raising

an affirmative defense only results in waiver if the other

party is prejudiced as a result. See Curtis v. Timberlake,

436 F.3d 709, 711 (7th Cir. 2005). Eagle did not raise

the administrative or combination exemptions explicitly

in its answer. It did, however, deny that Schmidt was a

covered employee under FLSA and deny that Schmidt

was a nonexempt employee. The nature of Schmidt’s

work was the primary focus of the depositions of Albee

and Schmidt. Schmidt argues that Eagle misled her by

denying in discovery that she was an “administrator” as

defined in the FLSA regulations. But the request to

admit was itself misleading—“administrator” is defined

only as the Administrator of the Wage and Hour Division. See 29 C.F.R. § 541.1 (2009). Although it seems unlikely that Eagle’s counsel thought Schmidt was

asking them to admit that she was the Administrator of

the Wage and Hour Division, rather than inartfully
No. 09-1902 11

asking if Eagle intended to invoke the administrative

exemption, Eagle’s response was literally true and the

confusion, if any, stems from Schmidt’s vague request

to admit. In any event, Eagle’s consistent position that

Schmidt was an exempt employee and the course of

discovery as a whole should have put Schmidt on notice

that the administrative and combination exemptions

were at issue. Eagle raised the combination and administrative exemptions in its opening brief on summary

judgment and Schmidt argued them on the merits in her

response brief. Because Schmidt has not shown any

prejudice from Eagle’s delay in raising the administrative

and combination exemptions to FLSA, the district court

did not abuse its discretion in reaching the merits.

Curtis, 436 F.3d at 711.

We agree with the district court that to the extent

Schmidt’s work was not related to outside sales, it was

primarily exempt administrative work. The administrative employee exemption applies to any employee who is:

(1) Compensated on a salary or fee basis at a rate

of not less than $455 per week . . .;

(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.

29 C.F.R. § 541.200 (2009). With the exception of her first

few months of employment, Schmidt’s base salary ex-
12 No. 09-1902

The record reflects only the total of Schmidt’s commission 4

payments. Spread over the course of her employment, she

received an average of $225 per week in commission. Thus, even

Schmidt’s lower weekly salary of $384 exceeded the $455

minimum when combined with her commission payments.

ceeded the $455 per week minimum. When Schmidt was 4

not actively pursuing sales, she developed advertising

and marketing plans, managed customer complaints,

administered the customer database, and dealt with

issues that would have been handled by Albee had he

been in the office, such as approving an order of parts

for broken machinery. This office work was directly

related to the management and general business operations of Eagle. See id. § 541.201 (“Work directly related

to management or general business operations includes,

but is not limited to, work in functional areas such as . . .

purchasing; procurement; advertising; marketing;

research; . . . personnel management; . . . public

relations; . . . database administration; . . . and similar

activities.”); see also Haywood v. North American Van Lines,

Inc., 121 F.3d 1066, 1067-68 (7th Cir. 1997) (finding customer service coordinator for shipping company to be

an exempt administrative employee). While Schmidt

argues that Albee “micromanaged” her work, the undisputed facts show that she negotiated with customers

over price and service credits, created marketing campaigns, placed advertisements, collected from accounts,

and set her own schedule. Cf. Haywood, 121 F.3d at

1072 (holding that resolving customer complaints and

disputes about billing requires the exercise of discretion
No. 09-1902 13

and independent judgment). Thus, the district court did

not err by holding that even if Schmidt’s primary duty

was not outside sales, the combination of her outside

sales and administrative work exempts her from the

FLSA’s overtime requirements.

III. Conclusion

We AFFIRM the district court’s grant of summary judgment to Eagle.

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