In the
United States Court of Appeals
For the Seventh Circuit
No. 10-3009
P ENNY V ERKUILEN,
Plaintiff-Appellant,
v.
M EDIAB ANK, LLC, et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 09 C 3527—John F. Grady, Judge.
A RGUED JANUARY 11, 2011—D ECIDED M AY 27, 2011
Before E ASTERBROOK, Chief Judge, and C UDAHY and
P OSNER, Circuit Judges.
P OSNER, Circuit Judge. The Fair Labor Standards Act,
29 U.S.C. §§ 201 et seq., establishes a federal minimum
wage and also—critical to this case—requires employers
to pay their employees 150 percent of their hourly wage
for hours worked above 40 a week. § 207(a)(1). But the
Act denies this entitlement to “any employee em-
ployed in a bona fide executive, administrative, or pro-
fessional capacity.” § 213(a)(1) (emphasis added).
2 No. 10-3009
The plaintiff was an account manager for a company
(the defendant, MediaBank) that provides computer
software to advertising agencies; she acted as a bridge
between the software developers and the customers,
helping to determine the customers’ needs, then
relaying those needs to the developers and so assisting
in the customization of the software, and finally helping
the customers use the customized software. The district
court rejected her overtime claim on summary judgment.
The claim relies heavily on the Department of Labor’s
regulation—29 C.F.R. Part 541—that seeks to explain
“administrative capacity.” The term is not self-defining.
The regulation provides that to be deemed to be
employed in an administrative capacity the employee
must be paid more than $455 a week, § 541.200(a)(1)
(a requirement our plaintiff is conceded to satisfy) and
his “primary duty” must be both “the exercise of discre-
tion and independent judgment with respect to matters of
significance,” § 541.200(a)(3), and “the performance of
office or non-manual work directly related to the manage-
ment or general business operations of the employer or
the employer’s customers.” § 541.200(a)(2). The regula-
tion instances, as employees whose work may be
directly related to a customer’s business, ones “acting as
advisers or consultants to their employer’s clients or
customers.” § 541.201(c); see, e.g., Roe-Midgett v. CC
Services, Inc., 512 F.3d 865, 871-72 (7th Cir. 2008).
The regulation’s “primary duty” provisions, which we
just quoted, are pretty vague, as is the further provision
that “to meet [the] requirement [that the employee’s
No. 10-3009 3
primary duty be directly related to management or
general business operations], an 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.”
§ 541.201(a). Notice the gap: employees who don’t per-
form work directly related to assisting with the running
or servicing of the employer’s or its customers’ business
are not necessarily employees who “for example” work
on an assembly line or work in a retail store as a sales-
person.
Yet one sees what the regulation is getting at: a legal
requirement to pay a worker a fixed percentage increase
in his hourly wage if he works more than 40 hours
a week doesn’t fit a worker who spends much of his
work time off the employer’s premises, where he can’t
be supervised and so if entitled to overtime would be
tempted to inflate his hours. See 29 C.F.R. § 541.202(c);
Piscione v. Ernst & Young, 171 F.3d 527, 541, 545-46 (7th
Cir. 1999); Robinson-Smith v. Johnson & Johnson, 593 F.3d
280, 282-83, 285 (3d Cir. 2010); Smith v. Government Em-
ployees Ins. Co., 590 F.3d 886, 894-95 (D.C. Cir. 2010);
Darveau v. Detecon, Inc., 515 F.3d 334, 338-39 (4th Cir.
2008); Staunch v. Continental Airlines, Inc., 511 F.3d 625, 630-
31 (6th Cir. 2008); Rutlin v. Prime Succession, Inc., 220
F.3d 737, 742-43 (6th Cir. 2000). This is particularly true
if, as the regulation also requires, the work involves
the exercise of independent judgment relating to man-
agement or general business operations, see, e.g.,
Kennedy v. Commonwealth Edison Co., 410 F.3d 365, 375
4 No. 10-3009
(7th Cir. 2005), especially the business operations of a
customer. An employer will be hard pressed to deter-
mine how many hours an employee should need
to complete a particular job much of which is performed
on the premises of a different company. Employees
tasked with jobs requiring the exercise of independent
judgment usually are expected to work with a minimum
of supervision even when they are working in their
office rather than on a customer’s premises. See Roe-
Midgett v. CC Services, Inc., supra, 512 F.3d at 868.
It might seem that in any event a requirement of addi-
tional compensation for overtime couldn’t sensibly be
applied to workers, such as the plaintiff in this case, whose
hours of work vary from week to week, regardless of the
nature of their work or where it is performed—a worker
who worked 20 hours in one week and 60 in the next
would have to be paid more than one who worked
40 hours both weeks. But the statute and regulation
offer solutions for the “fluctuating hours” problem. See
29 U.S.C. § 207(f); 29 C.F.R. §§ 778.114, .404, .405; Walling
v. A.H. Belo Corp., 316 U.S. 624, 627, 630-35 (1942); Condo
v. Sysco Corp., 1 F.3d 599, 601-03 (7th Cir. 1993). So it
does not figure in our analysis.
Still it is apparent that our plaintiff is a picture-
perfect example of a worker for whom the Act’s over-
time provision is not intended. MediaBank, the em-
ployer, is in what is called the “media buying” business.
See “Media Buying,” Wikipedia, en.wikipedia.org/
w i k i / M e d i a _ b u y i n g ; M e d ia B a n k , “ O | X S u i t e , ”
www.mbxg.com/ox-suite.php; MediaBank, “C|D Suite
No. 10-3009 5
(formerly A|X),” www.mbxg.com/products.php?p=axsuite;
Joe Mandese, “MediaBank Launches ‘DSP’ for Analog
Media: Ushers in ‘Audience-Buying’ for Print, Out-of-
Home, Etc.,” Media Daily News, Aug. 20, 2010, www.
mediapost.com/publications/?fa=Articles.showArticle&
art_aid=134152 (all visited May 4, 2011). It produces
software programs that help advertising agencies place
advertising in the media. The software is complex; “adver-
tising today deals with an endless number of touch-
points that interconnect in ways we couldn’t imagine
as recently as five years ago. Those changes create enor-
mous challenges in terms of managing data and
workflow: if I’m a media buyer, I suddenly need to
sync mobile buys with outdoor ads, and search inventory
with TV spots. If I’m a vendor, I’m working under ever-
greater pressure to generate greater revenue from
ads—while buyers are pulled in endless directions
toward multiple channels, and potentially away from
my inventory.” “New CEO Bill Wise Says MediaBank Aims
to Give Media Ecosystem Control Over Media Buying,
Data Management,” July 14, 2010, www.adexchanger.com/
ad-exchange-news/mediabank (visited May 4, 2011).
Searching the Web for media outlets for advertisers,
negotiating with media companies, and evaluating the
effectiveness of media advertising purchases in
promoting a seller’s products or services—all these tasks
are integrated in the software that MediaBank sells ad-
vertising agencies to give agency staff access to the full
range of the agency’s activities on its computer screens.
The software is complex because it integrates so many
functions, and it must be customized to the needs of
6 No. 10-3009
each client, which vary. The complexity and variance
are where the account manager comes in. The manager
of a customer’s account has to learn about the customer’s
business and help MediaBank’s software engineers de-
termine how its software can be adapted to the cus-
tomer’s needs.
The account manager is not a salesman for Best Buy or
a technician sitting at a phone bank fielding random
calls from her employer’s customers—instead she’s on
the customer’s speed dial during the testing and opera-
tion of the customer’s MediaBank software. As the inter-
mediary between employees of advertising agencies
struggling to master complex software and the software
developers at MediaBank, she has to spend much of
her time on customers’ premises training staff in the use
of the software, answering questions when she can and
when she can’t taking them back to MediaBank’s soft-
ware developers, and then explaining their answers
to the customer and showing the customer how to imple-
ment the answers in its MediaBank software. Identifying
customers’ needs, translating them into specifications
to be implemented by the developers, assisting the cus-
tomers in implementing the solutions—in the words of
MediaBank’s chief operating officer, account managers
are expected to “go out, understand [the customers’
requirements], build specifications, understand the com-
petency level of our customers. Then they will build
functional and technical specifications and turn it over
to . . . developers who will then build the soft-
ware, . . . checking in with the account manager, making
No. 10-3009 7
sure what they are building is ultimately what the cus-
tomer wanted.”
Thus the plaintiff’s primary duty was directly related
to the general business operations both of her employer
and (as in a consulting role) of the employer’s customers.
It is true that the regulation, only a few provisions of
which we have quoted (it goes on and on), lists a number
of “administrative” functions that the plaintiff did not
perform, such as negotiating contracts with MediaBank’s
customers. But below the highest executive level a
modern business is a congeries of specialists. The
plaintiff could not have performed her job as the inter-
mediary between developers and customers had she
also been negotiating contracts.
A FFIRMED.
5-27-11