An Employer Win: Supreme Court Maintains Lower Proof Standard for FLSA Overtime Exemptions
An Employer Win: Supreme Court Maintains Lower Proof Standard for FLSA Overtime Exemptions
AJ Carter, Associate
On January 15, 2025, in E.M.D. Sales, Inc. v. Carrera,[1] Justice Kavanaugh issued the Supreme Court’s unanimous opinion rejecting arguments in favor of a heightened “clear and convincing evidence” standard for proving exceptions to overtime requirements under the Fair Labor Standards Act (“FLSA”) The question presented to the Court was whether this higher standard should apply to overtime exemption classification disputes instead of the default “preponderance of the evidence” standard. The Court concluded that even though the FLSA aims to protect workers and ensure fair wages, such public policy considerations had no bearing on the applicable standard of proof.
E.M.D. Sales, Inc. v. Carrera - Background and Procedural Posture
EMD is a food distributor servicing the Washington D.C. metropolitan area. Several EMD sales representatives filed a lawsuit against the company in the U.S. District Court for the District of Maryland, claiming that EMD violated the FLSA by failing to pay them overtime. While EMD did not dispute that the employees worked more than 40 hours per week without overtime pay, it argued that they were exempt as outside salesmen under the Act. After a bench trial, the District Court ruled that EMD had not proven “by clear and convincing evidence” that the employees qualified for the exemption, noting that the employees mainly carried out tasks related to sales already made, rather than generating new sales.
On appeal, EMD argued that the District Court should have applied the less stringent “preponderance of the evidence” standard. The U.S. Court of Appeals for the Fourth Circuit upheld the District Court’s ruling, affirming the requirement for employers to prove FLSA exemptions by clear and convincing evidence, as established by Circuit precedent. Although the panel suggested the full court might reconsider this precedent, it later denied en banc review. The Fourth Circuit is the only federal circuit which applied the clear and convincing evidence standard to overtime exemptions, with all other circuits (including the Tenth Circuit) applying the preponderance of the evidence standard.
Deviations from the “Preponderance of Evidence Standard” in Civil Litigation
In civil litigation, the Supreme Court has deviated from the preponderance standard under three primary circumstances. First, a heightened standard of proof is required when a statute explicitly establishes one. Second, courts must apply a heightened standard when the Constitution necessitates it. For example, the Court has required clear and convincing evidence in specific First Amendment cases and has also mandated a higher standard under the Due Process Clause in certain instances. Third, a heightened standard may be appropriate in “uncommon” cases, typically when the government seeks to take unusually coercive action against an individual, such as revoking citizenship. However, the Court has not applied a heightened standard in most civil matters, including Title VII employment discrimination cases, where the preponderance standard remains the rule.
The Court’s Opinion
The Court concluded that the default preponderance standard applies when an employer seeks to prove that an employee is exempt under the Fair Labor Standards Act (FLSA). First, the FLSA does not specify a standard of proof for its exemptions, and in the absence of such guidance, courts typically apply the default preponderance standard. Statutory silence is generally inconsistent with the notion that Congress intended to impose a heightened standard of proof. Second, the Court found that the case did not involve any constitutional rights that would warrant a heightened standard. Third, the Court found that the case did not present a situation in which the government sought “unusual coercive action” against an individual. The Court reasoned that FLSA cases are more similar to Title VII cases, where the Court has applied the preponderance standard. Since clear and convincing evidence is not required in Title VII cases, the Court could not justify why it would be necessary in FLSA cases, notwithstanding the public policy goals of the FLSA to protect workers’ rights to wages.
Employer Considerations
The E.M.D. Sales decision resolves any ambiguity as to whether the “clear and convincing evidence” standard applies to disputes over exemptions to the FLSA’s overtime requirements, and the Court has conclusively determined that it does not. Nonetheless, employers should maintain clear and thorough documentation to support any overtime exemption classifications under either federal or Colorado law and should be mindful of key differences between the FLSA and Colorado law when classifying employees as exempt.[2] Campbell Litigation remains available to assist with wage and hour questions under both bodies of law.
[1]Case No. 23-217. See https://www.supremecourt.gov/opinions/24pdf/23-217_9o6b.pdf for a copy of Justice Kavanaugh’s opinion.
[2] See https://www.rockymountainemployersblog.com/blog/2024/12/12/us-district-court-vacates-the-dols-july-1-2024-increases-to-the-salary-thresholds-for-overtime-exemptions-under-the-flsa-which-is-now-pending-appeal (discussing differences between required salary thresholds for overtime exemptions under the FLSA and Colorado law).