By: Emily Mahler, January 31, 2025
On January 15, 2025, in E.M.D. Sales, Inc. v. Carrera, the Supreme Court of the United States resolved a circuit split concerning the standard of proof an employer must satisfy to show that an employee is exempt from the minimum-wage and overtime-pay provisions of the Fair Labor Standards Act (“FLSA”). In a 9-0 decision, the Court held that the preponderance of the evidence standard applies.
Case Background
EMD is an international food products distributor in the Washington D.C. area. EMD employs sales representatives who are responsible for managing inventory and taking orders at grocery stores that stock EMD products. The relevant exemption at issue in this case concerned persons employed “in the capacity of outside salesman.” 29 U.S.C. §213(a)(1). An “outside salesman” primarily makes sales and regularly works away from the employer’s place of business. See Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 148, 132 S. Ct. 2156, 183 L. Ed. 2d 153 (2012); 29 CFR §541.500(a) (2023).
Several EMD sales representatives filed suit in the United States District Court for the District of Maryland, alleging that EMD violated the Fair Labor Standards Act (“FLSA”) by failing to pay them overtime. EMD conceded that the sales representatives worked more than 40 hours per week without receiving overtime pay, but contended that the representatives fell within the FLSA’s outside-salesman exemption. Following a bench trial, the district court concluded that EMD had failed to prove, by clear and convincing evidence, that the employees qualified as outside salesmen. It found that the sales representatives were primarily executing the terms of sales that had already been made, not making new sales themselves. EMD was ordered to pay overtime wages and liquidated damages.
EMD appealed, arguing that the district court incorrectly applied the heightened clear and convincing evidence standard in resolving this issue, as opposed to the default preponderance of the evidence standard typically applied in civil cases. The United States Court of Appeals for the Fourth Circuit disagreed, affirming the judgment of the district court, following circuit precedent that has required employers to meet the heightened standard of proof in demonstrating the applicability of FLSA exemptions. While the three-judge panel suggested that the full court reconsider that precedent en banc, the court later denied en banc review. Prior to the SCOTUS ruling, the Fourth Circuit was the only Court of Appeals to require the heightened standard, while every other Court of Appeals that addressed this issue held otherwise. The Supreme Court granted certiorari to resolve the conflict.
Preponderance of the Evidence – The Default Standard
Justice Kavanaugh, authoring the opinion of the Court, noted that when Congress enacted the FLSA, preponderance of the evidence was the default standard of proof for civil litigation and remains the default today. The Supreme Court has deviated from this standard in civil litigation in three main circumstances: 1) where a statute establishes a heightened standard of proof, like sections of the U.S. Code that specifically designate the standard as clear and convincing evidence; 2) when the Constitution requires a heightened standard of proof, such as a clear and convincing evidence standard in some First Amendment cases or before a state may sever parental rights completely; and 3) under Supreme Court precedent, in uncommon cases that “ordinarily” arise “when the government seeks to take unusual coercive action – action more dramatic than entering an award of money damages or other conventional relief – against an individual”, where the Court has required clear and convincing evidence. Price Waterhouse v. Hopkins, 490 U.S. 228, 253, 109 S. Ct. 1775. 104 L. Ed. 2d 268 (1989). Importantly, the opinion noted that the Court has applied a preponderance standard in Title VII employment discrimination cases. Id.
Employers are Held to the Default Standard When Proving FLSA Exemptions
The Court resolved the disagreement over which standard should be used by looking to the statutory language. As the FLSA does not specify a standard of proof for the Act’s exemptions, the Court held that the default preponderance of the evidence standard should apply. Statutory silence, the Court noted, is generally “inconsistent with the view that Congress intended to require a special, heightened standard of proof.” Grogan v. Garner, 498 U.S. 279, 286-287, 111 S. Ct. 654, 112 L. Ed. 2d 755 (1991). Further, this case did not implicate any constitutional rights that would require the use of a heightened standard. Lastly, this case did not involve the government seeking to take any “unusual coercive action” against an individual. Price Waterhouse, 490 U.S., at 253. The Court found that cases under the FLSA are more similar to the Title VII cases, where the Supreme Court has previously held a preponderance standard applies.
The Court was not persuaded by the employees’ public policy arguments. Even if, as the employees advanced, the FLSA was focused on the public’s interest in a well-functioning economy with guaranteed fair wages for workers, that premise would still not demand a heightened standard. The Court also rejected the employees’ contention that because FLSA rights are not waivable, they are distinct from other rights subject to the preponderance standard. Instead, the Court found that waivability or lack of waivability of a right does not dictate the applicable standard of proof. Lastly, the Court rejected the employees’ argument that a heightened standard should apply in FLSA cases because the employer controls much of the evidence and plaintiffs may have low incomes. Once again drawing upon Title VII cases for comparison, the Court noted that a similar dynamic between the respective parties in those cases has not been found to warrant a heightened evidentiary standard.
As a result, the Supreme Court reversed the judgment of the Court of Appeals and held that when an employer seeks to show that an employee is exempt from the FLSA’s minimum-wage and overtime-pay provisions, the preponderance of the evidence standard applies. Because the Court’s usual practice is to leave such matters for remand, it rejected the employees’ request to affirm on the grounds that they would not qualify as outside salesmen even under the preponderance standard.
The Supreme Court’s unanimous ruling clarifies that employers must meet only the preponderance of the evidence standard to prove FLSA exemptions. This decision eliminates the risk of courts imposing a higher burden. By ensuring consistency across jurisdictions, the ruling reduces uncertainty in exemption disputes. Employers should maintain thorough records to substantiate claims but can now do so with greater confidence as to the applicable burden of proof.
