The U.S. Supreme Court heard arguments on Tuesday regarding how difficult it should be for employers to prove their workers qualify for exemptions from overtime pay and other protections under U.S. wage laws.
The justices spent about an hour considering an appeal by grocery distributor EMD Sales, challenging a ruling from the 4th U.S. Circuit Court of Appeals. That ruling had stated that the company failed to demonstrate by “clear and convincing evidence” that its sales representatives were ineligible for overtime pay.
The 4th Circuit, based in Richmond, Virginia, is the only appeals court to require such a high standard of proof. Six other appeals courts have ruled that employers only need to prove an exemption by “a preponderance of the evidence,” the standard used in most civil cases.
It was unclear how the Supreme Court was leaning, but the justices posed more questions to Lauren Bateman, who represented a group of EMD sales representatives. The company claims these workers do not qualify for overtime pay. Some justices appeared more skeptical of Bateman’s arguments.
Bateman argued that the Fair Labor Standards Act (FLSA) creates special protections because it safeguards not only individual workers’ rights but also prevents businesses from underpaying employees to gain a competitive advantage. She also said the law encourages employers to hire more workers instead of paying overtime wages. According to Bateman, this makes the stakes in FLSA cases higher than in other types of litigation that involve monetary damages for individual plaintiffs.
However, Chief Justice John Roberts and Justice Samuel Alito questioned why this reasoning would not apply to other laws that protect private rights while serving a broader public interest, such as the federal Clean Water Act or public assistance programs. Alito pointed out, “The government provides lots of monetary benefits that are critically important to some people. Would you have us say that none of those rise to the level of importance [of] overtime payments under the FLSA?”
Justice Ketanji Brown Jackson appeared more receptive to the higher standard of proof. She echoed Bateman’s point, asking, “Isn’t this more than money damages? I would think the government would say the interests go beyond just pure money damages.”
Aimee Brown of the U.S. Department of Justice argued against adopting a higher burden of proof, and so did EMD’s attorney, Lisa Blatt. Both pointed out that if Congress had intended to impose a higher burden of proof for FLSA exemptions, it would have explicitly done so when it passed the law in 1938. Blatt also noted that other important employment laws, such as Title VII of the Civil Rights Act of 1964 and the National Labor Relations Act, do not require more than a preponderance of the evidence in similar cases.
The dispute stems from a 2017 proposed class action in which three workers accused EMD of wrongly classifying them as “outside sales employees.” These employees primarily work away from their employer’s place of business and are exempt from overtime pay under the FLSA. In 2021, U.S. District Judge James Bredar in Baltimore ruled in favor of the plaintiffs after a bench trial, concluding that their main duties were not sales-related. Instead, they spent their time stocking shelves, removing damaged or expired items, and issuing credits to grocery stores.
Bredar had required EMD to demonstrate with clear and convincing evidence that the exemption applied. The 4th Circuit upheld this decision last year, citing its precedent for the burden of proof in FLSA cases.
The case, EMD Sales Inc v. Carrera, is before the U.S. Supreme Court under case number 23-217.
