On Wednesday, the U.S. Supreme Court ruled unanimously that employers need only prove by a “preponderance of the evidence” that workers are exempt from overtime pay and other protections under the Fair Labor Standards Act (FLSA). The decision, authored by Justice Brett Kavanaugh, overturns a higher standard set by the 4th U.S. Circuit Court of Appeals.
Court Clarifies Standard of Proof
The Supreme Court’s ruling clarifies that employers do not have to meet the “clear and convincing evidence” standard to prove FLSA exemptions. Kavanaugh emphasized that the typical burden of proof in civil cases is a preponderance of the evidence, and the FLSA does not justify a stricter standard. He stated, “This Court must apply the statute as written and as informed by the longstanding default rule regarding the standard of proof.”
This ruling simplifies the defense for employers facing lawsuits, particularly class actions, where workers claim they were improperly classified as exempt from FLSA protections.
Case Background: EMD Sales v. Carrera
The case involves EMD Sales Inc., a grocery distributor, and three of its sales workers who filed a class action lawsuit in 2017. The workers argued that EMD Sales wrongly classified them as outside sales employees, which exempted them from overtime pay. They contended that their primary duties involved tasks such as stocking shelves and handling returns, rather than making sales.
In 2021, U.S. District Judge James Bredar ruled in favor of the workers, requiring EMD Sales to prove the exemption applied by clear and convincing evidence. The 4th Circuit upheld this ruling in 2023, but the Supreme Court found that the appeals court erred by imposing a higher burden of proof.
Impact of the Ruling
The Supreme Court’s decision aligns with six other appeals courts that have addressed this issue, all of which have applied the preponderance of the evidence standard in FLSA cases. By remanding the case to the 4th Circuit, the Supreme Court instructed the lower court to determine whether the workers at EMD Sales qualify as outside sales employees under the correct standard.
Broader Implications
This ruling could have significant implications for businesses, potentially making it easier for them to defend against FLSA exemption claims. The case, EMD Sales Inc. v. Carrera, U.S. Supreme Court No. 23-217, marks a pivotal moment in how courts interpret and apply the burden of proof in labor law cases.
