Supreme Court Changes Standard of Proof for Overtime Cases

In E.M.D. Sales, Inc. v. Carrera, the U.S. Supreme Court changed the proof standard employers must meet in Virginia to classify employees as exempt from the Fair Labor Standards Act’s (FLSA) overtime provisions. Decided on January 15, 2025, the Court unanimously held that employers need only prove such exemptions by a “preponderance of the evidence,” rather than “clear and convincing” evidence.  This makes it easier for employers to win unpaid overtime cases. 

Case Background:

E.M.D. Sales, Inc., a food distributor, employed sales representatives who worked over 40 hours per week without receiving overtime pay. The company classified these employees under the FLSA’s “outside sales” exemption, which excludes certain employees from overtime requirements. The employees contested this classification, arguing they were entitled to overtime compensation.

Lower Court Proceedings:

The United States Court of Appeals for the Fourth Circuit (which governs Virginia) affirmed the decision of a Maryland federal judge, determining that E.M.D. Sales failed to demonstrate that the “outside salesperson” exemption applied. The court applied a “clear and convincing evidence” standard, a higher burden of proof than the typical “preponderance of the evidence” standard used in civil cases.

Supreme Court Decision:

The Supreme Court reversed the Fourth Circuit.  Now, throughout the United States, employers need only satisfy the lower “preponderance of the evidence” standard when they assert FLSA exemptions.  This decision standardizes the burden of proof for FLSA exemptions across jurisdictions.  The employer in this case now will have another change to show that it was correct to apply the “outside sales” exemption.