When employers classify an employee as exempt from the Fair Labor Standards Act’s (FLSA) overtime-pay and minimum-wage requirements, the employer must demonstrate that the employee qualifies for an exemption.1 In litigation, it would be said that the employer “bears the burden of proof.” But how high is the bar for proof? In criminal cases, the prosecution must prove the elements of a crime “beyond a reasonable doubt.” In civil cases, the default burden of proof is a “preponderance of the evidence,” which means that the party with the burden of proof shows a greater than 50% chance that the claim is true, or that it is more likely true than not. In some civil cases, courts apply a heightened “clear and convincing evidence” standard which requires the party with the burden of proof to show that its claim is “highly probable”.2 In its recent decision in E.M.D. Sales, Inc. v. Carrera, 604 U.S. 45 (2025), the U.S. Supreme Court clarified the standard applicable when an employer tries to prove an employee is exempt under the FLSA.
E.M.D. Sales, Inc. (EMD) is an international food products distributor operating in the Washington D.C. area which employs sales representatives to “manage inventory and take orders….”3 A number of sales representatives sued EMD alleging that they were not paid for overtime in violation of the FLSA.4 EMD argued that the employees were exempt from the FLSA’s overtime-pay requirement because they were outside salesmen.5 After a trial, the U.S. District Court for the District of Maryland found that EMD failed to prove “by clear and convincing evidence” that the employees were exempt and ordered EMD to pay overtime wages and liquidated damages.6 The Fourth Circuit court of appeals affirmed the judgment of the District Court.7
In a 9-0 decision, the Supreme Court reversed the Fourth Circuit, finding that the lower, default, preponderance-of-the-evidence standard applies to when demonstrating an employee is exempt under the FLSA.8 The Court noted that the FLSA does not specify a standard of proof, and thus applied the default rule because none of the three narrow exceptions for deviating from the default applied.9 The employees made a number of policy-related arguments as to why the heightened clear and convincing evidence standard should apply, but the Court was ultimately not convinced, and pointed in part to the fact that the preponderance standard also applies in Title VII cases.10
Using the preponderance-of-the-evidence in FLSA exemption claims is not new for most of the country. In fact, of the federal courts of appeals that addressed the issue, only the Fourth Circuit had applied the clear and convincing evidence standard.11 The Eighth Circuit Court of Appeals had not previously addressed the issue, however, and thus the standard sat as somewhat of an open question for Minnesota Employers before the ruling in E.M.D. Sales. The Supreme Court’s decision ensures uniformity of the standard of proof in FLSA exemption cases across the country.
When classifying employees as exempt, employers should keep the burden of proof in mind. While you probably are not involved in litigation at the time of classification, you may find yourself defending a lawsuit in the future. Knowing that you have the facts necessary to carry your burden of proof will allow you to carry on the litigation with greater confidence and may help bring an early resolution to the case. As always, documentation is important, and employers should regularly review exemptions, keep job descriptions up-to-date, and ensure compliance with any applicable state wage and hour laws, in addition to the FLSA.
- See Corning Glass Works v. Brennan, 417 U.S. 188, 196–97 (1974). ↩︎
- Colorado v. New Mexico, 467 U.S. 310, 316 (1984) (explaining that clear and convincing evidence requires that the truth of factual contentions be “highly probable”). ↩︎
- E.M.D. Sales, Inc., 604 U.S. at 48. ↩︎
- Id. ↩︎
- Id. ↩︎
- Id. at 48–49. ↩︎
- Id. at 49. ↩︎
- Id. at 49–52. ↩︎
- Id. ↩︎
- Id. at 52–54. ↩︎
- Id. at 49 (collecting cases). ↩︎
