The federal Fair Labor Standards Act (FLSA) is a cornerstone of employee rights, outlining regulations for minimum wage and overtime pay. However, the FLSA does exempt certain employees from these protections, and employers often rely on these exemptions to defend against claims. To determine whether an exemption applies, the employer bears the burden of proof. The U.S. Supreme Court recently clarified the standard of proof required in such cases.
In the case of E.M.D. Sales, Inc. v. Carrera, employees of a grocery distribution company sought unpaid overtime pay under the FLSA. The employer claimed that these employees were exempt under the outside sales exemption. The trial court rejected this argument, stating that the employer failed to prove the exemption by “clear and convincing evidence.” The Fourth Circuit Court of Appeals agreed, upholding the “clear and convincing evidence” standard, which contrasts with other federal appellate courts that have adopted a “preponderance of the evidence” standard.
The preponderance standard is less demanding, indicating that something is more likely than not to be true, often equated to a 51 percent probability. In contrast, clear and convincing evidence implies a higher likelihood, though not quantified, and is considered more stringent than the preponderance standard but less so than the “beyond a reasonable doubt” standard used in criminal cases.
A unanimous Supreme Court endorsed the preponderance standard, which is the default rule for civil lawsuits. Justice Brett Kavanaugh wrote that the clear and convincing standard should only be used when an exception applies. He identified two main exceptions: when required by statute or the Constitution, and when the government takes highly coercive action against an individual. Since neither exception was applicable in wage disputes between businesses and employees, the Court saw no reason to deviate from the preponderance standard.
This Supreme Court decision is not limited to the outside sales exemption; it extends to all FLSA exemptions. Consequently, employers facing FLSA claims regarding minimum wage violations or unpaid overtime pay will find it easier to demonstrate that an exemption applies.
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