By Amenda Blake
On January 15, 2025, the U.S. Supreme Court issued a unanimous decision holding that the preponderance-of-the-evidence standard applies when an employer is attempting to prove that an employee is exempt from the minimum-wage and overtime-pay provisions of the Fair Labor Standards Act (FLSA).
The Fair Labor Standards Act was enacted by Congress in 1938 and, among other things, it guarantees covered employees the federal minimum wage under 29 U.S.C. § 206(a)(1), and generally requires overtime pay when a covered employee works more than 40 hours per week under 29 U.S.C. §207(a)(1). However, certain employees who fall within the categories of worker found in 29 U.S.C. § 213(a)-(b) may be exempt from these assurances.
In E.M.D. Sales, Inc., et al., v Faustino Sanchez Carrera et al., the Petitioners were food distributors in the Washinton, D.C. metropolitan area for international food products, that employed sales representatives who managed inventory and took orders at grocery stores that stocked its products. Several E.M.D sales representatives brought suit against the company in the U.S. District Court for the District of Maryland, alleging that E.M.D violated FLSA by failing to pay them overtime. E.M.D argued that the employees fell within the outside-salesmen exemption found in the Act under 29 U.S.C. § 213(a)(1).
The District Court found that E.M.D failed to prove by “clear and convincing evidence” that the employees were covered by the exemption. Defendants appealed the decision, contending that the District Court should have applied the less strict “preponderance-of-the-evidence” standard. The U.S. Court of Appeals for the Fourth Circuit disagreed with the Defendants contention and followed the Circuit precedent of requiring employers to prove the applicability of exemptions under FLSA by clear and convincing evidence and affirmed the judgement of the District Court. As the Fourth Circuit stood alone in requiring this higher standard of proof for employers attempting to prove employees were exempt under FLSA, the Supreme Court of the United States granted certiorari to resolve the conflict.
In resolving this matter, the Supreme Court reviewed the historical context the FLSA was enacted in. They found that, in 1938, the default standard of proof was the preponderance-of-the-evidence standard. The U.S. Supreme Court further found that since 1938, the preponderance-of-the-evidence standard has remained the default standard of proof in American civil litigation, and courts have only deviated from this standard in three instances. First, if the statute establishes a heightened standard of proof in the statutory code language, or Congress uses a term that has a settled common-law meaning that itself requires a heightened standard of proof. Second, if the Constitution requires a heightened standard of proof, such as in certain First Amendment cases or when the Due Process Clause necessitates one. Finally, a heightened standard of proof may be appropriate in certain other “uncommon” cases which ordinarily arise when the government seeks to take an unusual coercive action that is more dramatic than entering an award of money damages or other conventional relief against an individual.
The U.S. Supreme court found it most relevant to the case that the Court has applied a preponderance standard in Title VII employment discrimination cases. The Court was not persuaded by the employees' argument that public policy required a heightened standard of proof because the Act's focus was on the public's interest in a “well functioning economy where workers are guaranteed a fair wage,” as other workplace protections, such as those found in Title VII, remain subject to the preponderance standard. The Court was also not persuaded that a heightened standard should apply due to the employer controlling much of the relevant evidence and that plaintiffs in these cases may have low income. Again, the Court related it to the preponderance standard required in Title VII cases where employers also hold much of the relevant evidence and the plaintiffs may be low-income.
Ultimately the Court held that the preponderance-of-the-evidence standard applies when an employer seeks to show an employee is exempt from the minimum-wage and overtime-pay provisions of the Fair Labor Standards Act. The Court left the lower court to decide the question of whether the employees were exempt under the Fair Labor Standards Act using the preponderance standard.
This decision is important for employers as it allows for employers to classify employees as exempt from the minimum-wage and overtime-pay provisions of the Fair Labor Standards Act without being subject to a heightened standard of review. This means that after a court or jury weighs all the evidence fairly and impartially, if the evidence provided by the employer produces a reasonable belief that what is sought to be proven is more likely true than not, the employer has met the burden of proof required under the preponderance-of-the-evidence standard.
If you have any questions about this legal update, wage and hour laws, or are in need of labor and employment advice, please contact us at (860) 361-7999. Rose Kallor, LLP provides a full range of labor and employment counseling to private and public-sector employers.
Comments
There are no comments for this post. Be the first and Add your Comment below.
Leave a Comment