On January 15, 2025, the U.S. Supreme Court issued its unanimous decision in E.M.D. Sales, Inc. v. Carrera, authored by Justice Kavanaugh, and held FLSA exemptions should be analyzed under the "preponderance of the evidence" standard, rather than the higher “clear and convincing evidence” standard applied by the Fourth Circuit, which hears appeals from the federal district courts in Maryland, North Carolina, South Carolina, Virginia, and West Virginia, and from federal administrative agencies.

EMD is a food distributor which employs sales representatives to manage inventory and take orders at grocery stores that stock EMD’s products. Several of those sales representatives filed a collective action against EMD, alleging the company violated the Fair Labor Standards Act (“FLSA”) by failing to pay them overtime. EMD argued the sales representatives were exempt from the FLSA’s overtime-pay requirement under the outside sales exemption. For that exemption to apply, EMD had to prove: (i) the employees’ main duty involved making sales or obtaining orders and contracts for service, and (ii) they were “customarily and regularly engaged away from the employer’s place or places of business in performing such primary duty,” according to FLSA regulations.

After a bench trial, the District Court found EMD liable for unpaid overtime because the company did not prove by “clear and convincing evidence”—i.e., that it is “highly probable”—that its sales representatives were outside salesmen. On appeal, EMD argued the District Court should have instead used the less stringent “preponderance-of-the-evidence” standard—which would have required EMD only to prove that its claims are more likely to be true than not. Applying Circuit precedent, the Fourth Circuit disagreed and affirmed the District Court’s judgment.

On appeal, the Supreme Court noted the “preponderance” standard is the default in civil trials, and the Court only deviates from that standard in three circumstances: (i) when a statute requires a heightened standard of proof, (ii) when the U.S. Constitution requires it, and (iii) under Supreme Court precedent in cases in which the government pursues “coercive” (i.e., drastic) action against a person, such as taking citizenship away. The Court noted the FLSA is silent as to the standard of proof for exemptions, and FLSA-exemption disputes do not involve constitutional rights or unusual or coercive government action; thus, none of the three scenarios that would justify applying a heightened standard are present in FLSA exemption cases. Justice Gorsuch’s concurring opinion, joined by Justice Thomas, affirmed that “courts apply the default standard unless Congress alters it or the Constitution forbids it.”

The Court was also not persuaded by the employees’ policy-laden arguments that the FLSA protects the public interest, opining, “Other workplace protections, like those under Title VII, also serve important public interests but are subject to the preponderance standard.” Justice Kavanaugh wrote, “If clear and convincing evidence is not required in Title VII cases, it is hard to see why it would be required in Fair Labor Standards Act cases.”

Burdens of proof in civil trials are of make-or-break importance, and the Supreme Court’s confirmation that no heightened standard applies when evaluating employees’ qualification for an FLSA exemption is an important win for employers defending misclassification claims.