by Mark Schickman

The “standard of proof” is an important issue in litigation. Usually, it’s the burden a suing employee has to prove all elements of their case. But it’s the employer’s burden to show that an employee is “exempt” from the requirements of the Fair Labor Standards Act (FLSA). Is it enough for the employer to prove that point by a “preponderance of the evidence”—meaning that it is more likely than not? Or must the employer meet the higher standard of “clear and convincing evidence”—a standard that commands the assent of every reasonable mind? As a recent U.S. Supreme Court case demonstrates, the standard of proof often determines the outcome.

Background

The FLSA requires employers to pay their employees a minimum wage and overtime compensation. But it also exempts many categories of employees from the minimum wage and overtime compensation requirements. The dispute here concerns the standard of proof an employer must satisfy to show an employee is exempt.

EMD distributes international food products in the Washington, D.C., metropolitan area. It employs sales representatives who manage inventory and take orders at grocery stores that stock EMD products. Several EMD sales representatives sued the company in the U.S. District Court for the District of Maryland. They alleged the company violated the FLSA by failing to pay them overtime.

EMD did not deny that the employees worked more than 40 hours per week without receiving overtime pay. But it argued that they fell within the Act’s outside sales exemption.

Higher Standard Affirmed on Appeal

The district court concluded EMD had to prove “by clear and convincing evidence” that the employees qualified as outside salesmen and failed to meet that standard of proof. The court found the employees primarily executed the terms of sales already made rather than making new sales themselves. It therefore ordered EMD to pay overtime wages and liquidated damages.

EMD appealed, claiming that the district court should have applied the less-stringent preponderance-of-the-evidence standard rather than the clear-and-convincing-evidence standard. The U. S. Court of Appeals for the 4th Circuit disagreed and affirmed the district court’s judgment.

EMD appealed again, this time to the U.S. Supreme Court.

Supreme Court Defaults to Lower Standard

In 1938, when Congress enacted the FLSA, the established default standard of proof in American civil litigation was the preponderance-of-the-evidence standard. Since then, the preponderance-of-the-evidence standard has remained the default standard of proof in American civil litigation.

A more demanding standard, such as clear and convincing evidence, applies only when a statute or the Constitution requires a heightened standard or in certain other rare cases. Importantly, the Supreme Court uses a preponderance standard in employment discrimination cases under Title VII of the Civil Rights Act of 1964. Moreover, the FLSA doesn’t specify a standard of proof, and faced with silence, courts usually apply the default preponderance standard.

Against that statutory analysis, the EMD employees relied on policy-laden arguments for a heightened standard when an employer seeks to show that an employee is exempt, contending that the public has an interest in a well-functioning economy where workers are guaranteed a fair wage. They also argued the heightened standard is appropriate because the employer controls much of the evidence relevant to establishing a violation and because employees in those cases may have low incomes, as well.

The Supreme Court rejected those arguments. Other workplace protections vindicate important public interests, and important employment discrimination cases remain subject to the preponderance standard. There, too, the employer controls much of the evidence relevant to establishing a violation, and there may be economic disparities between the parties. Rather than choose sides in a policy debate, the Court applied the statute as written and as informed by the longstanding default rule regarding the standard of proof.

The employees then urged the Court to find them to be nonexempt even under the lower standard of proof, but the Supreme Court sent that issue back to the trial court for further proceedings consistent with its opinion. E.M.D. Sales, Inc. v. Carrera (US 23-217 1/15/25).

Bottom Line

Establishing an exemption is a fact-extensive exercise, determined largely by the specifics of the job performed. It’s difficult enough to win those cases using the regular “preponderance-of-the-evidence” standard, rather than the much stricter burden of “clear and convincing proof.” It is notable that, in an age of great political dissension, this opinion was the product of a unanimous Supreme Court.

Mark I. Schickman is Editor of the California Employment Law Letter and the founder of Schickman Law in Berkeley, California. Mark has successfully litigated almost every type of employment case in the courts before juries and administrative agencies and on appeal and is a popular and engaging trainer providing employment advice to employers across the country. He can be reached at Mark@SchickmanLaw.com.