The Fair Labor Standards Act (FLSA) exempts many categories of employees from minimum-wage requirements and exempts many more from overtime-pay requirements. Common public sector exemptions include those for executive, administrative, or professional employees. Other exemptions are for those employed “in the capacity of outside salesman” and certain highly skilled jobs involving computers.
Employers are responsible for determining whether an employee qualifies for one or more of these exemptions. If an employee challenges an exemption determination in court, the employer has the burden of proving that the exemption applies.
EMD Sales, Inc. (EMD) distributes food products in the Washington, D.C. area. EMD employs sales representatives who manage inventory and take orders at grocery stores. Several sales representatives sued EMD, alleging that the company violated the FLSA by failing to pay them overtime. EMD argued that the sales representatives were outside salesmen and therefore exempt from the FLSA’s overtime-pay requirement.
After a bench trial, a Maryland District Court found EMD liable for overtime pay because EMD did not prove by “clear and convincing evidence” that its sales representatives met the legal criteria for outside sales people. The court ordered EMD to pay overtime wages and liquidated damages. EMD appealed.
On appeal to the U.S. Court of Appeals for the Fourth Circuit, EMD contended that the District Court should have applied the less stringent “preponderance of the evidence” standard. The Fourth Circuit disagreed and affirmed the judgment of the district court. EMD appealed to the U.S. Supreme Court (USSC).
The USSC reversed and held that the preponderance of the evidence standard applies to determining whether an employee is exempt from the FLSA minimum-wage and overtime-pay provisions. The Fourth Circuit was the only circuit that used the higher clear and convincing standard. The USSC reasoned that since civil litigation generally uses the preponderance standard, and the FLSA did not specify that the higher standard applied, the default preponderance standard applies to these FLSA determinations.
E.M.D. Sales v. Carrera, 220 L.Ed 2d 309 (2025).