Supreme Court Decides E.M.D. Sales, Inc. v. Carrera

On January 15, 2025, the U.S. Supreme Court decided E.M.D. Sales, Inc. v. Carrera, No. 23-217, holding that the Fair Labor Standards Act of 1938 requires an employer to demonstrate by a preponderance of the evidence, rather than by clear and convincing evidence, that an employee is exempt from the statute’s minimum-wage and overtime-pay requirements. 

The Fair Labor Standards Act requires employers to pay their employees a minimum wage and overtime compensation. But it also exempts certain categories of employees — including anyone employed “in the capacity of an outside salesperson” who “regularly works away from the employer’s place of business” — from minimum-wage and overtime-compensation requirements. In this case, Faustino Sanchez Carrera and two other sales representatives sued their employer, food distributor E.M.D., alleging that the company violated the Act by failing to pay them overtime when they worked more than 40 hours per week. E.M.D. argued in response that the employees qualified for the “outside salesperson” exemption. The district court held that E.M.D. had failed to prove the exemption by “clear and convincing evidence.” E.M.D. appealed, arguing that the district court should have applied the lower preponderance-of-the-evidence standard. The Fourth Circuit rejected that argument and affirmed. 

In a unanimous decision, the Supreme Court reversed and remanded, holding that the preponderance-of-the-evidence standard applies when an employer seeks to demonstrate that an employee is exempt from the FLSA’s minimum-wage and overtime-pay provisions. Writing for the Court, Justice Kavanaugh observed that the preponderance-of-the-evidence standard is the default burden of proof in American civil litigation. The Court reasoned that, because the Act does not specify a standard of proof, that default rule should apply absent one of three narrow exceptions to that rule, each of which the Court found inapplicable to the case before it. 

The Court also rejected the employees’ policy argument that a clear-and-convincing standard was required to protect the public’s interest in a “well-functioning economy,” observing that other workplace protections, like those under Title VII of the Civil Rights Act, also serve important public interests but are subject to the preponderance standard. 

Justice Kavanaugh delivered the unanimous opinion of the Court.