On Election Day, November 5, the United States Supreme Court will be hearing argument in E.M.D. Sales, Inc. v. Carrera, an important case that addresses the evidentiary standard an employer must satisfy to establish whether an exemption under the Fair Labor Standards Act (“FLSA”) applies.
To set the stage, the FLSA governs the payment of overtime to eligible workers. Workers eligible for overtime must receive overtime at the correct rate, unless one of the thirty-four statutory exemptions applies. Those exemptions would exempt the employer from having to pay overtime. A few of those exemptions are: bona fide executives, professionals, and outside salesmen. Once an employer asserts the defense that the employee, or employees, in question are exempt from the overtime requirement, the employer then bears the burden of proving that the exemption applies. The question that the Supreme Court will be answering is what burden of proof employers have to prove that the statutory exemption applies.
According to the question presented, six federal circuits currently hold that the employer must satisfy the preponderance of the evidence standard – the typical standard that applies in many civil cases. This standard is generally understood to mean the party attempting to satisfy the standard must prove that the evidence establishes that it is more likely than not true. Or, put differently, it is at least 50.1% true based on the evidence in the record.
However, in this case the Fourth Circuit held that the clear and convincing standard, which is a higher burden of proof, applies instead. Although percentages with respect to the varying burdens of proof are imprecise, this burden of proof falls in between preponderance of the evidence (at least 50.1%) and beyond a reasonable doubt (98% or 99%), which is the standard of proof required for criminal convictions. The Fourth Circuit, which held that the clear and convincing standard applies, has previously recognized that “[c]lear and convincing evidence produces in the mind of a fact finder a firm belief or conviction, without hesitancy, about the truth of the allegations.” United States v. Francis, 686 F.3d 265, 274 (4th Cir. 2012). This higher standard will make it more difficult for employers to prove whether a statutory exemption applies.
This case will have a significant impact on FLSA litigation. Violations of the FLSA carry significant penalties, including liquidated damages, back pay, and possible attorney’s fees and costs. Therefore, whether an employer in an FLSA case can prove a statutory exemption applies could be the difference between winning and losing the case. I will continue to follow this case and provide an update once the Court issues its opinion.