US Supreme Court Rejects Heightened Standard of Proof for FLSA Overtime Exemptions

01.22.2025
HR & Safety

The following article first appeared in the Insights section of Harris Beach Murtha’s website. It is reposted here with permission.


A recent decision by the U.S. Supreme Court solidified the evidentiary standard of proof for federal wage law disputes where employers seek to establish their employees are appropriately classified as exempt under the Fair Labor Standards Act.

Specifically, on Jan. 15, 2025, the U.S. Supreme Court unanimously held in E.M.D. Sales, Inc. v. Carrera that employers need only show that the employee’s position is more likely than not exempt from the FLSA’s minimum wage and overtime compensation requirements under the “preponderance-of-the-evidence” standard.

This ruling rejected the U.S. Court of Appeals for the Fourth Circuit’s decision to apply a “more demanding standard” of “clear and convincing evidence” to this case.

The Carrera decision provides clarity to employers, and confirms that federal courts will not be required to apply a heightened standard of proof when employers try to prove that an employee was covered by an overtime exemption.

Case Background and Procedural History

In Carrera, three sales representatives sued their employer, EMD Sales, a food distribution company located in Washington, D.C., alleging EMD Sales misclassified them under the “outside-salesman exemption” and failed to pay overtime.

Following a bench trial, the U.S. District Court for the District of Maryland ultimately found in the plaintiff’s favor.

The court reasoned that EMD failed to prove “by clear and convincing evidence” that its sales representatives were exempt under the outside salesman exemption because the employees executed the terms of sales already made rather than making new sales themselves.

EMD appealed the case to the U.S. Court of Appeals for the Fourth Circuit and argued that the District Court should not have applied the heightened clear and convincing standard of proof, but rather, the court should have applied the preponderance-of-the-evidence standard.

The Fourth Circuit affirmed the District Court’s decision, and EMD appealed to the U.S. Supreme Court.

U.S. Supreme Court Decision

Following its review of the Fourth Circuit’s decision, the U.S. Supreme Court unanimously held that “the preponderance-of-the-evidence standard applies when an employer seeks to show that an employee is exempt from the minimum-wage and overtime-pay provisions of the Fair Labor Standards Act.”

This decision reversed the District Court and Fourth Circuit rulings, which applied the more stringent, clear and convincing standard.

In the opinion, authored by Justice Brett Kavanaugh, the court reasoned the preponderance standard is the “default standard of proof in American civil litigation,” allowing both parties of an action to “share the risk of error in roughly equal fashion.”

The court further explained that federal courts generally only deviate from the preponderance standard in “three main circumstances.”

These circumstances include: (1) if a statute requires a heightened standard of proof, (2) if the U.S. Constitution requires a heightened standard of proof, and (3) certain “uncommon” cases that typically arise when the government seeks to take unusual coercive action “more dramatic than entering an award of money damages or other conventional relief—against an individual.”

The court found that none of the three exceptions applied and the evidentiary standard of proof when seeking to prove that an employee is FLSA exempt should be the same as “other workplace protections that vindicate important public interests” such as Title VII claims, which is preponderance-of-the-evidence.

Employer Takeaways

The U.S. Supreme Court’s decision in Carrera provides clarity for employers nationwide and confirms they do not need to meet a heightened evidentiary standard for misclassification claims under the FLSA.

Employers do, however, still bear the burden of establishing that an employee properly falls within one of the FLSA overtime exemptions.

Therefore, employers with overtime-exempt employees still must ensure job duties and compensation meet the requirements of the applicable exemption, and consider making adjustments as necessary.


About the authors: Salvatore Gangemi, Scott Piper, and Daniel Palermo are Harris Beach Murtha members with vast experience representing employers on labor and employment issues.

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