Supreme Court Ruling on FLSA Overtime Affirms that 'Preponderance of the Evidence' Is the Default Standard for Civil Litigation in the United States
01.16.25
On January 15, 2025, the U.S. Supreme Court issued a critical ruling in E.M.D. Sales, Inc. v. Carrera, addressing the burden of proof required in Fair Labor Standards Act (FLSA) overtime exemption disputes. The Court held that employers are not required to meet a heightened “clear and convincing evidence” standard when asserting that workers qualify for an overtime exemption. Instead, the Court affirmed the application of the lower “preponderance of the evidence” standard, which is commonly used in civil cases.
This decision resolves a split among the circuits, with the Fourth Circuit having previously ruled that employers must meet the higher clear and convincing evidence standard when claiming that employees qualify for the FLSA’s overtime exemptions. In contrast, six other circuits throughout the country had consistently applied the preponderance of the evidence standard, which requires a showing that the employer’s position is more likely than not true.
The case involved former employees of E.M.D. Sales, a food distributor, challenging their classifications as exempt employees. The former employees argued that the heightened clear and convincing standard must be applied to overtime exemption disputes because the FLSA not only protects individual rights but also “protects the public’s interest in a well-functioning economy where workers are paid a fair wage.” The Supreme Court disagreed, highlighting that the clear and convincing standard is used only in a limited set of circumstances—none of which are implicated in FLSA overtime exemption cases.
Key Takeaways:
- Standardization of Burden: This ruling is significant for businesses as it standardizes the burden of proof across federal courts in FLSA overtime exemption disputes, ensuring a more uniform approach to FLSA exemption cases nationwide. It also makes clear that, although the burden still is on the employer to prove an FLSA exemption applies, employers are not required to meet a heightened burden of proof to do so.
- Limitations on Clear and Convincing Standard: Importantly, the Court’s decision also clarifies that the clear and convincing standard is reserved only for matters when (1) the language of the statute explicitly calls for a heightened standard of proof; (2) the Constitution mandates a heightened standard of proof; or (3) in rare situations involving coercive government action, such as taking away a person’s citizenship. Absent these limited exceptions, the Court highlighted that the preponderance of the evidence standard is the default standard in U.S. civil litigation.
- Employer Responsibilities: The Court’s decision also underscores the importance of accurately classifying employees under the FLSA, as employers still bear the responsibility of proving that an exemption applies.
Next Steps for Employers:
Employers should review their overtime exemption classifications to ensure compliance with the FLSA’s requirements. While this ruling ensures that the lower burden of proof—preponderance of the evidence—applies in FLSA exemption disputes, employers should continue to maintain clear documentation and policies to substantiate their employee classifications. As this area of law continues to evolve, it is prudent for employers to consult with legal counsel to ensure their practices are fully compliant with the FLSA and that they are prepared to defend their position if necessary. Klehr Harrison’s Labor and Employment Practice Group will continue to monitor and report on this and other relevant matters.
Co-authors Lee Moylan, chair, and Monica Matias Quiñones, associate, are members of the labor & employment practice group at Klehr Harrison.