E.M.D. Sales, Inc. et al. v. Carrera et al., a case heard in November of 2024 was decided in early 2025 by the Supreme Court of the United States clarifying which standard of proof applies when an employer seeks to prove that an employee is exempt from the minimum-wage and overtime pay provisions of the Fair Labor Standards Act (FLSA).
The Fair Labor Standards Act
In 1938, Congress enacted the FLSA seeking to provide protections for workers by establishing nationwide minimum wage and overtime requirements. Specifically, the federal minimum wage requirements are governed by U.S.C. §206(a)(1), while overtime is covered by U.S.C. §207(a)(1). In general, these provisions mandate that employees must be paid a certain (federally regulated) minimum as compensation for their employment and assures that employees are more heavily compensated for any hours worked above those exceeding forty hours in one week. However, not all employees are eligible for these protections and Congress has provided a list of exempted types of employees in §213(a)(1) (non-exhaustive).
An Employer Must Demonstrate by a “Preponderance of the Evidence” that an Employee is Exempt from FLSA §206(a)(1) and §207(a)(1)
E.M.D. Sales, Inc. presented allegations made by several sales representatives that EMD had failed to pay them overtime. In response, EMD argued that the sales representatives were in fact exempt from the FLSA’s overtime requirements, thus obviating the need to compensate them for any alleged overtime – a fact that EMD was burdened with proving. Despite EMD’s efforts, both the district court and the Fourth Circuit, applying the “clear and convincing” standard of proof, found that EMD had not sufficiently demonstrated that the sales representatives were exempt from the FLSA provisions. Notably, the 4th Circuit is the only one (out of 13) to apply this standard. However, according to the Supreme Court of the United States (SCOTUS), the 4th Circuit got it wrong.
In its eight-page opinion, SCOTUS reminded the lower courts that the “preponderance of the evidence” standard is set as the default for civil cases. SCOTUS further noted that imposing higher standards should be reserved only for specific instances, stating that:
A more demanding standard, such as clear and convincing evidence, applies only when a statute or the Constitution requires a heightened standard or in certain other rare cases, such as “when the government seeks to take unusual coercive action—action more dramatic than entering an award of money damages or other conventional relief—against an individual.”
Since the issues in E.M.D. Sales, Inc. did not revolve around “unusual coercive action” and neither the Constitution nor FLSA imposed a heightened evidentiary standard for proving an exempt employee, SCOTUS confirmed that proving an employee’s exempt status only requires a “preponderance of the evidence.”
But What is the Difference Between “Preponderance of the Evidence” and “Clear and Convincing”?
Good question.
While there are no set points at which one level of proof ascends from its lower standard to a higher, more certain, level of probability; the difference can be described as changes in the degree of certainty required to establish a claim or fact. “Preponderance of the evidence” is the default standard in civil cases and presents the lowest burden for those seeking to prove something as true. In that regard, after being presented with evidence, the trier of fact is tasked with deciding whether the existence of a fact is more probable than its nonexistence. In other words, does the evidence show that fact is more likely true than not true. Though not necessarily quantifiable, this implies that evidence demonstrating that a fact is only 51% probable would meet this standard’s requirements – hence it being the lowest.
In contrast, “clear and convincing” sets a higher standard, requiring a finding of a high probability that a purported fact is true. The evidence must be so clear as to leave no substantial doubt and sufficiently strong to command the unhesitating assent of every reasonable mind. Like the
“preponderance of the evidence” standard, this burden of proof is not necessarily quantifiable, but can be described as requiring more than simply tipping the scales.
Though these standards may not be totally clear, the difference in their requirements may be the deciding factor in determining liability on certain issues. In the case of employers concerned with proving exempt employee status, E.M.D. Sales, Inc. now makes it universally clear that they must do so by a “preponderance of the evidence.”
