The federal Fair Labor Standards Act (“FLSA”) generally entitles workers to overtime premium pay equaling 150% of the “regular” pay rate. See 29 U.S.C. § 207(a)(1). However, the FLSA also contains various “exemptions” to this general rule. See id. at § 213. The most prominent exemptions apply to workers employed “in a bona fide executive, administrative, or professional capacity,” id,. at § 213(a)(1), certain “outside salesmen,” id., most tractor trailer drivers, id. at § 213(b)(1), and certain “commissioned” salespeople, see id. at § 207(i). If a worker falls within an exemption, then she is not entitled to overtime premium pay.
In litigation, the employer bears the burden of proving that the worker falls within an overtime exemption. That makes good sense. FLSA exemptions, after all, are affirmative defenses raised by the employer.
Over the years, some federal courts have held that the employer’s burden is heightened due to the important public policy goals underlying the FLSA’s overtime pay mandate. The Fourth Circuit Court of Appeals’ opinion in Carrera v. E.M.D. Sales Inc., 75 F.4th 345 (4th Cir. 2023), was such a case. There, the panel affirmed a trial court holding that the employer was required to pay overtime wages because it failed to prove by “clear and convincing” evidence that the worker was exempt.
The employer disagreed and appealed to the U.S. Supreme Court. According to the employer, the burden of proof applicable to an FLSA exemption defense should be the “preponderance of the evidence” standard that generally applies to most civil litigation.
On January 15, 2025, the Supreme Court agreed with the employer and reversed the Fourth Circuit. In a unanimous opinion drafted by Justice Kavanaugh, the Court 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 [FLSA].” E.M.D. Sales, Inc. v. Carrera, __ U.S. __, 2025 U.S. LEXIS 364, *12 (Jan. 15, 2025). The Court emphasized that “the preponderance-of-the-evidence standard has remained the default standard of proof in American civil litigation,” id. at *6-7, and that deviation from the standard is limited to three very narrow circumstances: (i) where the statute explicitly adopts a different standard; (ii) where a different standard is mandated by the U.S. Constitution; and (iii) where a different standard is necessary to protect against “unusual coercive action” by the government, see id. at *7-9. Since none of these circumstances apply to FLSA litigation, “the default preponderance standard governs.” Id. at *9.
The Supreme Court’s holding will come as no great surprise to most FLSA litigators. On the contrary, it is consistent with the Court’s previous observation that “the FLSA gives no ‘textual indication’ that its exemptions should be construed narrowly.” Encino Motorcars, LLC v. Navarro, 584 U.S. 79, 88 (2018). In this writer’s view, application of a “preponderance” standard to FLSA exemption litigation will have little bearing on case outcomes. --PW