On January 15 2025, the Supreme Court announced its decision in the major employment law case E.M.D. Sales v. Carrera. This decision reversed a Fourth Circuit Court ruling on the proper evidentiary standard employers must meet to prove that their employees are exempt from the Fair Labor Standards Act’s (FLSA) overtime pay and minimum wage requirements. The Fourth Circuit rejected the preponderance of evidence standard used by all other U.S. appeals courts and ruled that the higher clear-and-convincing-evidence standard must be used.
Landmark submitted a brief arguing that the Fourth Circuit ruling was incorrect and posed an unnecessary burden on businesses across the country. Had the clear and convincing evidence standard been upheld, it would have made it nearly impossible for businesses to employ outside salespeople, or other employees who work atypical schedules.
Justice Kavanaugh, writing for a unanimous Court, held that the lower preponderance-of-the-evidence standard is the correct evidentiary standard to use when an employer exempts employees from the FLSA’s requirements. Preponderance of the evidence is the default standard for typical civil cases involving monetary disputes.
A group of former employees brought this lawsuit, seeking overtime compensation under the FLSA. E.M.D. Sales, an independent food distribution company, argued that their employees were exempt from the FLSA’s overtime pay provisions because they were employed as outside salespeople.
The FLSA sets minimum wage and overtime pay requirements for most of the American workforce. It also exempts scores of American workers from those requirements because of the nature of their jobs. For an exemption to apply, an employer (such as E.M.D. Sales) must show that the relevant employee is, in fact, exempt under the law.
Kavanaugh noted that the Court has deviated from this default standard for civil litigation in three main circumstances; this case, however, did not fall under any of them. He added that the Court has consistently applied a preponderance-of-the-evidence standard in Title VII employment-discrimination cases.
In a short concurrence, Justice Gorsuch stated that it is the obligation of the judiciary to “apply the default standard” of proof unless there is a specific reason to use a higher standard. E.M.D. Sales, Inc. v. Carrera, No. 23-217, 2025 U.S. LEXIS 364, *13 (Jan. 15, 2025) (Gorsuch, J., concurring). He writes that the majority opinion adheres to that principle, and he is therefore “pleased to join” the unanimous decision. Id.
Whether the employees in this specific case would fail to qualify as outside salespeople, even under the preponderance standard, is left for the Fourth Circuit to decide on remand.
Landmark authored a brief on behalf of the National Association of Wholesaler-Distributors and International Foodservice Distributors Association. Our brief focused on the unique role outside salespeople play in today’s businesses. Outside salespeople have been exempt from the FLSA’s overtime and minimum-wage provisions since its passage in 1938. We argued that employers should be subject to the same evidentiary standards as typical litigants when establishing employee exemptions, so as not to unduly hamper enterprise.
The Supreme Court correctly resolved a potentially damaging circuit split with its decision today.
Read the Supreme Court’s opinion here!
Read Landmark’s brief here, filed on behalf of the National Association of Wholesaler-Distributors (NAW) and International Foodservice Distributors Association (IFDA).