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The Burden of Proof for Wage-Hour Claims

by Jennifer Shaw | | January 22, 2025

The U.S. Supreme Court recently issued an interesting employment law decision, E.M.D. Sales, Inc., et al. v. Carrera.

As with the California Wage Orders and Labor Code, the FLSA contains several overtime exemptions. It is the employer’s burden to prove an employee falls under one of these exemptions. The Fourth Circuit Court of Appeals was split with other federal appellate courts as to what evidentiary standard applies to FLSA claims, so the Supreme Court agreed to hear the case. 

In E.M.D. Sales, employees sued their employer for unpaid overtime. The company argued that the employees were exempt from overtime under the FLSA’s outside sales exemption. The federal district court and the Fourth Circuit applied the “clear and convincing evidence” standard. The Supreme Court rejected this approach and ruled that the lower, more employer-friendly “preponderance of the evidence” standard applies. This standard is essentially “50% plus a feather,” and much easier to satisfy than clear and convincing evidence.

The Court identified three circumstances in civil litigation that require a higher burden than the preponderance of the evidence: (1) if a statute requires a more stringent burden of proof; (2) if the Constitution requires a heightened burden; and (3) in certain situations involving “coercive government action.” Because the FLSA does not specify a standard of proof, the Court ruled that the default preponderance of the evidence standard applies.

The employees in E.M.D. Sales argued that the “public’s interest in a well-functioning economy where workers are guaranteed a fair wage” demands that employers satisfy a higher burden of proof. The Court was unconvinced, though, particularly because other employment protections are subject to the lower standard: “Rather than choose sides in a policy debate, this Court must apply the statute as written and as informed by the longstanding default rule regarding the standard of proof.” 

What is the practical effect of this decision?  For multi-state employers with locations in the Fourth Circuit (Maryland, Virginia, West Virginia, North Carolina, and South Carolina), it is a game changer in terms of an employer’s burden to prove overtime exemptions.  But even for those of us already subject to the preponderance of the evidence standard, it is a welcome confirmation and one less thing for us to worry about.

The decision is E.M.D. Sales, Inc., et al. v. Carrera and it’s available here

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Jennifer Shaw Founder
Jennifer Shaw is the founder of Shaw Law Group, and a 2019 recipient of the Sacramento Business Journal’s “Women Who Mean Business” award. A well-respected expert in employment law for more than 25 years, employers regularly rely on Jennifer to counsel them on a broad range of employment law issues. Jennifer’s practical advice covers subjects such as wage-hour compliance, anti-discrimination and harassment policies and procedures, reasonable accommodation/leave of absence issues, and hiring/separation processes. She is a trusted advisor to in-house counsel, HR professionals, and leadership across a broad spectrum of public sector and private sector employers.
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