On January 15, 2025, the U.S. Supreme Court issued a unanimous opinion in E.M.D. Sales Inc. et al. v. Carrera et al. holding that the employer’s burden of proof for exemptions under the Fair Labor Standards Act (“FLSA”) is a preponderance of the evidence.  In a suit alleging unpaid minimum wage or unpaid overtime, employers can raise the affirmative defense that the employee is exempt from overtime under the FLSA.  The employer has the burden of proof to show the employee is exempt.  Until now, most of the federal circuit courts applied the preponderance of the evidence standard, but the Fourth Circuit applied the higher clear and convincing standard.  This case ended the circuit split and rejected the Fourth Circuit’s diverging precedent.

Justice Kavanaugh’s opinion stresses that the “public interest” in FLSA cases “does not fall entirely on the side of employees” and that the FLSA reflects a “balance of competing interests” between employees and employers.  He also rejected the argument that a heightened standard should apply since some rights under the FLSA are not waivable.

The opinion further noted that the clear and convincing evidence standard is not the usual standard for civil litigation.  The clear and convincing standard is typically reserved for cases in which the controlling statute specifies that standard, cases that raise a constitutional issue, or cases that involve a government taking.  Along those lines, routine employment cases such as discrimination or FLSA cases do not rise to that level and are subject to the normal preponderance of the evidence standard.

This case follows the Supreme Court’s 2018 holding in Encino Motorcars v. Navarro, which rejected lower courts’ common practice of construing the FLSA exemptions narrowly, and ordered courts to give the FLSA exemptions a “fair reading.”  584 U.S. 79, 89 (2018).

For most businesses, the E.M.D Sales Inc. decision should not alter their FLSA classification strategy.  If you have questions about this case, FLSA classifications, and/or FLSA exemptions, please reach out to a Kullman Law attorney for assistance.