E.M.D. Sales, Inc. v. Carrera

E.M.D. Sales, Inc., a food distributor, classified certain sales representatives as exempt from overtime pay under the Fair Labor Standards Act's outside-sales exemption. Faustino Sanchez Carrera and other employees sued in federal court in Maryland for unpaid overtime. The district court found the exemption did not apply and awarded damages. The Fourth Circuit affirmed, holding that employers must prove FLSA exemptions by clear and convincing evidence. The Supreme Court granted review to resolve a circuit split on the standard of proof. In a unanimous opinion delivered by Justice Kavanaugh on January 15, 2025, the Court reversed, ruling that the ordinary preponderance-of-the-evidence standard applies to FLSA exemption claims because the statute does not impose a heightened standard. The case was remanded for further proceedings consistent with that ruling.

The U.S. Supreme Court reversed the Fourth Circuit and held unanimously that the preponderance-of-the-evidence standard applies to FLSA exemption claims, rejecting any heightened clear-and-convincing requirement.

Whether an employer claiming an exemption from overtime pay under the Fair Labor Standards Act must prove the exemption by clear and convincing evidence or by the lower preponderance-of-the-evidence standard.

The ruling lowers the evidentiary burden on employers in FLSA overtime exemption disputes, potentially making it easier for businesses to classify workers as exempt and reducing overtime pay recovery for some employees. It resolves a longstanding circuit split and provides uniform national guidance on wage and hour litigation.