Supreme Court Votes 9–0 to Reject Heightened Proof Standard in Overtime Pay Disputes

Justices of the U.S. Supreme Court pose for their official photo at the Supreme Court in Washington on Oct. 7, 2022. (Front L–R) Justices Sonia Sotomayor and Clarence Thomas, Chief Justice John Roberts, Justice Samuel Alito and Justice Elena Kagan. (Back L–R) Justices Amy Coney Barrett, Neil Gorsuch, Brett Kavanaugh, and Ketanji Brown Jackson. Olivier Douliery/AFP via Getty Images

The U.S. Supreme Court sided with employers, unanimously rejecting employees’ argument that employers have to meet an enhanced standard of proof to show that federal law does not require they provide overtime pay.

Justice Brett Kavanaugh wrote the court’s 9–0 opinion in E.M.D. Sales Inc. v. Carrera that was issued on Jan. 15.

The federal Fair Labor Standards Act (FLSA) guarantees eligible employees a minimum wage and overtime pay, but employers do not have to pay overtime to executives, agricultural workers, or outside salesmen. The burden of proving the exemption falls on employers.

The legal issue here was whether employers must prove an FLSA exemption applies on a preponderance of the evidence, as six federal courts of appeals have held, or by the tougher clear-and-convincing-evidence standard, as only the U.S. Court of Appeals for the Fourth Circuit has held.

The preponderance of evidence, the usual standard of proof in civil lawsuits, requires a side to prove that something is more likely than not.

The petitioner, E.M.D. Sales, distributes Asian, Caribbean, and Latin American foods to grocery stores in and around the nation’s capital.

Three sales representatives sued the company, arguing that they should receive overtime pay because they routinely worked 60 hours per week.

But the company argued they were outside salesmen who don’t legally qualify for overtime pay, which normally kicks in at the 40-hour mark. Because their primary duty involved selling and they generally worked outside of the company’s office, they were exempt from the FLSA’s overtime pay requirement.

The salesmen testified that the company assigns each of its sales representatives a sales route that includes chain stores and independent stores.

They are not paid an hourly wage. Instead, under collective bargaining agreements negotiated by the company and a trade union, the sales representatives’ compensation consists entirely of commissions on sales of the company’s products.

The salesmen acknowledged they spend most of their time outside of the company’s main office serving stores along their routes but disputed the company’s claim that their primary responsibility is making sales. They said they’re also responsible for inventory management tasks such as re-stocking and providing credits to stores for removed items.

U.S. District Court Judge James Bredar of Maryland rejected the company’s argument in 2019, finding the salesmen were entitled to damages because the company “failed to demonstrate good faith or reasonable grounds for believing that their conduct was in accordance with the FLSA.”

E.M.D. Sales appealed to the Fourth Circuit, which in July 2023 affirmed Bredar’s decison, finding the tougher clear-and-convincing-evidence standard applied.

In the Supreme Court’s new opinion, Kavanaugh wrote that the more rigorous standard applies only when the U.S. Constitution or a statute requires it.

It can also apply in rare circumstances such as “when the government seeks to take unusual coercive action—action more dramatic than entering an award of money damages or other conventional relief—against an individual,” he wrote, citing Price Waterhouse v. Hopkins (1989).

“None of those exceptions applies to this case. Therefore, the preponderance-of-the-evidence standard governs when an employer attempts to demonstrate that an employee is exempt.”

Kavanaugh wrote that the Supreme Court rejected the employees’ argument that the Supreme Court “should still affirm [the Fourth Circuit ruling] because they would not qualify as outside salesmen even under a preponderance standard.”

But the high court’s “usual practice is to leave matters of that sort for remand. We see no persuasive reason to stray from that usual practice here.”

The Supreme Court reversed the decision of the Fourth Circuit and sent the case back to that court “for further proceedings consistent with this opinion.”

Justice Neil Gorsuch filed a concurring opinion that Justice Clarence Thomas joined.

The courts must “apply the default standard unless Congress alters it or the Constitution forbids it.”

If the courts were not to do so, they would be taking “sides in a policy debate,” instead of adjudicating, Gorsuch wrote.

The Epoch Times reached out for comment to the company’s attorney, Lisa Blatt of Williams and Connolly in Washington, and the salesmen’s attorneys, Lauren Bateman of Public Citizen in Washington, and Omar Vincent Melehy of Melehy and Associates in Silver Spring, Maryland.

No replies were received by publication time.