What is an employer’s burden of proof to establish an employee is properly exempted under Fair Labor Standards Act (FLSA) regulations? Up until now, federal jurisdictions have been split on the applicable burden. While most federal jurisdictions required a “preponderance of the evidence,” the Fourth Circuit applied a more onerous “clear and convincing evidence” standard.
In EMD Sales Inc. v. Carrera, the United State Supreme Court unanimously agreed employers must only show by a preponderance of the evidence that a FLSA exemption is applicable. In this case, sales representatives employed by defendant EMD Sales Inc., a food distributor, alleged they had been improperly exempted from FLSA overtime rules. In finding for the employees, lower courts concluded the EMD had failed to show by “clear convincing evidence” that the employees qualified under the FLSA overtime exemption for outside salesmen. EMD appealed, and the case ultimately was heard by the U.S. Supreme Court.
In its decision, the Supreme Court disagreed with the Fourth Circuit, finding that a preponderance-of-the-evidence standard is the default burden of proof applied in civil matters. A heightened standard may only apply in civil matters under limited circumstances where:
- The statute establishes a higher burden;
- The Constitution requires a heightened standard of proof, such as certain First Amendment and Due Process matters; and
- Unusual cases where the government “seeks to take unusual coercive actions” that are “more dramatic” than money damages or other traditional types of relief.
The Court concluded that as the FLSA is silent regarding the applicable standard of proof, the default standard of “preponderance of the evidence” is the general rule. Further, FLSA does not trigger any other currently recognized exceptions as there are no constitutional rights implicated and no unusual coercive action being taken by the government.
In addressing the employees’ allegations, the Court found that other similar statutes providing workplace protections also apply a preponderance-of-the-evidence standard and policy would not dictate a different and more heightened standard be applied to FLSA.
Why is this important to employers? It provides consistency in how Courts will evaluate disputes over FLSA exemptions, and the level of proof required from employers to establish exemptions are appropriate. It will still be necessary for employers to prove that employees meet the requirements for a FLSA exemption, but both parties in the dispute will now be on equal footing. If you or your organization need assistance navigating FLSA and its many exemptions, contact Wiley Reber Law, for legal advice that works.