Supreme Court clarifies how management can prove that plaintiff-employees are not entitled to overtime

The Supreme Court is starting to issue rulings for the 2024-2025 term. Cases that were argued in the fall are now being resolved. This one concerns how to interpret the Fair Labor Standards Act. The Court makes it easier for employers to prove that the plaintiff is exempt from overtime.

The case is EMD Sales v. Carrera, issued on January 15. The FLSA guarantees that employees will earn at least the minimum wage. Most employees will also recover overtime pay if they work more than 40 hours per week. Notice I said "most." That's because the FLSA has a zillion exceptions to this rule, depending on the nature of the employee's job. Management workers don't get overtime. Certain professionals don't get overtime. In this case, plaintiffs were sales representatives working for a company that distributes dog food. Plaintiffs sued for unpaid overtime. The trial court said plaintiffs are entitled to overtime because the employer did not prove by clear and convincing evidence that plaintiffs were exempt from the overtime rules (management said plaintiffs were exempt under the outside-salesman exemption. 

The issue for the Supreme Court: is "clear and convincing" the appropriate test, or is it "preponderance of the evidence," a lower burden of proof, which simply means "more likely than not." In contrast, "clear and convincing" is not the same as "proof beyond a reasonable doubt" (the government's burden of proof in criminal cases) but it's somewhere in between 51% more likely and near-certainty.

The Supreme Court has never addressed this issue before. The Fourth Circuit is the only federal appellate court to use the "clear and convincing" test. The rest use the more lenient "preponderance" test, including the Second Circuit. Since the FLSA does not tell us management's  burden of proof, the Court looks to the common-law. While some constitutional cases require a heightened burden of proof in civil cases, such as defamation cases involving public figures and some other "uncommon" cases, such as when the government wants to revoke someone's citizenship, most civil cases use the preponderance test, so the fallback is that test. While the plaintiffs want the Court to employ "clear and convincing" because these cases implicate the public interest, and the employer controls much of the evidence in these cases, these justifications are not enough to deviate from the fallback test, as the preponderance test also applies in Title VII discrimination cases. Title VII and FLSA principles are usually interchangeable.

The case now returns to the district court, for the judge to revisit the issue of plaintiffs' entitlement to overtime under the preponderance burden of proof.