Supreme Court to Weigh in on Legal Test for FLSA Exemptions

The U.S. Supreme Court recently took up a wage and hour case, E.M.D. Sales, Inc. v. Carrera, to clarify a split decision regarding the standard of proof that employers must meet to show that specific employees are exempt from the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA).

The FLSA requires that most U.S. employees are paid at least the federal minimum wage for all hours worked and receive overtime pay for each hour over 40 that they work during the course of a workweek. This remains true unless the employee falls into one or more of the FLSA’s various exemptions.

In these cases, employers bear the burden of proving that employees fall within a particular FLSA exemption. The Supreme Court agreed to hear the Carrera case to clarify the precise burden of proof that employers need to meet to satisfy the burden. The decision for this case is expected in the Spring of 2025. The decision could have nationwide implications for employers in the retail industry especially.

Understanding the Carrera case 

In Carrera, three sales representatives filed a lawsuit alleging their employer violated the FLSA by failing to pay them overtime wages after they worked more than 40 hours in a week. In this case, the employer did not dispute that the sales reps worked for more than 40 hours in a week. Instead, they argued that the sales reps were not entitled to overtime wages because they were exempt under the FLSA’s “outside sales” exemption. After a nine-day bench trial, a district court ruled in favor of the employees, holding that the employer failed to prove the employees fell within the “outside sales” exemption “by clear and convincing evidence.”

On appeal, the 4th U.S. Circuit Court of Appeals affirmed the district court ruling, finding that it applied the correct legal standard. Specifically, the appeals court ruled that under its long-standing precedent, employers have the burden to prove that their employees satisfy the FLSA’s exemptions by “clear and convincing evidence” rather than by the lower standard of proof, “a preponderance of the evidence” standard applied by other circuit courts. In this case, the 4th Circuit acknowledged that its application of the “clear and convincing evidence” standard was at odds with other courts and even suggested the standard may be outdated in light of recent decisions.

The 4th Circuit’s “clear and convincing evidence” standard conflicts with seven other circuit courts, each of which apply the less stringent “preponderance of the evidence standard.” Four of these courts have explicitly rejected the “clear and convincing evidence” standard leaving the 4th Circuit as the only circuit court to require employers to meet this heightened standard. For this reason, the 4th Circuit has received widespread criticism.

The Supreme Court will have to determine which standard applies in these cases. It is quite likely that employers will have to prove that employees are exempt from FLSA rules based on a preponderance of the evidence and not clear and convincing evidence.

Talk to a FLSA Overtime Attorney Today 

Have you been shortchanged by your employer who refuses to pay you overtime? You may be entitled to recover that overtime plus damages. Call the Tampa employment lawyers at Florin Gray today to schedule an appointment, and we can begin investigating your case right away.

Source:

hrdive.com/news/supreme-court-flsa-carrera/731808/