On January 15, 2025, the U.S. Supreme Court issued its unanimous decision in E.M.D. Sales, Inc. v. Carrera, authored by Justice Kavanaugh, and held FLSA exemptions should be analyzed under the "preponderance of the evidence" standard, rather than the higher “clear and convincing evidence” standard applied by the Fourth Circuit, which hears appeals from the federal district courts in Maryland, North Carolina, South Carolina, Virginia, and West Virginia, and from federal administrative agencies.
EMD is a food distributor which employs sales representatives to manage inventory and take orders at grocery stores that stock EMD’s products. Several of those sales representatives filed a collective action against EMD, alleging the company violated the Fair Labor Standards Act (“FLSA”) by failing to pay them overtime. EMD argued the sales representatives were exempt from the FLSA’s overtime-pay requirement under the outside sales exemption. For that exemption to apply, EMD had to prove: (i) the employees’ main duty involved making sales or obtaining orders and contracts for service, and (ii) they were “customarily and regularly engaged away from the employer’s place or places of business in performing such primary duty,” according to FLSA regulations.
After a bench trial, the District Court found EMD liable for unpaid overtime because the company did not prove by “clear and convincing evidence”—i.e., that it is “highly probable”—that its sales representatives were outside...
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