Justices to Weigh Overtime Proof Threshold During Court Session

The US Supreme Court is poised to consider a Biden administration-backed effort to rein in a rogue appeals court that broke from the pack and used a worker-friendly legal standard in an overtime case.

The justices will hear oral argument Tuesday in food distributor E.M.D. Sales Inc.’s challenge to a US Court of Appeals for the Fourth Circuit ruling that employers must present “clear and convincing evidence” that certain workers aren’t covered by the Fair Labor Standards Act’s overtime protections.

The US Justice Department will appear alongside the company to argue that the Fourth Circuit was wrong to split from six other federal circuits that use the less stringent “preponderance of evidence” standard for employers to prove they properly classified workers as exempt from overtime.

Although the burden of proof for FLSA exemptions is a narrow legal issue, workers’ status as exempt or non-exempt can be the key determination in many overtime cases, said Laura O’Donnell, a management-side attorney who leads Haynes and Boone LLP’s wage and hour practice.

An employer’s liability for overtime pay often turns on whether the employer was right to apply one of the 34 FLSA exemptions to the plaintiffs, she said.

E.M.D. Sales workers, for example, were owed overtime pay for their work over 40 hours because a district judge found that the company failed to prove, by clear and convincing evidence, that they fell under the exemption for outside sales representatives. The other key facts—the employees working more than 40 hours and not getting paid time-and-a-half for those overtime hours—were undisputed.

But E.M.D. Sales seemingly would have lost even if the district judge applied the less stringent preponderance-of-evidence standard, as he held that the company lacked “objectively reasonable grounds” for believing their workers were covered by the outside sales exemption.

Asymmetrical Support

Despite the burden of proof apparently not mattering to the outcome of its case, E.M.D. Sales fought the requirement that employers present clear and convincing evidence for an FLSA exemption all the way to the highest court in the land. The company hired top-tier Supreme Court litigator Lisa Blatt of Williams & Connolly LLP to argue before the justices.

The Biden administration has backed E.M.D. Sales in a significant way. The solicitor general’s office originally advised the court to summarily reverse the Fourth Circuit. Assistant to the Solicitor General Aimee Brown will appear in support of the company on Tuesday.

Beyond the Biden administration’s aid, E.M.D. Sales has also received the backing of the US Chamber of Commerce, the National Association of Wholesaler-Distributors, the Washington Legal Foundation, and a mix of other trade groups and conservative organizations.

While E.M.D. Sales can point to six amicus briefs supporting its view, the workers didn’t receive any outside briefs backing their position.

“The outcome in the Supreme Court seems pre-ordained,” said Douglas Werman, a plaintiffs’ attorney who focuses on wage-and-hour issues at Werman Salas PC.

Lawyers representing workers have been operating on the basis that that the preponderance-of-the-evidence standard applies to FLSA exemptions, so a likely Supreme Court decision adopting that evidentiary threshold would have little impact outside the Fourth Circuit, Werman said.

Blatt, who represents E.M.D. Sales, and Lauren Bateman of Public Citizen Litigation Group, who represents the workers, didn’t respond to requests for comment.

The case is E.M.D. Sales Inc. v. Carrera, U.S., No. 23-217, oral argument scheduled 11/5/24.