E.M.D. Sales, Inc. v. Carrera: Clarifying Employers’ Burden of Proof for Exempt Status under the Fair Labor Standards Act
The Fair Labor Standards Act of 1938 (“FLSA”) requires employers to pay non-exempt employees minimum wage and overtime compensation or face steep penalties. However, those minimum wage and overtime requirements do not apply to exempt employees. Exempt employees can “range from baseball players to seamen to maple-syrup processors to software engineers to firefighters, and so on.”[1] The employer bears the burden of proof to show that an employee is exempt. Whether an employee is indeed exempt can be complex—and for that reason is often litigated. It is also highly consequential because liability flows directly from treating non-exempt employees as exempt.
Until recently, the federal appellate courts were split on what standard of proof an employer must meet to show that employees are exempt. All but one federal circuit court used the preponderance of evidence standard, which only requires the employer to show it is more likely than not that the employees are exempt.[2] But the U.S. Court of Appeals for the Fourth Circuit (“Fourth Circuit”) used the far more stringent and demanding clear and convincing evidence standard, which required employers to produce “clear and convincing evidence” that the employee was exempt.[3]
In E.M.D. Sales, Inc. v. Carrera, announced during the OT 2025 term, the Supreme Court of the United States resolved the circuit split and provided much needed clarity.[4] The Court unanimously held that “[t]he preponderance-of-the-evidence standard governs when an employer attempts to demonstrate that an employee is exempt.”[5] This ruling is beneficial to employers because they only need to show that it is more likely than not that an employee is exempt to avoid liability under the FLSA. The ruling also standardizes the burden of proof for all employers across the United States—which is particularly helpful and important for employers operating in multiple jurisdictions.
Whether an employee is exempt or non-exempt can often be a difficult question that requires significant legal and factual analysis. Importantly, E.M.D. Sales affirms that preponderance of the evidence is the default standard across the board in federal civil lawsuits.
Dave Dorey of Liff, Walsh & Simmons is the Firm’s Head of the Labor and Employment Practice and has years of experience advising both business entities and individuals on their rights and obligations under federal and state labor and employment laws.[6] Dave can help employers review the FLSA status of their employees, assist in developing compliant workplace policies and practices, and address lawsuits by employees claiming misclassification under the FLSA.
Liff, Walsh and Simmons’ Labor and Employment Group continually tracks labor and employment developments that may impact you or your business. For questions please contact Dave Dorey, partner and head of the Group.
This alert provides general information and is not a full analysis of the matters discussed. It may not be relied on as legal advice. Dave Dorey, a Liff, Walsh & Simmons partner licensed to practice law in Maryland, the District of Columbia, Virginia, and California, contributed to the content of this alert.
[1] E.M.D. Sales, Inc. v. Carrera, 604 U.S. 45, 48 (2025).
[2] Id. at 47. (“The usual standard of proof in civil litigation is preponderance of the evidence.”); see also Legal Information Institute, Preponderance of the Evidence Corn. L. Sch. https://www.law.cornell.edu/wex/preponderance_of_the_evidence (accessed July 1, 2025) (“[T]he burden of proof is met when the party with the burden convinces the fact finder that there is a greater than 50% chance that the claim is true.”).
[3] “A more demanding standard, such as clear and convincing evidence, applies only when a statute or the Constitution requires a heightened standard or in certain other rare cases, such as ‘when the government seeks to take unusual coercive action—action more dramatic than entering an award of money damages or other conventional relief—against an individual.’” Id. (quoting Price Waterhouse v. Hopkins, 490 U.S. 228, 253 (1989). Maryland is within the jurisdiction of the Fourth Circuit, and thus, this standard was applicable in the State of Maryland; see also Legal Information Institute, Clear and Convincing Evidence, CORN. L. SCH. https://www.law.cornell.edu/wex/clear_and_convincing_evidence (accessed July 7, 2025) (“‘clear and convincing’ means that the evidence is highly and substantially more likely to be true than untrue. In other words, the fact finder must be convinced that the contention is highly probable.”).
[4] Id.
[5] Id.
[6] Dave is admitted to practice in a variety of federal courts, and the District of Columbia, Maryland, Virginia, and California.
