The U.S. Supreme Court has handed down a decision in EMD Sales Inc. v. Carrera that could significantly impact workers seeking to challenge employer misclassification under the Fair Labor Standards Act (FLSA). In a unanimous opinion, the Court ruled that employers need only meet the “preponderance of the evidence” standard—showing it is more likely than not that an exemption applies—to classify employees as exempt from overtime and minimum wage protections.

This decision rejected the stricter “clear and convincing evidence” standard previously applied by the Fourth Circuit, a move that simplifies the burden on employers while potentially making it harder for workers to prevail in disputes over overtime and wage rights.

The Case and Its Implications

The case centered on three sales representatives who alleged that EMD Sales misclassified them as exempt from overtime pay under the FLSA. The district court originally sided with the employees, requiring the employer to meet a higher “clear and convincing evidence” standard to prove the classification was correct. However, the Supreme Court overturned this ruling, adopting the “preponderance of the evidence” standard.

Justice Brett Kavanaugh, writing for the Court, reasoned that the default evidentiary standard in civil litigation is “preponderance of the evidence” unless a statute or constitutional provision explicitly requires a stricter standard. The ruling aligns FLSA disputes with most other civil cases but eliminates an important safeguard for workers in the Fourth Circuit and potentially beyond.

Key Concerns for Employees

Reduced Protection in Misclassification Disputes: By lowering the evidentiary bar for employers, this decision may make it more difficult for workers to challenge improper classifications as exempt from overtime or minimum wage protections.
Undermining Worker Protections: The Court dismissed employee arguments that a heightened standard is necessary to balance the inherent power disparity in workplace disputes. Justice Kavanaugh emphasized that the FLSA reflects a balance of competing interests, a perspective that some worker advocates believe overlooks the statute’s purpose of protecting vulnerable employees.
Increased Risk of Misclassification: Without the heightened evidentiary standard, some advocates fear that employers may feel less pressure to ensure compliance with the FLSA’s classification criteria, potentially leading to more cases of misclassification.
State Law Safeguards Are Still Critical: Workers should be aware that many states impose additional requirements for overtime exemptions. While this ruling applies a uniform federal standard, state laws may offer stronger protections, such as higher salary thresholds or stricter duties tests.

What This Means for Workers

While the Carrera decision simplifies the evidentiary standard for employers, it underscores the need for employees to remain vigilant about their rights under the FLSA. Misclassification as exempt can deprive workers of overtime pay and minimum wage protections, critical safeguards for ensuring fair treatment in the workplace.

For employees questioning their classification, it is essential to understand the requirements of the FLSA and applicable state laws. Workers should focus on whether their job duties and pay align with the criteria for exemptions and seek legal advice if discrepancies arise.

The Supreme Court’s decision may shift the balance in FLSA disputes by making it easier for employers to prove exemptions. However, this ruling does not diminish the importance of the FLSA’s protections, nor does it absolve employers from compliance with state and federal standards. For workers, the case highlights the need to remain informed and proactive about their rights.

Employee advocates and legal experts are likely to scrutinize the impact of this decision in the months to come. While the ruling has established a uniform evidentiary standard across federal circuits, the broader implications for workers’ rights in wage and hour disputes remain a pressing concern.