The U.S. Supreme Court seemed prepared on Nov. 5 to reject an enhanced standard of proof for employers to demonstrate that federal law does not require they pay workers overtime.

The justices heard oral arguments in the case known as E.M.D. Sales Inc. v. Carrera.

The federal Fair Labor Standards Act (FLSA), which covers more than 140 million workers, guarantees eligible employees a minimum wage and overtime pay, but contains 34 exemptions from those mandates. Employers do not have to pay overtime to executives, agricultural workers, or outside salesmen.

The legal issue here is whether employers must prove the applicability of an FLSA exemption on a preponderance of the evidence, as six federal courts of appeal have held, or by the tougher clear-and-convincing-evidence standard, as only the U.S. Court of Appeals for the Fourth Circuit has held.

The preponderance of evidence is the usual standard of proof in civil lawsuits. It requires a side to prove that something is more likely than not.

The petitioner, E.M.D. Sales, distributes Asian, Caribbean, and Latin American foods to grocery stores in and around the nation’s capital.

Three sales representatives sued the company, arguing that they should receive overtime pay because they routinely worked 60 hours per week.

But the company argued they were outside salesmen who don’t legally qualify for overtime pay, which normally kicks in at the 40-hour mark. Because their primary duty involved selling and they generally worked outside of the company’s office, they were exempt from the FLSA’s overtime pay requirement.

The salesmen testified that the company assigns each of its sales representatives a sales route that includes chain stores and independent stores.

They are not paid an hourly wage. Instead, under collective bargaining agreements negotiated by the company and a trade union, the sales representatives’ compensation consists entirely of commissions on sales of the company’s products.

The salesmen acknowledged they spend most of their time outside of the company’s main office serving stores along their routes but disputed the company’s claim that their primary responsibility is making sales. They said they’re also responsible for inventory management tasks such as re-stocking and providing credits to stores for removed items.

U.S. District Court Judge James Bredar of Maryland rejected the company’s position in 2019, ruling the salesmen were entitled to damages because the company “failed to demonstrate good faith or reasonable grounds for believing that their conduct was in accordance with the FLSA.”

E.M.D. Sales appealed to the Fourth Circuit, which in July 2023 reversed, finding the tougher clear-and-convincing-evidence standard applied.

The attorney for E.M.D. Sales, Lisa Blatt of Williams and Connolly in Washington, urged the justices at oral argument on Nov. 5 to reject the more demanding standard.

“For over a century, this Court has held that the default standard in civil cases is preponderance of the evidence. That default rule should resolve this case,” she said.

“Nothing in the text of [FLSA] suggests that Congress intended a clear and convincing evidence standard to apply to the 34 exemptions” specified in the act.

In other words, she argued employers need only demonstrate employees were more likely than not exempt from the overtime rule.

Justice Clarence Thomas asked Blatt if “other than in the context of actual malice,” she could think of any other case in which the Supreme Court has insisted on the clear-and-convincing standard.

Blatt said the court required it only in water rights cases and in cases between sovereign governments.

Chief Justice John Roberts questioned how the court could decide whether the heightened standard was needed when there is a “disparity [in] … bargaining power between the people who are seeking the wage and the employer.”

Blatt replied that there are “plenty of cases in the labor context, [National Labor Relations Act], [Occupational Safety and Health Act] – all those arguments could be made, and the preponderance standard has always governed.”

Justice Brett Kavanaugh said, “Are you saying we should never expand the category of where we’ve done clear-and-convincing?”

Blatt replied, “yeah.”

U.S. Justice Department attorney Aimee Brown argued that because the FLSA does not stipulate a standard of proof, the preponderance standard must be used.

“The court has only departed from that default in a tiny number of cases, where the Constitution required it or in cases involving a significant deprivation, more dramatic than money damages, like deportation, denaturalization, and expatriation,” she said.

The attorney for the salesmen, Lauren Bateman of Public Citizen, said that while neither the FLSA nor the U.S. Constitution specify what standard of proof should apply to a factual determination, what standard applies “is a question traditionally left to the judiciary.”

Here the clear-and-convincing standard is needed “to carry out the explicit public purpose of the Fair Labor Standards Act,” which is to improve labor conditions.

After Bateman acknowledged preponderance standard applies in discrimination cases, Thomas asked why FLSA should “be treated more advantageously than the discrimination cases?”

The Supreme Court is expected to rule on the case by June 2025.

This article by Matthew Vadum appeared Nov. 5, 2024, in The Epoch Times.