Back in June 2024, I wrote about the latest Fair Labor Standards Act (FLSA) currently pending before the U.S. Supreme Court (SCOTUS), this time relating to the standard of proof that a company must show in order to prove that an employee is properly classified as exempt from (and not entitled to) overtime pay. [Read More Here: SCOTUS May Change Standard of Proof for FLSA Misclassification Claims] If the Court rules in favor of the company, E.M.D. Sales, Inc., then it will become more difficult for employees to prove misclassification claims in court.
The Court’s Decision Will Impact How Judges Apply the FLSA Exemptions to Employees’ Cases
On November 4, 2024, the Supreme Court held oral arguments on that case, which is called E.M.D. Sales, Inc. v. Carrera. There, the sales employees sued, claiming that the company had improperly classified them as exempt from overtime pay under the “outside sales” exemption. At trial, the judge ruled that the employees were not covered by the exemption, and therefore they were owed overtime. Because the case took place in the Fourth Circuit, which includes South Carolina, the judge applied the “clear and convincing evidence standard.” Most civil cases apply what’s called a “preponderance of the evidence” standard, which is sometime like “more likely than not,” or even 51% convincing. Criminal cases require proof beyond a reasonable doubt.
But in the Fourth Circuit, courts have typically applied “clear and convincing evidence” only for FLSA cases (and a few other exceptions). This is a higher standard of proof for a company to meet in order to claim that an employee does not get overtime pay. So the question before the Supreme Court is whether that is the proper standard for claims across the U.S., not just in the Fourth Circuit.
The Court’s Questions at Oral Argument about the Standard of Proof
At oral argument, it appears that the Court is leaning in favor of the company, which would result in applying a “preponderance of the evidence” standard to all FLSA exemptions across the board. Several of the conservative justices, such as Alito and Roberts, asked questions about why FLSA cases should have a higher standard of proof than other important types of claims, like violations of the National Labor Relations Act, the Occupational Safety and Health Act, and Title VII of the Civil Rights Act. Arguably those cases concerns rights that are at least as important as those protected under the FLSA, and perhaps even more so (workplace safety and discrimination, for example). Yet the courts apply a lesser standard for those cases than for FLSA cases.
Takeaways for South Carolina employees
Based on the judges’ questions, it would appear that the court seems inclined to rule that the proper standard of proof for FLSA exemption cases is “preponderance of the evidence.” For South Carolina employees, this means that companies will have an easier time claiming that an employee is not entitled to overtime pay. And the ruling would likely apply to all exemptions under the FLSA, not just the outside sales exemption at issue in the Carrera case. We should see a ruling from the Court sometime in Spring 2025.
However, the Fair Labor Standards Act will still provide protection for employees who have been improperly classified as exempt from overtime pay. If you believe you are owed overtime pay or unpaid minimum wage, you can call our office at (854) 233-4351 or reach out to us via our Contact Us page for a review of your legal situation.
