E.M.D. Sales, Inc. v. Carrera

• Court: U.S. Supreme Court
• Writing for the Court: Justice KAVANAUGH
• Citation: E.M.D. Sales, Inc. v. Carrera, 145 S.Ct. 34, 220 L.Ed.2d 309 (2025)
• Docket Number: 23-217
• Decision Date: 15 January 2025
• Parties: E.M.D. SALES, INC., et al., Petitioners v. Faustino Sanchez CARRERA, et al.
• topic: Employment Law,Civil Procedure

145 S.Ct. 34

220 L.Ed.2d 309

E.M.D. SALES, INC., et al., Petitioners v. Faustino Sanchez CARRERA, et al.

No. 23-217

Supreme Court of the United States

Argued November 5, 2024

Decided January 15, 2025

Eduardo S. Garcia, Jeffrey M. Schwaber, Stein Sperling Bennett, De Jong Driscoll PC, Rockville, MD, Lisa S. Blatt, Counsel of Record, Sarah M. Harris, Aaron Z. Roper, Ian M. Swenson, Williams & Connolly LLP, Washington, for Petitioners.

Omar Vincent Melehy, Suvtta Melehy, Andrew Balashov, Melehy & Associates LLC, Silver Spring, MD, Lauren E. Bateman, Counsel of Record, Allison M. Zleve, Public Citizen, Litigation Group, Washington, DC, for Respondents.

Justice KAVANAUGH delivered the opinion of the Court.

The Fair Labor Standards Act of 1938 requires employers to pay their employees a minimum wage and overtime compensation. But the Act also exempts many categories of employees from the minimum-wage and overtime-compensation requirements. The dispute here concerns the standard of proof that an employer must satisfy to show that an employee is exempt. The usual standard of proof in civil litigation is preponderance of the evidence. 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." Price Waterhouse v. Hopkins, 490 U.S. 228, 253, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989) (plurality opinion). None of those exceptions applies to this case. Therefore, the preponderance-of-the-evidence standard governs when an employer attempts to demonstrate that an employee is exempt.

I

A

In 1938, Congress passed and President Franklin Roosevelt signed the Fair Labor Standards Act. 52 Stat. 1060. The Act guarantees covered workers a federal minimum wage. See 29 U.S.C. § 206(a)(1). The Act also generally requires overtime pay when a covered employee works more than 40 hours per week. See § 207(a)(1).

But Congress recognized that a minimum wage and overtime pay would be impractical or inappropriate for some jobs. So the Act exempts many categories of employees from the minimum-wage requirement and exempts many more from the overtime-pay requirement. See §§ 213(a)-(b). Exempt employees can range from baseball players to seamen to maple-syrup processors to software engineers to firefighters, and so on. See §§ 213(a)(12), (17), (19), (b)(15), (20). The law places the burden on the employer to show that an exemption applies. See Corning Glass Works v. Brennan, 417 U.S. 188, 196-197, 94 S.Ct. 2223, 41 L.Ed.2d 1 (1974).

The exemption relevant here encompasses anyone employed "in the capacity of outside salesman." § 213(a)(1). An "outside salesman" primarily makes sales and regularly works away from the employer's place of business. See Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 148, 132 S.Ct. 2156, 183 L.Ed.2d 153 (2012); 29 C.F.R. § 541.500(a) (2023).

B

EMD distributes international food products in the Washington, D. C., metropolitan area. EMD employs sales representatives who manage inventory and take orders at grocery stores that stock EMD products.

Several EMD sales representatives sued the company in the U. S. District Court for the District of Maryland. They alleged that EMD violated the Fair Labor Standards Act by failing to pay them overtime. EMD did not deny that the employees worked more than40 hours per week without receiving overtime pay. But EMD argued that the employees fell within the Act's outside-salesman exemption.

Following a bench trial, the District Court concluded that EMD failed to prove "by clear and convincing evidence" that the employees qualified as outside salesmen. Civ. No. 17-3066 (D Md., Mar. 19, 2021), App. to Pet. for Cert. 49a. The court found that the employees primarily executed the terms of sales already made rather than making new sales themselves. The court therefore ordered EMD to pay overtime wages and liquidated damages.

On appeal, EMD contended that the District Court should have applied the less stringent preponderance-of-the-evidence standard rather than the clear-and-convincing-evidence standard. The U. S. Court of Appeals for the Fourth Circuit disagreed and affirmed the judgment of the District Court. 75 F.4th 345 (2023). The Court of Appeals followed Circuit precedent requiring employers to prove the applicability of Fair Labor Standards Act exemptions by clear and convincing evidence. Id., at 351-352. Although the three-judge panel suggested that the full court might want to reconsider that precedent en banc, the court later denied en banc review. Id., at 353.

The Fourth Circuit stands alone in requiring employers to prove the applicability of Fair Labor Standards Act exemptions by clear and convincing evidence. Every other Court of Appeals to address the issue has held that the preponderance standard applies. See Faludi v. U. S. Shale Solutions, L.L.C., 950 F.3d 269, 273 (CA5 2020); Renfro v. Indiana Mich. Power Co., 497 F.3d 573, 576 (CA6 2007); Yi v. Sterling Collision Centers, Inc., 480 F.3d 505, 506-508 (CA7 2007); Coast Van Lines, Inc. v. Armstrong, 167 F.2d 705, 707 (CA9 1948); Lederman v. Frontier Fire Protection, Inc., 685 F.3d 1151, 1158 (CA10 2012); Dybach v. Florida Dept. of Corrections, 942 F.2d 1562, 1566, n. 5 (CA11 1991). This Court granted certiorari to resolve that conflict. 602 U. S. —, 144 S.Ct. 2656, 219 L.Ed.2d 1283 (2024).

II

A

In 1938, when Congress enacted the Fair Labor Standards Act, the established default standard of proof in American civil litigation was the preponderance-of-the-evidence standard. The Court's cases pre-dating the Act recognized as much. See United States v. Regan, 232 U.S. 37, 48, 34 S.Ct. 213, 58 L.Ed. 494 (1914); Lilienthal's Tobacco v. United States, 97 U.S. 237, 266, 24 L.Ed. 901 (1867). As did prominent treatises. See 4 J. Wigmore, Evidence in Trials at Common Law § 2498, pp. 3545-3546 (1905); 3 S. Greenleaf, Law of Evidence § 29, p. 28 (8th ed. 1867).

Since then, the preponderance-of-the-evidence standard has remained the default standard of proof in American civil litigation. That default makes sense: The preponderance standard allows both parties in the mine-run civil case to "share the risk of error in roughly equal fashion." Herman & MacLean v. Huddleston, 459 U.S. 375, 390, 103 S.Ct. 683, 74 L.Ed.2d 548 (1983) (quotation marks omitted).

In civil litigation, this Court hasdeviated from the preponderance standard in three main circumstances.

First, courts must apply a heightened standard of proof if a statute establishes one. For example, various provisions of the U. S. Code, including some involving labor and employment, designate clear and convincing evidence as the applicable standard of proof. See, e.g., 29 U.S.C. § 218c(b)(1) (whistleblower-retaliation claims under the Fair Labor Standards Act); § 464(c) (validity of union-established trusteeships); § 722(a)(3)(A)(ii) (ineligibility for vocational rehabilitation services). The same can be true when Congress uses a term with a settled common-law meaning that itself required a heightened standard of proof. See, e.g., Microsoft Corp. v. i4i L. P., 564 U.S. 91, 102, 131 S.Ct. 2238, 180 L.Ed.2d 131 (2011).

Second, courts likewise must apply a heightened standard of proof when the Constitution requires one. For example, the Court has mandated a clear-and-convincing-evidence standard in certain First Amendment cases. See, e.g., New York Times Co. v. Sullivan, 376 U.S. 254, 285-286, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964); Gertz v. Robert Welch, Inc., 418 U.S. 323, 342, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). The Court has also held that the Due Process Clause necessitates a heightened standard in some cases. In Addington v. Texas, for example, the Court ruled that involuntary civil commitment constitutes such a "significant deprivation of liberty" by the government that "due process requires the state to justify confinement by proof more substantial than a mere preponderance of the evidence." 441 U.S. 418, 425-427, 99 S.Ct. 1804, 60 L.Ed.2d 323 (1979). And in Santosky v. Kramer, the Court held the same with respect to the government's termination of parental rights: "Before a State may sever completely and irrevocably the rights of parents in their natural child, due process requires that the State support its allegations by at least clear and convincing evidence." 455 U.S. 745, 747-748, 102 S.Ct. 1388, 71 L.Ed.2d 599 (1982).

Third, under this Court's precedents, a heightened standard of proof may be appropriate in certain other "uncommon" cases. Price Waterhouse v. Hopkins, 490 U.S. 228, 253, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989) (plurality opinion). These cases "ordinarily" arise "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." Ibid. For example, the Court has held that the government must satisfy a clear-and-convincing-evidence standard in order to take away a person's citizenship. See Nishikawa v. Dulles, 356 U.S. 129, 137-138, 78 S.Ct. 612, 2 L.Ed.2d 659 (1958) (expatriation); Schneiderman v. United States, 320 U.S. 118, 122-123, 63 S.Ct. 1333, 87 L.Ed. 1796 (1943) (denaturalization).

Importantly, the Court has not otherwise used a heightened standard in civil matters. See Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93, 107, 136 S.Ct. 1923, 195 L.Ed.2d 278 (2016) (treble damages under the Patent Act); Grogan v. Garner, 498 U.S. 279, 286-287, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991) (bankruptcy discharges); Herman & MacLean, 459 U.S., at 389-390, 103 S.Ct. 683 (securities fraud); Regan,232 U.S., at 48-49, 34 S.Ct. 213 (civil-penalty suit under the Alien Immigration Act). Most relevant here, the Court has applied a preponderance standard in Title...