01-21-2025
Three sales representatives sued a Washington, D.C. employer for misclassifying their positions and denying them overtime pay in violation of the Fair Labor Standards Act (FLSA). The FLSA governs minimum wages, overtime exemptions, and child labor standards. FLSA includes approximately thirty-four exemptions from its overtime pay requirements.
The Maryland District Court ruled in the plaintiffs’ favor, finding the employer did not establish by “clear and convincing” evidence that these employees were exempt from FLSA’s overtime requirements. The Fourth Circuit Court of Appeal affirmed the lower court’s decision, using the same standard. The Fifth, Sixth, Seventh, Ninth, Tenth, and Eleventh had previously applied the “preponderance of the evidence” standard when evaluating whether an employer had properly classified an employee. The Fourth Circuit decision created a split among the circuits.
The U.S. Supreme Court issued a unanimous decision on the standard for evaluating FLSA claims. It held that the “preponderance of the evidence” standard applies to decisions on the applicability of FLSA exemptions. It stated that the default standard of proof in civil litigation is the “preponderance of the evidence.” Per the Court’s decision, “clear and convincing evidence” is intended for three discrete situations: 1) when required by statute, 2) when required by the Constitution, or 3) when the issue involves significant government action (like citizenship revocation). Because FLSA does not specify the standard of proof, courts typically conclude that the preponderance standard should be used. It is the same standard used in other employment statutes like Title VII and the NLRA. Thus, employers must show by a preponderance of the evidence that their employees met an exemption outlined in the statute.