Photo Credit: What it takes to move up as a sales representative, Career Builder, https://www.careerbuilder.com/advice/blog/what-it-takes-to-move-up-as-a-sales-representative.
Authored by: Taylor A. Franklin
In 1938, Congress passed the Fair Labor Standards Act (FLSA), which was signed into law by President Franklin Roosevelt.[1] FLSA establishes minimum wage and overtime pay.[2] FLSA establishes the requirements for exemptions from the minimum wage and maximum hour requirements.[3] FLSA requires employers to meet the minimum wage maximum hour requirements unless the employee is an executive, professional, or computer and outside sales employee.[4] FLSA generally requires overtime pay when a covered employee works more than 40 hours per week.[5] However, Congress recognized that a minimum wage and overtime pay would be impractical or inappropriate for some jobs.[6] Therefore, FLSA exempts various types of employees from the minimum-wage requirement and the overtime-pay requirement.[7] An employer alleged of violating 29 USC § 207 has the burden to show that an exemption applies.[8] Employers alleging that their employee falls under the “outside salesmen” position must prove that their job is to primarily make sales and regularly work away from the employer’s place of business. [9]
In E.M.D. Sales, Inc. v. Carrera, a group of three EMD sales representatives sued E.M.D. Sales (“EMD”) for failing to pay them overtime under the FLSA.[10] The sales representatives were all assigned to service a “route” of stores.[11] EMD, a Latin American, Caribbean, and Asian food product distributor delivers directly to chain and independent grocery stores.[12] These representatives were responsible for traveling their routes and providing supplementary services – spending most of their time working out of the office.[13] Each representative completed “inventory management” tasks which consisted of replenishing depleted products, removing damaged or expired items from the shelves, issuing credits to stores for the removed items, and submitting orders for additional EMD products.[14] Although both parties agreed that servicing chain stores was at least half of the sales representatives’ jobs, the district court found that the plaintiffs spent most of their time at those stores, emphasizing that the division of labor matters.[15] Both sides strongly disputed this, as plaintiffs could make some sales to independent stores, but time spent at chain stores, where product selection was determined by corporate buyers and EMD management, meant fewer sales opportunities and thus less commission.[16] The sales representatives worked approximately 60 hours per week, earning compensation on a commission basis.[17] EMD did not pay them hourly or provide overtime compensation.[18] The sales representatives filed suit because they were denied that wage.[19]
While EMD did not dispute the hours worked without overtime pay, they argued that they were not liable for overtime compensation because the sales representatives’ positions qualified for the “outside salesmen” exemption under 29 U. S. C. §207(a)(1).[20] However, the United States District Court for the District of Maryland found for the group of sales representatives and held EMD liable because they did not prove that they were exempt by “clear and convincing evidence” that the employees were outside salesmen.[21] After the district court ruling, EMD appealed to the Fourth Circuit arguing that the district court used the wrong standard and should have applied the preponderance of the evidence standard.[22] The Fourth Circuit held that the district court applied the correct standard and affirmed their judgment.[23] EMD subsequently appealed the decision to the Supreme Court.[24]
The Supreme Court resolved the circuit split and emphasized that, when Congress enacted the Fair Labor Standards Act in 1938, the preponderance of the evidence standard was established as the default standard of proof in civil proceedings.[25] The Court further noted that the preponderance standard allows both parties in a typical civil action to “share the risk of error in roughly equal fashion.”[26] However, the Court may require a heightened standard of proof if: (1) a provision of the US Code or Congress uses a term with a settled common law meaning requires it, (2) the Constitution requires it, or (3) the government seeks to take “unusual coercive action” against an individual.[27] The Court concluded that the default preponderance of the evidence standard applies when an employer seeks to prove that an employee is exempt from the Fair Labor Standards Act and none of the aforementioned criteria apply.[28]
Although the employees argued that the clear and convincing standard should apply because the FLSA prioritizes the public’s interest in a well-functioning economy in which workers are guaranteed a fair wage, the Court was unconvinced.[29] The Court determined that the legislation should be enforced as intended with the traditional default standard of evidence because the FLSA reflects a balancing of competing interests.[30] Additionally, the employees argued that the FLSA’s minimum wage and overtime pay rights are not waivable and therefore separate from other rights subject to a preponderance threshold; nevertheless, the Court stated that the waivability of a right does not affect the applicable standard of proof.[31] Finally, the Court rejected the contention that FLSA lawsuits require a higher threshold due to the employer’s control over evidence and the possibility of low income for plaintiffs.[32] Therefore, the Court held that the preponderance-of-the-evidence standard applies when an employer seeks to prove an employee is exempt from the minimum wage and overtime provisions of the FLSA, and remanded the case for further proceedings consistent with their decision.[33]
Several organizations filed amicus briefs in support of the petitioners, arguing that the standard of proof should be preponderance of the evidence, consistent with established precedent, rather than the higher clear and convincing standard.[34] For example, the National Association of Wholesaler-Distributors and International Foodservice Distributors Association strongly pushed for this position as outside salespeople play a unique role in today’s businesses.[35] Similarly, the National Federation of Independent Business also filed an amicus brief discussing the disproportional impact on small businesses.[36] The Court’s decision provides more uniformity for enforcing the statute by clarifying that the preponderance of the evidence standard applies for employers proving their burden that an employee is exempt from the FLSA provisions on minimum wage and overtime pay.[37] Although there were concerns that EMD Sales, Inc. v. Carrera would make it difficult for employers to prove exemptions, increasing the risk of costly litigation[38] and the likelihood of forum shopping,[39] the Court’s decision resolved these concerns. The decision now ensures that the burden of proof for FLSA exemption claims reflects a balanced interest between employers and employees.
[1] E.M.D. Sales Inc. v. Carrera, 604 U.S. 45, 47 (2025).
[2] Id.
[3] Id.
[4] U.S. Dep’t of Labor, Fact Sheet #17A: Overtime Pay Requirements of the Fair Labor Standards Act (FLSA) (2008).
[5] 29 U.S.C. § 207(a)(1).
[6] E.M.D. Sales Inc., 604 U.S. at 2.
[7] See 29 U.S.C. §§ 213(a)-(b).
[8] E.M.D. Sales Inc., 604 U.S. at 48; Corning Glass Works v. Brennan, 417 U.S. 188, 196-97 (1974).
[9] 29 C.F.R. § 541.500(a); E.M.D. Sales Inc., 604 U.S. at 48; Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 148 (2012).
[10] Carrera v. E.M.D. Sales Inc., 75 F.4th 345, 347 (4th Cir. 2023).
[11] See id. at 349.
[12] Id.
[13] Id.
[14] Id.
[15] See id.
[16] Carrera, 75 F.4th at 349.
[17] See id.
[18] Id.
[19] Id. at 350.
[20] Id.
[21] Id.
[22] Carrera, 75 F.4th at 350.
[23] Id.
[24] E.M.D. Sales Inc., 604 U.S. at 49.
[25] Id.
[26] Id. at 50.
[27] Id. at 50-51.
[28] Id. at 52.
[29] Id.
[30] E.M.D. Sales Inc., 604 U.S. at 53.
[31] Id.
[32] See id. at 53-54 (“But in Title VII cases too, employers control ‘most of the cards,’ and plaintiffs may be low-income.”). (quoting Murray v. UBS Securities, LLC, 601 U.S. 23, 36 (2024)).
[33] Id. at 54.
[34] E.g., Brief for The United States as Amici Curiae Supporting Petitioners, E.M.D. Sales Inc. v. Carrera, 604 U.S. 45 (2025) (No. 23-217).
[35] Brief for National Association of Wholesaler-distributors and International Foodservice Distributors Association as Amici Curiae Supporting Petitioners, E.M.D. Sales Inc. v. Carrera, 604 U.S. 45 (2025) (No. 23-217).
[36] Brief for the Chamber of Commerce of the United States of America, et al. as Amici Curiae Supporting Petitioners, E.M.D. Sales Inc. v. Carrera, 604 U.S. 45 (2025) (No. 23-217).
[37] See E.M.D. Sales Inc., 604 U.S. at 54.
[38] Rachel Mackey, NACo Legal Advocacy: EMD Sales, Inc. v. Carrera, National Association of Counties (Aug. 6, 2024) https://www.naco.org/news/naco-legal-advocacy-emd-sales-inc-v-carrera.
[39] Jon O. Shimabukuro, FLSA Exemptions and Burdens of Proof: E.M.D. Sales, Inc. v. Carrera, Congressional Research Service (2024), https://www.everycrsreport.com/files/2024-10-31_LSB11243_003d32f4b96da1cb41815de3d54d1a891c95f8b3.pdf.
American Journal of Trial Advocacy 