In E.M.D. Sales v. Carrera, the Court unanimously ruled that employers only need to meet the preponderance of the evidence standard—not the heightened clear-and-convincing standard—when proving that an employee is exempt from the FLSA's overtime requirements.
Here's a quick primer on these two standards:
⚖️ Preponderance of the Evidence: The standard used in most civil cases. It means the evidence shows something is more likely than not (think 51% certainty).
⚖️ Clear and Convincing Evidence: A higher standard that requires the evidence to be highly and substantially more likely to be true than false (think closer to 75% certainty).
Here's what this case means for employers in practice. By rejecting the heightened clear-and-convincing standard, the Court made it easier for employers to prove exemptions like the administrative or outside sales exemptions under the FLSA. With a less stringent burden, employers may feel more confident contesting overtime disputes, instead of caving and settling claims out of fear of suffering a bad result.
This case is a huge win for employers. It provides much-needed relief for businesses from the extortive effects of FLSA collective actions, where the risk of massive penalties and legal fees often forced settlements regardless of the merits. The playing field is now just more level.