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

604 U.S. 45

• Court: Supreme Court of the United States
• Decided: January 15, 2025
• Docket: 23-217
• Status: Published

Opinion

PRELIMINARY PRINT

Volume 604 U. S. Part 1 Pages 45–55

OFFICIAL REPORTS OF

THE SUPREME COURT January 15, 2025

REBECCA A. WOMELDORF reporter of decisions

NOTICE: This preliminary print is subject to formal revision before the bound volume is published. Users are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, pio@supremecourt.gov, of any typographical or other formal errors. OCTOBER TERM, 2024 45

Syllabus

E.M.D. SALES, INC., et al. v. CARRERA et al.

certiorari to the united states court of appeals for the fourth circuit No. 23–217. Argued November 5, 2024—Decided January 15, 2025 In 1938, Congress enacted the Fair Labor Standards Act (FLSA), guaran- teeing a federal minimum wage for covered workers, 29 U. S. C. § 206(a)(1), and requiring overtime pay for those working more than 40 hours per week, § 207(a)(1). Congress exempted many types of employ- ees from the FLSA's overtime-pay requirement, including outside sales- men who primarily work away from their employer's place of business. § 213(a)(1). The law places the burden on the employer to show that an exemption applies. Petitioner EMD distributes food products in the Washington, D. C., area and employs sales representatives who manage inventory and take orders at grocery stores. Several sales representatives sued EMD al- leging that the company violated the FLSA by failing to pay them over- time. EMD argued that the sales representatives were outside sales- men and therefore exempt from the FLSA's overtime-pay requirement. After a bench trial, the District Court found EMD liable for overtime because EMD did not prove by clear and convincing evidence that its sales representatives were outside salesmen. On appeal, EMD ar- gued that the District Court should have used the less stringent preponderance-of-the-evidence standard instead of the clear-and- convincing-evidence standard. Applying Circuit precedent, the Fourth Circuit disagreed and affrmed the District Court's judgment. Held: The preponderance-of-the-evidence standard applies when an em- ployer seeks to demonstrate that an employee is exempt from the minimum-wage and overtime-pay provisions of the FLSA. Pp. 49–54. (a) When Congress enacted the FLSA in 1938, the preponderance-of- the-evidence standard was the default in American civil litigation, and it remains so today. In civil litigation, the Court has deviated from this default standard in three main circumstances. First, if a statute requires a heightened standard of proof, courts must apply it. See, e. g., §§ 218c(b)(1), 464(c). Second, the Constitution can mandate a height- ened standard of proof. See, e. g., New York Times Co. v. Sullivan, 376 U. S. 254; Addington v. Texas, 441 U. S. 418. Third, in certain rare situations involving coercive Government action, such as taking away a person's citizenship, a heightened standard may apply. See, e. g., Nishi- kawa v. Dulles, 356 U. S. 129. But in most civil cases, including employment-discrimination cases under Title VII, the Court has consist- 46 E.M.D. SALES, INC. v. CARRERA

ently applied the preponderance standard. See, e. g., Price Waterhouse v. Hopkins, 490 U. S. 228. Pp. 49–51. (b) The FLSA does not specify a standard of proof for exemptions, and when a civil statute is silent, courts typically apply the preponder- ance standard. See, e. g., Grogan v. Garner, 498 U. S. 279. This case does not involve constitutional rights that would require a heightened standard, nor does it involve the Government taking unusual or coercive action against an individual. FLSA cases are similar to Title VII employment-discrimination cases, where the Court has applied the pre- ponderance standard. P. 52. (c) The employees' policy-laden arguments for a heightened standard are unconvincing. Their argument that the FLSA protects the public interest in a fair economy does not necessitate a heightened standard. Other workplace protections, like those under Title VII, also serve im- portant public interests but are subject to the preponderance standard. The employees argue that rights under the FLSA are nonwaivable and therefore different from other rights subject to the preponderance standard. But waivability of a right does not determine the standard of proof. Pp. 52–54. (d) Whether the employees would fail to qualify as outside salesmen even under a preponderance standard is left for the Court of Appeals on remand. P. 54. 75 F. 4th 345, reversed and remanded. Kavanaugh, J., delivered the opinion for a unanimous Court. Gor- such, J., fled a concurring opinion, in which Thomas, J., joined, post, p. 54.

Lisa S. Blatt argued the cause for petitioners. With her on the briefs were Aaron Z. Roper, Ian W. Swenson, Jeffrey M. Schwaber, and Eduardo S. Garcia. Aimee W. Brown argued the cause for the United States as amicus curiae urging reversal. With her on the brief were Solicitor General Prelogar, Principal Deputy Assist- ant Attorney General Boynton, Deputy Solictor General Kneedler, Caroline D. Lopez, and Rachel Goldberg. Lauren E. Bateman argued the cause for respondents. With her on the brief were Allison M. Zieve and Omar Vin- cent Melehy.* *Briefs of amici curiae urging reversal were fled for the Chamber of Commerce of the United States of America et al. by Steven A. Engel, Michael H. McGinley, Stephanie A. Maloney, and Angelo I. Amador; for Cite as: 604 U. S. 45 (2025) 47

Opinion of the Court

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 de- manding standard, such as clear and convincing evidence, ap- plies 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 ac- tion—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 (1989) (plu- rality opinion). None of those exceptions applies to this case. Therefore, the preponderance-of-the-evidence stand- ard governs when an employer attempts to demonstrate that an employee is exempt. I A In 1938, Congress passed and President Franklin Roose- velt 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).

the Local Government Legal Center et al. by Colin D. Dougherty, Marga- ret McCall Reece, Amanda Karras, and Erich Eiselt; for the National Association of Wholesaler-Distributors et al. by Michael J. O'Neill, Mat- thew C. Forys, and Richard P. Hutchison; and for the New England Legal Foundation by Benjamin G. Robbins and Daniel B. Winslow. A brief of amicus curiae urging vacatur was fled for the Washington Legal Founda- tion by John M. Masslon II and Cory L. Andrews. 48 E.M.D. SALES, INC. v. CARRERA

But Congress recognized that a minimum wage and over- time 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 sea- men to maple-syrup processors to software engineers to frefghters, 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 (1974). The exemption relevant here encompasses anyone em- ployed “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 (2012); 29 CFR § 541.500(a) (2023).

Page Proof Pending B Publication EMD distributes international food products in the Wash- ington, D. C., metropolitan area. EMD employs sales repre- sentatives 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 than 40 hours per week without re- ceiving 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 qualifed 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 them- Cite as: 604 U. S. 45 (2025) 49

selves. 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 affrmed 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 exemp- tions by clear and convincing evidence. Every other Court of Appeals to address the issue has held that the preponder- ance 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 Correc- tions, 942 F. 2d 1562, 1566, n. 5 (CA11 1991). This Court granted certiorari to resolve that confict. 602 U. S. 1029 (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 stand- ard. The Court's cases pre-dating the Act recognized as much. See United States v. Regan, 232 U. S. 37, 48 (1914); 50 E.M.D. SALES, INC. v. CARRERA

Lilienthal's Tobacco v. United States, 97 U. S. 237, 266 (1878). As did prominent treatises. See 4 J. Wigmore, Evi- dence 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.” Her- man & MacLean v. Huddleston, 459 U. S. 375, 390 (1983) (quotation marks omitted). In civil litigation, this Court has deviated from the prepon- derance 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 employ- ment, designate clear and convincing evidence as the appli- cable 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 trust- eeships); § 722(a)(3)(A)(ii) (ineligibility for vocational rehabil- itation services). The same can be true when Congress uses a term with a settled common-law meaning that itself re- quired a heightened standard of proof. See, e.g., Microsoft Corp. v. i4i L. P., 564 U. S. 91, 102 (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 (1964); Gertz v. Robert Welch, Inc., 418 U. S. 323, 342 (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 “signifcant deprivation of lib- Cite as: 604 U. S. 45 (2025) 51

erty” by the government that “due process requires the state to justify confnement by proof more substantial than a mere preponderance of the evidence.” 441 U. S. 418, 425–427 (1979). And in Santosky v. Kramer, the Court held the same with respect to the government's termination of paren- tal rights: “Before a State may sever completely and irrevo- cably 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 (1982). Third, under this Court's precedents, a heightened stand- ard of proof may be appropriate in certain other “uncommon” cases. Price Waterhouse v. Hopkins, 490 U. S. 228, 253 (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 indi- vidual.” 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 (1958) (expatria- tion); Schneiderman v. United States, 320 U. S. 118, 122–123 (1943) (denaturalization). Importantly, the Court has not otherwise used a height- ened standard in civil matters. See Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U. S. 93, 107 (2016) (treble damages under the Patent Act); Grogan v. Garner, 498 U. S. 279, 286–287 (1991) (bankruptcy discharges); Herman & Mac- Lean, 459 U. S., at 389–390 (securities fraud); Regan, 232 U. S., at 48–49 (civil-penalty suit under the Alien Immigra- tion Act). Most relevant here, the Court has applied a pre- ponderance standard in Title VII employment-discrimination cases. See Price Waterhouse, 490 U. S., at 253–254 (plural- ity opinion); id., at 260 (White, J., concurring in judgment); id., at 261 (O'Connor, J., concurring in judgment). 52 E.M.D. SALES, INC. v. CARRERA

B We conclude that the default preponderance standard gov- erns when an employer seeks to prove that an employee is exempt under the Fair Labor Standards Act. First, as the employees acknowledge, the Fair Labor Standards Act does not specify a standard of proof for the Act's exemptions. Faced with silence, courts usually apply the default preponderance standard. Statutory silence is generally “inconsistent with the view that Congress in- tended to require a special, heightened standard of proof.” Grogan, 498 U. S., at 286. Second, as the employees recognize, this case does not im- plicate any constitutional rights that might require a height- ened standard. Third, this is not a case where the government otherwise seeks to take “unusual coercive action” against an individual. Price Waterhouse, 490 U. S., at 253 (plurality opinion). Cases under the Fair Labor Standards Act are more akin to the Title VII cases where the Court has held that a prepon- derance standard applies. If clear and convincing evidence is not required in Title VII cases, it is hard to see why it would be required in Fair Labor Standards Act cases.

III We are not persuaded by the employees' policy-laden argu- ments for a heightened standard when an employer seeks to show that an employee is exempt. The employees contend that the Act focuses not on the individual's interest in dam- ages, but rather on the public's interest in a well-functioning economy where workers are guaranteed a fair wage. But that premise, even if accepted, does not demand a heightened standard. After all, other workplace protections that vindi- cate important public interests remain subject to the pre- ponderance standard. Eradicating discrimination from the workplace is undoubtedly important. Yet as explained above, this Court has held that a preponderance standard is Cite as: 604 U. S. 45 (2025) 53

appropriate for Title VII cases. See Price Waterhouse v. Hopkins, 490 U. S. 228, 253–254 (1989) (plurality opinion). In addition, the public interest in Fair Labor Standards Act cases does not fall entirely on the side of employees. Most legislation refects a balance of competing interests. So it is here. Rather than choose sides in a policy debate, this Court must apply the statute as written and as informed by the longstanding default rule regarding the standard of proof. Next, the employees contend that the minimum-wage and overtime-pay rights conferred by the Fair Labor Standards Act are not waivable and are therefore distinct from other rights subject to a preponderance standard. But the waiva- bility (or lack thereof) of a right does not dictate the applica- ble standard of proof. Consider the criminal process. Even though the prosecution must meet a high standard of proof— beyond a reasonable doubt—criminal defendants may waive their right to trial by pleading guilty. At the same time, some rights that are not waivable are subject to the preponderance-of-the-evidence standard. For example, cer- tain rights conferred by the National Labor Relations Act are not waivable. See National Licorice Co. v. NLRB, 309 U. S. 350, 360–361 (1940); McLaren Macomb, 372 N. L. R. B. No. 58, pp. 5–6 (2023). Yet employers may prove affrmative defenses to those rights by a preponderance. See NLRB v. Transportation Management Corp., 462 U. S. 393, 400, 403 (1983). As those cases illustrate, the waivability of a right and the standard of proof are two distinct inquiries. Therefore, although at least some Fair Labor Standards Act rights are not waivable, it does not follow that a heightened standard of proof must apply when an employer attempts to show that an employee is exempt. Finally, the employees assert that a heightened standard should govern in Fair Labor Standards Act cases because the employer controls much of the evidence relevant to es- 54 E.M.D. SALES, INC. v. CARRERA

Gorsuch, J., concurring

tablishing a violation and because plaintiffs in those cases may have low incomes. But in Title VII cases too, employ- ers control “most of the cards,” and plaintiffs may be low- income. Murray v. UBS Securities, LLC, 601 U. S. 23, 36 (2024) (quotation marks omitted). Yet the preponderance standard applies in those cases. So too here.

* * * We hold that the preponderance-of-the-evidence standard applies when an employer seeks to show that an employee is exempt from the minimum-wage and overtime-pay provi- sions of the Fair Labor Standards Act. The employees argue that we should still affrm because they would not qualify as outside salesmen even under a preponderance standard. But our usual practice is to leave matters of that sort for remand. We see no persuasive reason to stray from that usual practice here. We therefore reverse the judg- ment of the Court of Appeals and remand the case for fur- ther proceedings consistent with this opinion.

It is so ordered.

Justice Gorsuch, with whom Justice Thomas joins, concurring. Sometimes, the Constitution or Congress provides a par- ticular standard of proof. See ante, at 50–51. If not, courts must fnd one. As in other contexts, they do so by examin- ing the legal backdrop against which Congress has legislated. See, e. g., Dixon v. United States, 548 U. S. 1, 17 (2006); cf. Astoria Fed. Sav. & Loan Assn. v. Solimino, 501 U. S. 104, 108 (1991) (“Congress is understood to legislate against a background of common-law adjudicatory principles”). In civil cases, those background legal principles typically re- quire proof by a preponderance of the evidence. See ante, at 49–50. Occasionally, though, the default “common-law rule” provides instead for a “heightened standard of proof.” Mi- Cite as: 604 U. S. 45 (2025) 55

crosoft Corp. v. i4i L. P., 564 U. S. 91, 116 (2011) (Thomas, J., concurring in judgment). Either way, courts apply the de- fault standard unless Congress alters it or the Constitution forbids it. See, e. g., Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U. S. 545, 557–558 (2014). To do otherwise would be to “choose sides in a policy debate,” ante, at 53, rather than to declare the law as our judicial duty requires. Our decision today is consistent with this understanding, and I am pleased to join it.

Reporter’s Note

The attached opinion has been revised to refect the usual publication and citation style of the United States Reports. The revised pagination makes available the offcial United States Reports citation in advance of publication. The syllabus has been prepared by the Reporter of Decisions for the convenience of the reader and constitutes no part of the opinion of the Court. A list of counsel who argued or fled briefs in this case, and who were members of the bar of this Court at the time this case was argued, has been inserted following the syllabus. Other revisions may include adjustments to formatting, captions, citation form, and any errant punctuation. The following additional edits were made:

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