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

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Supreme Court of the United States
E.M.D. Sales, Inc. v. Carrera
Term: 2024
Important Dates
Argued: November 5, 2024
Decided: January 15, 2025
Outcome
reversed and remanded
Vote
9-0
Majority
Chief Justice John Roberts • Clarence Thomas • Samuel Alito • Sonia Sotomayor • Elena Kagan • Neil Gorsuch • Brett Kavanaugh • Amy Coney Barrett • Ketanji Brown Jackson
Concurring
Neil Gorsuch • Clarence Thomas

E.M.D. Sales, Inc. v. Carrera is a case that was decided by the Supreme Court of the United States on January 15, 2025, during the court's October 2024-2025 term. The case was argued before the Supreme Court of the United States on November 5, 2024.

HIGHLIGHTS
  • The issue: The case concerned the Fair Labor Standards Act's (FLSA) outside sales exemption. Click here to learn more about the case's background.
  • The questions presented: "Whether the burden of proof that employers must satisfy to demonstrate the applicability of an FLSA exemption is a mere preponderance of the evidence—as six circuits hold—or clear and convincing evidence, as the Fourth Circuit alone holds."[1]
  • The outcome: In a 9-0 opinion, the court reversed and remanded the judgment of the United States Court of Appeals for the Fourth Circuit, holding that the preponderance-of-the-evidence standard should be applied when an employer must show that an employee is exempt from the minimum-wage and overtime-pay provisions of the Fair Labor Standards Act.[2]


    • The case came on a writ of certiorari to the United States Court of Appeals for the Fourth Circuit. To review the lower court's opinion, click here.

    Timeline

    The following timeline details key events in this case:


    Background

    The petitioner in the case is food distributor E.M.D. Sales, Inc. (EMD) owner, Elda Devarie. The respondents are three current and former EMD sales representatives. The employees worked more than forty hours per week and earned commission-based pay. The sales reps sued EMD in the United States District Court for the District of Maryland, alleging that they are owed overtime pay under the Fair Labor Standards Act (FLSA). EMD contends that the employees fall under the Fair Labor Standards Act outside sales exemption, exempting overtime pay for sales employees working outside of the office.[3][4]

    The District of Maryland ruled that the sales representatives were due overtime pay, holding that EMD failed to prove their duties fell under the outside sales exemption and had not shown an objectively reasonable basis for the pay practices. The court awarded the employees liquidated damages. As well, the court ruled that the employees had not proven that EMD or Devarie had purposely violated the Act, which altered the calculus for damages owed for the violations.[3][4]

    On appeal, a three-judge panel of the United States Court of Appeals for the Fourth Circuit affirmed the United States District Court for the District of Maryland's judgment.[3]

    On September 5, 2023, E.M.D. Sales, Inc. appealed to the U.S. Supreme Court.[4] On June 17, 2024, SCOTUS accepted the case to its merits docket for October term 2024-2025.


    Fair Labor Standards Act's (FLSA) outside sales exemption

    The Department of Labor defines the Fair Labor Standards Act's (FLSA) outside sales exemption as follows:[5]

    “ Who is employed for the purpose of and customarily and regularly engaged away from the employer’s place or places of business in making sales; or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and


    Who does not devote more than 20 percent of the hours worked by nonexempt employees of the employer to activities that are not incidental to and in conjunction with the employee’s own outside sales or solicitations.[6]

    		”


    Questions presented

    The petitioner presented the following questions to the court:[1]

    Questions presented:
    “ Whether the burden of proof that employers must satisfy to demonstrate the applicability of an FLSA exemption is a mere preponderance of the evidence—as six circuits hold—or clear and convincing evidence, as the Fourth Circuit alone holds.[6] ”

    Oral argument

    Audio

    Audio of oral argument:[7]




    Transcript

    Transcript of oral argument:[8]

    Outcome

    In a 9-0 opinion, the court reversed and remanded the judgment of the United States Court of Appeals for the Fourth Circuit, holding that the preponderance-of-the-evidence standard should be applied when an employer must show that an employee is exempt from the minimum-wage and overtime-pay provisions of the Fair Labor Standards Act. Justice Brett Kavanaugh delivered the opinion of the court.[2]

    Opinion

    In the court's majority opinion, Justice Brett Kavanaugh wrote:[2]

    “

    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 overtimepay provisions of the Fair Labor Standards Act. The employees argue that we should still affirm 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 judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion.[6]

    		”
    —Justice Brett Kavanaugh

    Concurring opinion

    Justice Neil Gorsuch filed a concurring opinion, joined by Justice Clarence Thomas.

    In his concurring opinion, Justice Gorsuch wrote:[2]

    “

    Sometimes, the Constitution or Congress provides a particular standard of proof. See ante, at 4–5. If not, courts must find one. As in other contexts, they do so by examining 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 require proof by a preponderance of the evidence. See ante, at 4. Occasionally, though, the default “common-law rule” provides instead for a “heightened standard of proof.” Microsoft Corp. v. i4i L. P., 564 U. S. 91, 116 (2011) (THOMAS, J., concurring in judgment). Either way, courts apply the default 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 7, 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.[6]

    		”
    —Justice Neil Gorsuch

    Text of the opinion

    Read the full opinion here.

    October term 2024-2025

    See also: Supreme Court cases, October term 2024-2025

    The Supreme Court began hearing cases for the term on October 7, 2024. The court's yearly term begins on the first Monday in October and lasts until the first Monday in October the following year. The court generally releases the majority of its decisions in mid-June.[9]


    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 U.S. Supreme Court, "23-217 E.M.D. SALES, INC. V. CARRERA," June 17, 2024
    2. ↑ 2.0 2.1 2.2 2.3 U.S. Supreme Court, "E.M.D. Sales, Inc. v. Carrera," January 15, 2025
    3. ↑ 3.0 3.1 3.2 3.3 U.S. Court of Appeals for the 4th Circuit, Carrera v. E.M.D. Sales Inc., decided July 27, 2023
    4. ↑ 4.0 4.1 4.2 U.S. Supreme Court, "E.M.D. Sales, Inc. v. Carrera PETITION FOR A WRIT OF CERTIORARI," filed September 5, 2023
    5. ↑ U.S. Department of Labor, "Fair Labor Standards Act (FLSA) Exemptions," accessed June 19, 2024
    6. ↑ 6.0 6.1 6.2 6.3 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    7. ↑ Supreme Court of the United States, "Oral Argument - Audio," argued November 5, 2024
    8. ↑ Supreme Court of the United States, "Oral Argument - Transcript," argued November 5, 2024
    9. ↑ SupremeCourt.gov, "The Supreme Court at Work: The Term and Caseload," accessed January 24, 2022
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