FP’s Inside Counsel Spin
Decision in a Nutshell You can read a full accounting of the E.M.D. Sales, Inc. v. Carrera case in our January 15 Insight: SCOTUS Delivers Win to Employers in Overtime Exemption Cases by Rejecting Higher Standard of Proof: Key Takeaways. The case involved several employees of a grocery distribution company who claimed they were misclassified as outside sales employees and therefore owed overtime pay. There was a split among the federal appeals courts as to what standard of proof the employer must meet when presenting evidence to defeat the claim: • A “preponderance of the evidence” standard, a lower threshold roughly equivalent to a 51% chance of being correct; or • A more-stringent “clear and convincing” standard, thought to be about an 80-90% chance of being correct, but less than “beyond a reasonable doubt.” The 4th U.S. Circuit Court of Appeals applied the higher clear and convincing standard, making it the sole federal appeals court to do so. In contrast, six other federal appeals courts (the 5th, 6th, 7th, 9th, 10th, and 11th) applied the preponderance of evidence standard. SCOTUS resolved this disagreement and set a consistent standard nationwide with its January 15 decision.
The Supreme Court handed businesses a wage and hour win in January, but inside counsel need to ensure they are taking appropriate action to take advantage of the standard set by the Court. The Justices ruled that employers do not have to meet the unusually high “clear and convincing” evidence standard to prove they correctly classified employees as exempt from minimum wage and overtime pay under the Fair Labor Standards Act (FLSA). Rather, employers need only show their position is more likely than not correct under the “preponderance of the evidence” standard. This decision sets a consistent national standard and could reduce litigation risks – but only if you ensure you are following best practices.
Christine E. Howard Partner Tampa / Atlanta
Made with FlippingBook - Share PDF online