US Supreme Court weighs higher bar for exempting workers from federal wage law
By Daniel Wiessner
Nov 5 (Reuters) -The U.S. Supreme Court on Tuesday considered how difficult it should be for employers to prove that their workers qualify for exemptions from overtime pay and other legal protections granted by U.S. wage laws.
The justices heard arguments for about an hour in an appeal by grocery distributor EMD Sales of a 4th U.S. Circuit Court of Appeals ruling that said the company had failed to show by "clear and convincing evidence" that its sales representatives were not eligible for overtime pay.
The Richmond, Virginia-based 4th Circuit is the only appeals court to impose such a high bar. The six other courts to have considered the issue have said that proving workers are exempt from the Fair Labor Standards Act requires only "a preponderance of the evidence," which is the standard applied in most other types of civil litigation.
It was not clear how the Supreme Court was leaning but the justices asked more questions of Lauren Bateman, who argued for a group of EMD sales representatives the company says are ineligible for overtime pay, suggesting they may be more skeptical of her arguments.
Bateman maintained that the protections created by the FLSA are special because they not only ensure the rights of individual workers but also prevent businesses from underpaying workers to gain a competitive advantage and encourage some employers to hire more workers rather than paying overtime premiums.
As a result, the stakes in FLSA cases are higher than other types of litigation involving monetary damages for individual plaintiffs, said Bateman, of left-leaning nonprofit Public Citizen.
But Chief Justice John Roberts and Justice Samuel Alito questioned why that did not apply to other laws that protect private rights while serving a broader public purpose, such as the federal Clean Water Act or public assistance programs.
“The government provides lots of monetary benefits that are critically important to some people,” Alito said. “Would you have us say that none of those rise to the level of importance [of] overtime payments under the FLSA?”
Justice Ketanji Brown Jackson seemed more open to the higher standard of evidence, echoing Bateman's claims.
"Isn't this more than money damages? I would think the government would say the interests go beyond just pure money damages," Jackson said to Aimee Brown of the U.S. Department of Justice, which had filed a brief urging the court to adopt the lower burden of proof and was permitted to appear at oral arguments.
Brown and EMD's lawyer, Lisa Blatt, argued that if Congress intended to impose a higher burden of proof for applying FLSA exemptions, it would have done so explicitly when the law was adopted in 1938.
Blatt noted that other employment laws including Title VII of the Civil Rights Act of 1964 and the National Labor Relations Act have a broad impact on workers' rights but that courts have never required more than a preponderance of the evidence in cases involving those statutes.
Three workers claimed in a 2017 proposed class action that EMD had improperly classified them as "outside sales employees" who are primarily engaged in sales away from an employer's place of business and are exempt from overtime pay under the FLSA.
U.S. District Judge James Bredar in Baltimore ruled for the plaintiffs after a bench trial in 2021, finding that their primary duties were not sales but stocking shelves, removing damaged and expired items, and issuing credits to grocery stores.
Over EMD's objections, Bredar had required the company to show clear and convincing evidence that the exemption applied. The 4th Circuit upheld that ruling last year, saying Bredar properly applied the appeals court's precedent on the burden of proof in FLSA cases.
The case is EMD Sales Inc v. Carrera, U.S. Supreme Court, No. 23-217.
For EMD Sales: Lisa Blatt of Williams & Connolly
For the plaintiffs: Lauren Bateman of Public Citizen; Omar Melehy of Melehy & Associates
For the United States: Aimee Brown of the U.S. Department of Justice
Read more:
US Supreme Court will review test for applying wage law exemptions
Reporting by Daniel Wiessner in Albany, New York
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