When you pursue or defend an unpaid overtime case under the Fair Labor Standards Act, there are a lot of variables and uncertainties. One thing that is certain, in the wake of a recent U.S. Supreme Court ruling, is the standard of proof that applies when the dispute centers around exempt-versus-nonexempt classifications. Even with the court deeming that the less-rigorous burden applied, employers should be aware that proving the applicability of an exemption still requires substantial evidence and deep knowledge of the law. Ensuring you have the right Atlanta wage and hour lawyer on your side can make all the difference in clearing this evidentiary hurdle.
The recent Supreme Court case began in a Maryland federal court. A group of sales representatives sued their employer for unpaid overtime. The employer contended that it owed the representatives no overtime because they were exempt employees. (Specifically, the employer deemed the representatives covered by the FLSA’s “outside salesman” exemption.)
The trial court ruled in favor of the employees, concluding that the employer failed to show “by clear and convincing evidence” that the exemption applied. The 4th Circuit Court of Appeals upheld that decision.
The Supreme Court, however, struck down the ruling. The unanimous court noted that the 4th Circuit court was the only federal appellate court to conclude that the FLSA requires employers to present “clear and convincing” evidence of an exemption’s applicability. All other federal appellate courts have ruled that the lower “preponderance of the evidence” standard applies. That includes the 11th Circuit (whose rulings cover federal FLSA litigation in Georgia, Florida, and Alabama.) That court ruled in 1991 that the lower standard was the proper one.
To understand the importance of this ruling, it helps to know a bit more about standards of proof in civil lawsuits. Generally, a party asserting a fact has to prove it by a “preponderance of the evidence.” This means “more probable than not.” One can think of this standard numerically as “at least one iota more than 50%” likely true.
By contrast, “clear and convincing” evidence requires notably more. It demands that a party prove that a fact is “highly probable” rather than merely more probable than not. This is a very demanding standard, and although lower than “beyond a reasonable doubt,” it is a high hurdle to clear. This means there is a substantial difference between what it takes to prove exempt employee status by a preponderance of the evidence and clear and convincing evidence.
The Supreme Court, in explaining its ruling, pointed out that heightened standards (like “clear and convincing” evidence) only arise in limited settings. One is if the statute establishes it. (For example, FLSA whistleblowers who allege retaliation must prove that retaliation by clear and convincing evidence.) Another is if the Constitution requires it. (For example, the Due Process Clause requires clear and convincing evidence in involuntary civil commitment and termination of parental rights cases.) Last is when the Supreme Court demands it. (Examples include immigration/citizenship matters like denaturalization and expatriation.)
In 1989, the court concluded that employment discrimination cases under Title VII required only the preponderance standard. The court deemed that decision highly relevant to concluding that the preponderance standard also applied to FLSA matters.
For reliable answers, sound advice, and practical strategies related to exempt/nonexempt classification and other FLSA issues, talk to the experienced Atlanta wage and hour attorneys at the law firm of Parks, Chesin & Walbert. Contact us through this website or at 404-873-8048 to schedule a consultation today.