E.M.D. Sales Inc vs. Carrera: A Fair Labor Standards Act Circuit Split

By Cole Snyder ‘27

Under the separation of powers in the Constitution, whenever a new bill is passed by Congress, it is up to the courts to interpret that law and how it should be applied. In a perfect world, these new laws would all be interpreted the same way by every court across the country. However, the courts occasionally disagree, leading to what is referred to as a “split” in the circuits. Just in the year 2024, there were a total of eighty-eight circuit splits that were acknowledged in opinions written by appellate court judges. Because of the time it takes for cases to move up to the Supreme Court, resolving circuit splits is a process that can take years. For example, the Fair Labor Standards Act (FLSA) had a split resolved by the Supreme Court earlier this year, eighty-seven years after becoming law.

The Fair Labor Standards Act was passed by Congress in January of 1938 and signed into law in October of that year by sitting President Franklin D. Roosevelt. This piece of legislation, passed during the Great Depression, aimed to improve the conditions and hours of people working in certain industries by enacting workplace safety requirements, requiring employers to pay overtime wages for hours over forty worked, and the right to minimum wage. The FLSA also greatly restricted companies' abilities to use child labor across the country. Despite being passed almost a hundred years ago, disputes over the interpretation of this act still occur.

In 2017, three employees of E.M.D Sales, Inc., a grocery store distributor in the Washington D.C. metropolitan area, filed suit under the FLSA alleging that their employer failed to compensate them with overtime wages. Both parties agreed on the fact that all three plaintiffs worked more than forty hours per week, but disagreed over their classification under the Fair Labor Standards Act (FLSA). The FLSA specifically exempts certain types of employees, such as outside salesmen and teachers, from its provision about overtime wages. Throughout a nine-day bench trial, the defendants argued that the plaintiffs were considered “outside salesmen” and were not entitled to receive overtime compensation. To decide this case, the court asked two questions: whether the plaintiffs were able to make sales in their roles as sales representatives and if making sales was the “primary duty” of their employment.

At the end of the trial, due to evidence that most work was done in “chain stores” where sales contracts were set by higher up management, the court ruled in favor of the plaintiff. But exactly was the split in the circuits? It was the standard of proof. While typically the standard of proof in civil cases is a preponderance of the evidence, the Fourth Circuit Court of Appeals required that employers prove employees fall under an FLSA exemption by clear and convincing evidence. This standard of proof, which is higher than a preponderance of the evidence and lower than beyond a reasonable doubt, makes it harder for employers to win FLSA exemption cases. Out of all thirteen Circuit Court of Appeals, the Fourth Circuit was the only one to impose this heightened standard of proof. 

After the bench trial, E.M.D. Sales, Inc. unsuccessfully appealed to the Fourth Circuit Court of Appeals and then filed a Writ of Certiorari on September 5th, 2023. This petition was granted on June 17th, 2024, and oral arguments were held on November 5th, 2024. In their brief filed with the Supreme Court, appellants E.M.D. Sales, Inc. argued that if Congress had intended for the burden of proof to be “clear and convincing evidence,” they would have specified that as they did over a hundred other times in the U.S. Code and other parts of the FLSA. The Appellants also pointed out that the foundation for the Fourth Circuit’s use of “clear and convincing evidence” was based on a misread of a case decided in the Tenth Circuit in 1988. 

On January 15, 2025, the Supreme Court of the United States unanimously ruled to reverse the decisions of the lower courts and remanded the case back down to its original trial court for a new trial using the preponderance of evidence burden. In the opinion written by Justice Kavanaugh, the Supreme Court determined that, because the FLSA does not specify a burden of proof, the default should apply. The default is the lower burden of proof, “preponderance of the evidence,” as opposed to “clear and convincing evidence” used by the courts in this case. The court went on to say that there are three narrow exceptions to the preponderance of the evidence rule in civil cases, none of which apply to the FLSA. 

Cole Snyder is a sophomore majoring in physics.

Sources

Casey E. (2025.) Supreme Court Decides E.M.D. Sales, Inc. v. Carrera. Faegre Drinker. https://www.faegredrinker.com/en/insights/publications/2025/1/supreme-court-decides-emd-sales-inc-v carrera#:~:text=In%20a%20unanimous%20decision%2C%20the,wage%20and%20overtime% 2Dpay%20provisions 

E.M.D. Sales, Inc. v. Carrera, 604 U.S. 45 (2025) https://www.scotusblog.com/case-files/cases/e-m-d-sales-inc-v-carrera/ 

E.M.D. Sales, Inc. v. Carrera, (2025) Public Citizen https://www.citizen.org/litigation/e-m-d-sales-inc-v-carrera/ 

This Month in Business History: Fair Labor Standards Act Signed. Library of Congress. https://guides.loc.gov/this-month-in-business-history/june/fair-labor-standards-act-signed 

The United States Courts of Appeals: Background and Circuit Splits from 2024 (2025).Congressional Research Service. https://crsreports.congress.gov/product/pdf/R/R48369