On January 15, 2025, the United States Supreme Court delivered a unanimous decision that eases the burden of proof for employers in wage-related lawsuits under the Fair Labor Standards Act (FLSA). The Court ruled that employers must demonstrate by a “preponderance of the evidence”—meaning it is more likely than not—that workers qualify for exemptions from overtime pay, rejecting the stricter “clear and convincing evidence” standard previously applied by the 4th U.S. Circuit Court of Appeals.
This case originated from a lawsuit involving EMD Sales, a grocery distributor, where sales employees alleged they were misclassified as exempt from overtime pay. The Supreme Court’s decision aligns with precedents set by six other appellate courts, standardizing the burden of proof across jurisdictions and simplifying defense strategies for businesses facing similar wage disputes. Justice Brett Kavanaugh, writing for the Court, emphasized that the “preponderance of the evidence” standard is the norm in civil litigation, and there was no justification for imposing a higher burden on employers in FLSA exemption cases.
This ruling is part of a broader trend in the Supreme Court’s recent decisions that have significant implications for regulatory practices and business operations. In the past few months, the Court has issued rulings that empower legal challenges against federal regulatory agencies, a development celebrated by conservatives and business groups as a check on bureaucratic overreach. However, consumer and environmental advocates express concern that this heightened judicial scrutiny could lead to legal uncertainties and weaken public protections. Notably, cases such as “Loper Bright Enterprises v. Raimondo” have reduced agencies’ interpretive power, allowing for more challenges to established rules and potentially resulting in more limited government actions.
In another significant development, the Supreme Court declined to revive a groundbreaking lawsuit filed by 21 young activists who argued that U.S. government energy policies violated their rights to protection from climate change. The justices denied a request to overturn a lower court’s dismissal of the case, indicating that complex policy decisions regarding climate change are within the purview of Congress and the executive branch, not the judiciary.
These decisions collectively reflect the Supreme Court’s current approach to balancing regulatory authority, business interests, and environmental concerns. By lowering the burden of proof for employers in FLSA exemption cases, the Court has made it more feasible for businesses to defend against wage and hour claims. Simultaneously, the Court’s rulings limiting the scope of agency power and declining to adjudicate climate policy underscore a judicial philosophy that favors legislative and executive action over judicial intervention in complex policy areas.
Written by Anushka Sriram
