While welcome news to most employers, those in California are unlikely to be impacted by the U.S. Supreme Court’s recent ruling in E.M.D. Sales, Inc. v. Carrera, 220 L. Ed. 2d 309 (2025). In E.M.D. Sales, the Court rejected the argument that employers must prove an overtime exemption under the Fair Labor Standards Act (FLSA) by clear and convincing evidence. The standard, the Court said, should be no greater than by a preponderance of the evidence. But this ruling does not change the burden for California employers under state law. 

E.M.D. Sales

The plaintiffs in E.M.D. Sales claimed they were improperly classified under the FLSA asoutside salespersons exempt from overtime. Exemptions are considered a defense to overtime claims, and the burden to prove the defense is on an employer. The District Court sided with the plaintiffs, holding that the employer had not proved by “clear and convincing” evidence[1] that they were properly classified. This aligned with precedent in the Fourth Circuit, which affirmed the lower court’s ruling. When the case made its way to the U.S. Supreme Court, however, the Court instead sided with precedent from the Fifth, Sixth, Seventh, Ninth, Tenth, and Eleventh Circuits, holding an employer must only satisfy the lower (and easier to meet) “preponderance of the evidence” burden of proof.

The plaintiffs argued that the higher, “clear and convincing” standard was appropriate because the FLSA focuses on the public’s interest in a well-functioning economy, the FLSA rights at issue were not waivable, and the employer generally has control over the evidence while impacted employees may have fewer resources. The Court was unpersuaded. In its 9-0 decision, the Court explained that, as can be evidenced by Title VII cases, a law’s focus on important public interests, the fact that the employer controls much of the evidence, and the non-waivability of rights do not require a heightened standard of proof.  

 Takeaways for California Employers

The E.M.D Sales holding, coupled with the Court’s ruling in Encino Motorcars, LLC v. Navarro, 579 U.S. 211, 230 (2016), which rejected the notion that FLSA overtime exemptions should be narrowly construed, may provide good news for employers who face claims they misclassified workers under the FLSA. Unfortunately for California employers however, most misclassification claims are brought under California state law and not the FLSA such that these decisions are likely to have little practical application.

The California Supreme Court has maintained that state law overtime exemptions should be “narrowly construed” and applied only to employees who “‘plainly and unmistakably’” fall within the exemption’s language.[2] This, together with the quantitative prong of California’s duties test, which requires employers to prove that their exempt employees are actually engaged in exempt duties more than 50% of their working time, effectively means that the burden of proof for employers under California law is greater than it would be if the case were filed under the FLSA. Stated differently, while the E.M.D Sales decision should be good news to most employers outside of California, it has little to no practical application to California employers.

The E.M.D Sales decision is another reminder that California stands out from the crowd—and often to the employers’ detriment. California employers are advised to have competent California legal counsel at the ready to help guide them through the prickly and unique brambles of California employment law.

[1] The “clear and convincing” standard means that the evidence is highly and substantially more likely to be true than untrue. By contrast, the “preponderance of the evidence” standard means more than 50%, or enough evidence to tip a scale slightly for a fact to be more probable.

[2] See, e.g., Ramirez v. Yosemite Water Co., 20 Cal. 4th 785, 794 (1999); Peabody v. Time Warner Cable, Inc., 59 Cal. 4th 662, 667 (2014).