Under the Fair Labor Standards Act, employers bear the burden of proving the applicability of an exemption from overtime and/or minimum wage requirements. Earlier this year in E.M.D. Sales Inc. v. Carrera, the Fourth Circuit Court of Appeals (which includes North Carolina, South Carolina, and Virginia) held that the employer must prove that the FLSA exemption applies by showing clear and convincing evidence. This differs from the legal standard used by six other appellate courts, which only require a preponderance (i.e., 51%) of the evidence.

On Monday, the U.S. Supreme Court agreed to hear the employer’s appeal of the Fourth Circuit’s decision. The court initially asked the Department of Labor and Department of Justice to provide their view of this standard. Those agencies agreed with the employer, stating that the Fourth Circuit decision was unsupportable. In fact, those agencies asked the Supreme Court to summarily reverse the Fourth Circuit without oral arguments.

Assuming that the court does hold oral arguments, no decision on this case would be reached until the fall term beginning in October. In the meantime, employers in the Fourth Circuit should carefully document the basis for their exemption classifications. In the event of legal claims associated with those classifications, the employer may wish to seek a judicial stay pending the outcome of this case.

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