Supreme Court Sets Standard That Employers Must Show to Establish FLSA Exemption
On Jan. 15, 2025, the United States Supreme Court issued its decision in E.M.D. Sales, Inc. v. Carrera, clarifying the standard that employers must show to establish an exemption to the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA). As readers of these updates know, the FLSA requires employers pay minimum wage and overtime, unless an exemption applies, e.g., its Executive, Administrative, Professional, Computer & Outside Sales Exemptions. The burden is on the employer to show that an exemption is appropriate. But just how onerous is that burden?
EMD Sales classified employees who managed inventory and took orders at grocery stores as exempt under the Outside Sales exemption, which applies to employees whose primary duty is to generate sales away from the employer’s place of business. Because of this classification, EMD Sales did not pay overtime. A number of these employees filed a collective action against EMD Sales, arguing that their employer misclassified them and that are owed overtime pay.
A federal district court in Maryland found that EMD Sales had misclassified these workers. In making this decision, the court applied a heightened “clear and convincing evidence” on the employer, which refers to evidence that is highly and substantially more likely to be true than untrue. The Fourth Circuit Court of Appeals affirmed this decision and the district court’s use of the “clear and convincing” standard. This decision stood in contrast to rulings from other Circuits (including the Sixth, Seventh, Ninth, Tenth and Eleventh), which have applied a “preponderance” standard to an employer’s FLSA burden, i.e., employers need only show that their claimed exemption “more likely than not” is correct.
The U.S. Supreme Court took up the appeal to resolve this Circuit split, and, in what seems rare these days, issued its ruling unanimously. The Court rejected the higher evidentiary standard applied by the Fourth Circuit and clarified that employers must establish their FLSA exemptions by a preponderance of the evidence. While this decision is certainly good news for employers, it stands as a helpful reminder that employers have the burden to show that their FLSA exemptions are correct.
DOL Answers Question: When may an employer require an employee to use paid leave for lactation breaks under the PUMP Act?
Under the Family & Medical Leave Act (FMLA), an employer may require an employee to run paid leave concurrently with FMLA leave. But what about leave under the PUMP Act—may an employer require an employee use paid leave for lactation breaks? The U.S. Department of Labor (DOL) recently answered this question for one of our clients.
Our client—we’ll call them “ABC Co.”—adopted a PUMP Act policy. Under this policy, new birth mothers are allowed additional breaktime as needed for lactation during the first year after childbirth, a private room (other than a bathroom) for that purpose, and are completely relieved of duty while on lactation breaks. ABC Co. also provides its employees with two 15-minute paid breaks and one 60-minute unpaid lunch break, which may be used for lactation. Consistent with its other leave policies, employees who take additional breaks for lactation have their accrued paid leave hours applied. When all paid leave is exhausted, employees take unpaid, job-protected leave for additional lactation breaks.
One of ABC Co.’s employees complained to the DOL about this policy. She was taking a lot of extra breaks for lactation and used all her paid leave. Additional lactation breaks were provided as unpaid leave. However, when the employee took additional leave unrelated to lactation (to care for a sick pet), she had no available leave and received an attendance point and a verbal warning. The employee complained to the DOL, and the DOL investigated.
Initially, the DOL investigator told us that, unlike the FMLA, the PUMP Act does not allow employers to require their employees to use paid leave for extra lactation breaks. We thoroughly scoured the PUMP Act as well as the DOL’s published guidance and could find no prohibition against the required use of paid leave for extra lactation breaks. We asked the DOL to provide resources, either citation to the Act or DOL guidance, to help us understand why the DOL took the position that requiring the use of paid leave for extra lactation breaks was unlawful. Specifically, we asked the DOL to clarify whether ABC Co. may require the individual who had raised a concern “to use accrued paid leave to express breastmilk for breaktime that exceeds their two paid breaks and one unpaid lunch break, given that all other employees also are required to use paid leave for all breaktime exceeding the breaks provided by [the company].”
After a couple of weeks, the DOL investigator replied that they had “received guidance [from the Regional DOL office] that [ABC Co.’s] policy of using sick leave for breaks is not in violation of the PUMP Act.”
Here’s the bottom-line: An employer may require employee use of paid leave for lactation breaktime exceeding paid 15-minute breaks and unpaid lunch breaks, provided that all other employees are required to use paid leave for any extra breaktime as well.
Parsons to Present Annual Employment Update to Salt Lake SHRM
On Feb. 11, 2025, members of the Parsons Behle & Latimer employment practice will present the firm’s annual employment law update for Salt Lake SHRM. Parsons’ employment and labor attorneys will address the most significant employment developments of 2024 and trends from early 2025. Among other subjects, Parsons’ attorneys will present on key caselaw developments from the United States Supreme Court, other important federal court decisions that are changing the landscape of equal employment opportunity law, regulatory developments arising from the Equal Employment Opportunity Commission, Department of Labor and National Labor Relations Board, employment legislation enacted in the 2024 Utah Legislative Session (which saw a record number of bills passed) and an overview of any employment-related bills pending during the Legislature’s 2025 session as well as what to expect from a second Trump Administration.
This event will sell out, so register quickly here: Annual Employment Law Update. Based on overwhelming demand, registrations may be limited to members of Salt Lake SHRM. If you are a member of another SHRM chapter, please consider joining our legal updates later this year for the Bridgerland, NUHRA and Color Country chapters.
