Proving an Overtime Exemption After E.M.D. Sales v. Carrera

“The preponderance-of-the-evidence standard governs when an employer attempts to demonstrate that an employee is exempt.” That’s the unanimous holding of the U.S. Supreme Court in E.M.D. Sales, Inc. v. Carrera (2025), and it ended a Fourth Circuit rule requiring clear and convincing proof under the FLSA. For California employers, the decision helps less than it sounds. State law already used the preponderance standard, the employer still carries the burden, and California courts construe exemptions narrowly against the employer.

What did the Supreme Court decide in Carrera?

That the ordinary civil standard applies. In E.M.D. Sales, Inc. v. Carrera (2025) 604 U.S. 45, sales representatives for a food distributor claimed overtime under the Fair Labor Standards Act. The employer argued they were exempt outside salesmen. The district court required the employer to prove the exemption by clear and convincing evidence, found it hadn’t, and the Fourth Circuit affirmed.

The Supreme Court reversed. The opinion explains that “The usual standard of proof in civil litigation is preponderance of the evidence,” and that a heightened standard applies only when a statute or the Constitution requires it or in rare cases involving coercive government action. The FLSA says nothing about the standard, and the Court reasoned that “Faced with silence, courts usually apply the default preponderance standard.”

The Court also tied the result to discrimination cases. In the Court’s words, “If clear and convincing evidence is not required in Title VII cases, it is hard to see why it would be required in Fair Labor Standards Act cases.”

The Court didn’t decide whether the sales representatives were exempt. It sent the case back for the Fourth Circuit to apply the correct standard.

Does Carrera change anything in California?

Mostly no. Most California exemption cases are brought under the Labor Code and the IWC wage orders, not the FLSA, and California has long used the preponderance standard. Evidence Code section 115 provides: “Except as otherwise provided by law, the burden of proof requires proof by a preponderance of the evidence.” No California statute sets a higher standard for wage-order exemptions.

What California adds is the burden and the narrow reading. In Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785, the Supreme Court of California explained that “under California law, exemptions from statutory mandatory overtime provisions are narrowly construed.” The court added that “the assertion of an exemption from the overtime laws is considered to be an affirmative defense, and therefore the employer bears the burden of proving the employee’s exemption.”

So a California employer defending a misclassification claim still has to prove each element of the exemption, more likely than not, with the exemption read narrowly. Carrera matters most where a plaintiff pleads FLSA claims alongside California claims, often in federal court, and argues for a heightened federal standard. That argument is gone.

Where do exemption cases actually get won or lost?

On the facts of how the employee spent their time. Ramirez held that the outside salesperson exemption under California law depends on the actual work performed, measured against the employer’s realistic expectations, not on a job description. The same is true for the executive, administrative, and professional exemptions, which also require a salary test.

That shifts the defense to evidence. A job description saying “manager” doesn’t prove the employee managed. Calendars, sales logs, expense reports, CRM data, and testimony from the employee’s supervisors and coworkers usually decide the case. An employer that can show what the employee did week to week, and that the work was mostly exempt, is in a much stronger position than one relying on a title.

The narrow-construction rule makes ambiguity expensive. When the evidence is close, California courts resolve the doubt against the exemption. An employer that classifies borderline roles as exempt is accepting a risk that’s harder to defend than it would be under federal law alone.

What about cases with both FLSA and California claims?

They need two sets of instructions, and the differences matter. A plaintiff who sues in federal court for FLSA overtime and California wage-order overtime gets one trial but two legal tests. The standard of proof is now the same for both. The way the exemption is read isn’t. Under the FLSA, the U.S. Supreme Court has said exemptions get a fair reading, not a narrow one (Encino Motorcars, LLC v. Navarro (2018)). Under California law, Ramirez still requires a narrow reading. The duties tests also differ. California’s white-collar exemptions generally require that the employee be primarily engaged in exempt work, meaning more than half of their time, while the federal tests look at the employee’s primary duty.

Defense counsel should press for jury instructions and a verdict form that keep those tests separate. A combined instruction that blends the federal and state standards can hurt the employer on both claims. Expert and percipient testimony about time spent on particular tasks is also worth building early, because it answers the California quantitative test directly and supports the federal primary-duty analysis at the same time.

Should employers reclassify roles after Carrera?

The decision itself isn’t a reason to. It doesn’t make any role exempt that wasn’t before. The better use of Carrera is as a prompt for an audit. Positions with a mix of exempt and nonexempt duties, inside sales roles, assistant managers who spend much of their time on the floor, and roles paid near the salary threshold are the ones that generate claims. California’s minimum salary for the white-collar exemptions is tied to the state minimum wage and rises with it, so a position that met the test last year may not meet it now.

Reclassifying has its own risks. Moving a group of employees from exempt to nonexempt can be read as an admission, and it can prompt claims for prior periods. It’s worth doing carefully, with counsel, and with consistent messaging. The firm’s post on exempt misclassification of executive and administrative employees covers the duties tests in more detail.

When an exempt employee claims overtime

1. Preserve the employee’s job descriptions, offer letters, pay records, calendars, sales or activity logs, expense reports, and the emails and texts about their duties, under a litigation hold.
2. Calendar the response deadline on the demand, PAGA notice, or complaint, and check for an arbitration agreement and an EPLI policy.
3. Identify the supervisors and coworkers who know how the employee spent their time, and avoid any action against the employee that could look like retaliation.
4. Pull the records showing hours, duties, and salary for each pay period at issue, including any period when the salary fell below the state minimum.
5. Talk to counsel before reclassifying anyone, responding to the claim, or contacting the employee’s lawyer.

Exemption fights are a core part of wage and hour litigation. The firm’s California wage and hour defense page describes how those cases are defended.

Exemption burden questions

Does Carrera mean an employer can win with less evidence?

Under the FLSA, it means the employer doesn’t have to meet a heightened clear and convincing standard in the circuits that had used one. It still has to prove the exemption is more likely than not. In California wage-order cases, nothing changed, because preponderance was already the standard and the employer already carried the burden. The quality of the evidence about actual duties still decides most cases.

Can a plaintiff avoid Carrera by suing only under California law?

Many already do. California wage-order claims are often worth more than FLSA claims, because of daily overtime, meal and rest premiums, waiting time penalties, and PAGA. A plaintiff who pleads only California claims faces the state standard, which is also preponderance, but gets the benefit of California’s narrow construction of exemptions.

Does a job title or job description prove an exemption?

No. Courts look at what the employee actually did and how much time they spent doing it. A job description is evidence of what the employer expected, and Ramirez treats realistic expectations as relevant, but it won’t carry an exemption defense alone. Contemporaneous records of the employee’s work, and testimony from people who saw it, matter far more.

Who decides whether an employee is exempt at trial?

Usually the jury, if the case goes to trial in court, with the judge instructing on the elements and the standard of proof. In arbitration, the arbitrator decides. In either forum, the employer presents evidence first on the exemption because it’s an affirmative defense. Class certification fights often hinge on whether exemption can be proven with common evidence.

If an employee claims they were misclassified as exempt

If your company has received a demand or lawsuit claiming an employee was wrongly treated as exempt, the records of what the employee actually did usually decide the case. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including claims involving exempt classification and overtime. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.

Sources

The cases are E.M.D. Sales, Inc. v. Carrera (2025) 604 U.S. 45 and Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785. The statute is Evidence Code section 115.

This post is general information about California and federal employment law as of November 7, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.