Amicus Curiae Brief — E.M.D. Sales, Inc., et al., Petitioners v. Faustino Sanchez Carrera, et al.

No. 23-217

In the

Supreme Court of the United States

E.M.D. SALES, INC., et al.,

Petitioners,

v.

FAUSTINO SANCHEZ CARRERA, et al.,

Respondents.

On Writ of Certiorari to the United States

Court of A ppeals for the Fourth Circuit

BRIEF OF AMICI CURIAE NATIONAL ASSOCIATION

OF WHOLESALER-DISTRIBUTORS AND

INTERNATIONAL FOODSERVICE DISTRIBUTORS

ASSOCIATION IN SUPPORT OF PETITIONERS

Richard P. Hutchison

Landmark Legal

Foundation

3100 Broadway, Suite 1210

Kansas City, MO 64111

Michael J. O’Neill

Counsel of Record

Matthew C. Forys

Landmark Legal

Foundation

19415 Deerfield Avenue,

Suite 312

Leesburg, VA 20176

(703) 554-6100

mike@landmarklegal.org

Attorneys for Amici Curiae

August 19, 2024

116994

A

(800) 274-3321 • (800) 359-6859

i

TABLE OF CONTENTS

Page

TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . i

TABLE OF CITED AUTHORITES . . . . . . . . . . . . . . . iii

INTEREST OF AMICI CURIAE . . . . . . . . . . . . . . . . . . 1

I N T RODUC T ION A N D SU M M A RY OF

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

A. Outside salespeople play a unique

a n d i nt e g r a l r ol e i n b u s i n e s s

operations that justifies exemption

from FLSA’s overtime and minimum

wage provisions. . . . . . . . . . . . . . . . . . . . . . . . 5

B. Courts, the Department of Labor, and

organized labor all recognize the unique

role played by outside salespeople

and the need to exempt them from

FLSA’s overtime and minimum wage

provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

C. Courts are to apply a fair reading

approach when deter mining the

applicability of the FLSA’s overtime and

minimum wage provisions. . . . . . . . . . . . . . 12

ii

Table of Contents

Page

D. Application of the clear and convincing

st a nda rd i s t he r a re e xcept ion

reser ved for a handful of cases

where the litigants seek more than

monetary damages . . . . . . . . . . . . . . . . . . . . 15

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

iii

TABLE OF CITED AUTHORITIES

Page

Cases:

Addington v. Texas,

441 U.S. 418 (1979) . . . . . . . . . . . . . . . . . . . . . . . . 15, 16

Bittner v. United States,

598 U.S. 85 (2023) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Christopher v. SmithKline Beecham Corp.,

567 U.S. 142 (2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Comm’r of Internal Revenue v. Acker,

361 U.S. 87 (1959) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Dubin v. United States,

599 U.S. 110 (2023) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Encino Motorcars, LLC. v. Navarro,

584 U.S. 79 (2018) . . . . . . . . . . . . . . . . . . . . . . . . 3, 5, 12

Grogan v. Garner,

498 U.S. 279 (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Halo Elecs., Inc. v. Pulse Elecs., Inc.,

579 U.S. 93 (2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Herman & MacLean v. Huddleston,

459 U.S. 375 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

iv

Cited Authorities

Page

Jennings v. Rodriguez,

583 U.S. 281 (2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Jewel Tea Co. v. Williams,

118 F.2d 202 (10th Cir. 1941) . . . . . . . . . . . . . . . . . . . . 9

King v. Burwell,

576 U.S. 473 (2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Price Waterhouse v. Hopkins,

490 U.S. 228 (1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Russello v. United States,

464 U.S. 16 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Santosky v. Kramer,

455 U.S. 745 (1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Schneiderman v. United States,

320 U.S. 118 (1943) . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

United States v. Hansen,

599 U.S. 762 (2023) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

United States v. Santos,

553 U.S. 507 (2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

United States v. Wong Kim Bo,

472 F.2d 720 (5th Cir. 1972) . . . . . . . . . . . . . . . . . . . . 12

v

Cited Authorities

Page

Woodby v. INS,

385 U.S. 276 (1966) . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Yi v. Sterling Collision Ctrs., Inc.,

480 F.3d 505 (7th Cir. 2007) . . . . . . . . . . . . . . . . . . . . 14

Constitution, Statutes and Regulations:

29 U.S.C. § 213(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 4

29 C.F.R. § 541.500(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

29 C.F.R. § 541.700(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

89 Fed. Reg. 32,855 (Apr. 26, 2024) (to be codified

at 29 C.F.R. § 541) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Other Authorities:

2024 Cross-Industry Compensation & Benefits

Survey, National Association of WholesalerDistributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 8

Admin. Off. of the U.S. Cts., U.S. District Courts –

Civil Cases Filed, by Nature of Suit, tbl. 4.4

(Sept. 30, 2022), https://tinyurl.com/wvvvmjcc . . . . 11

Antonin Scalia & Bryan A. Garner, Reading

Law: The Legal Interpretation of Legal Texts,

(2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 13-14

vi

Cited Authorities

Page

Executive, Administrative, Professional . . .

Outside Salesman Redefined, Wage and Hour

Division, U.S. Department of Labor, Report

and Recommendations of the Presiding Officer

(Harold Stein) at Hearings Preliminary to

Redefinition (Oct. 10, 1940) (“Stein Report”) . . . . . . 9

Samir Majumdar, What is Outside Sales? Everything

You Need to Know in 2024, Veloxy (May 21, 2024),

https://veloxy.io/what-is-outside-sales/ . . . . . . . . 5, 6, 7

The Sales Incentive Compensation Act: Before

the Subcomm. on Workforce Protections of

the House Committee on Education and the

Workforce, 107th Cong. (2001) (statement

of Christine L. Owens, Deputy Director,

AFL-CIO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Will Kenton, Outside Sales: What They Are,

How They Work, Investopedia (July 28, 2021),

https://tinyurl.com/ywytr254 . . . . . . . . . . . . . . . 5, 6, 7

1

INTEREST OF AMICI CURIAE1

National Association of Wholesaler-Distributors

(“NAW”) is an employer and a non-profit, non-stock,

incorporated trade association that represents the

wholesale distribution industry—the essential link in

the supply chain between manufacturers and retailers as

well as commercial, institutional, and governmental end

users. NAW is made up of direct member companies and

a federation of national, regional, and state associations

across 19 commodity lines of trade which together include

approximately 35,000 companies operating nearly 150,000

locations throughout the nation. The overwhelming

majority of wholesaler distributors are small-to-mediumsize, closely held businesses. As an industry, wholesale

distribution generates more than $8 trillion in annual sales

volume providing stable and well-paying jobs to more than

6 million workers.

T he Int er nat iona l Foodser v ice Dist r ibut ors

Association (“IFDA”) is the premier trade association

representing foodservice distributors throughout the

United States. IFDA members play a crucial role in the

foodservice supply chain, delivering food and related

products to restaurants, K-12 schools, hospitals and care

facilities, hotels and resorts, U.S. military bases and

government facilities, and other operations that make

1. No counsel for a party authored this brief in whole or

in part, and no counsel or party made a monetary contribution

intended to fund the preparation or submission of this brief.

Counsel for Amici Curiae provided notice to counsel for parties

of its intent to file this brief on August 8, 2024. No person other

than Amici Curiae, its members, or its counsel made a monetary

contribution to its preparation or submission.

2

meals away from home possible. The industry generates

$382 billion in sales, employs 431,000 people, and operates

17,100 distribution centers in all fifty states and the

District of Columbia.

INTRODUCTION AND SUMMARY OF

ARGUMENT

Employees who engage in outside sales play an

essential role in business operations. Their distinct role

in the corporate world involves working autonomously

outside the formal office setting and beyond the traditional

nine-to-five workday. Business owners describe outside

salespeople as individuals who are “always working”

as they need to be “on call” to answer the needs of the

clients they serve. Taking a business call on a weekend

or at odd hours is often the norm for outside salespeople.

The nature of their work means that tracking their hours

and tying them to traditional salary or pay structures are

often impracticable or unworkable. They are incredibly

valuable to their employers, often generating millions

in revenue and enjoying almost unlimited earnings

potential. This is why, since the passage of the Fair Labor

Standards Act (“FLSA” or “Act”), outside salespeople

have been exempt from the Act’s minimum wage and

overtime provisions. 29 U.S.C. § 213(a)(1). Without these

exemptions, businesses that rely on outside salespeople

would be unable to operate.

The Fourth Circuit, as the lone jurisdiction that applies

the heightened clear and convincing evidentiary standard

for determining entitlement to an FLSA exemption, places

an undue burden on businesses. This case shows that

application of a specific evidentiary standard often decides

3

who will prevail when litigating whether an employee falls

under the FLSA’s outside salesperson exemption. If the

Court were to universally impose the higher evidentiary

standard currently used by the Fourth Circuit, millions

of businesses and hundreds of thousands of employees

will be harmed. In the near term, businesses relying on

outside salespeople will likely reduce their workforce (in

anticipation of heightened costs) or redesignate outside

salespeople as 1099 independent contractors. Over the

long term, businesses will no longer operate without the

revenue generated by their outside sales workforce.

In the wake of the Court’s decision in Encino

Motorcars v. Navarro, the Court should now apply a fair

reading to the FLSA’s exemptions that will control in

all cases – including in those coming before the Fourth

Circuit. And in the absence of any statutory or regulatory

obligation to apply the clear and convincing standard,

the default and commonly used preponderance of the

evidence standard should apply. The clear and convincing

evidentiary standard is an extraordinary burden,

reserved for rare cases involving unusual, non-monetary

relief – it should not apply in disputes on the applicability

of FLSA’s exemption provisions.

Reversing the Fourth Circuit’s decision will correct

three legal errors resulting from the lower court’s decision.

First, it will rectify the current 6-1 circuit split; second,

it will mandate that the default evidentiary standard of

preponderance of the evidence controls when an employer

must prove that a given employee falls under any of the

FLSA’s exemptions; third, it will bring consistency and

certainty to businesses that rely on the FLSA’s exemption

to employ workers who play a unique and integral role in

ensuring the viability of their respective employers.

4

ARGUMENT

Individuals employed in the capacity of an outside

salesperson are exempt from the Act’s minimum wage

and overtime provisions. 29 U.S.C. § 213(a)(1). Congress

has specifically delegated to the Secretary of Labor the

authority to define an outside salesperson. Id. In turn,

the Secretary considers an “employee employed in the

capacity of outside salesman” as one “[w]hose primary duty

is making sales within the meaning of the Act, or obtaining

orders or contracts for services or for the use of facilities

for which a consideration will be paid by the client or

customer” and “who is customarily and regularly engaged

away from the employer’s place or places of business in

performing such primary duty.” 29 C.F.R. § 541.500(a).

And, under this regulation, “an outside [salesperson] is

any employee whose primary duty is making any sale,

exchange, contract to sell, consignment for sale, shipment

for sale, or other disposition.” Christopher v. SmithKline

Beecham Corp., 567 U.S. 142, 148 (2012). The Secretary

defines “primary duty” as “the principal, main, major

or most important duty that the employee performs.”

29 C.F.R. § 541.700(a). Determinations regarding FLSA

exemptions are “based on all the facts in a particular

case.” Id.

This statutory and regulatory exemption serves a

necessary and important purpose: if outside salespeople

are subject to minimum wage and overtime provisions,

employers will have little recourse but to eliminate these

positions. Put simply, the unique role played by outside

salespeople requires exemption from the overtime and

minimum wage provisions of the FLSA.

5

Employers should be subject to the same evidentiary

standards as typical litigants when establishing whether

a given employee or group of employees falls within the

outside sales exemption. There is nothing in the FLSA

indicating that Congress intended for courts to use the

higher clear and convincing standard. And now, after the

Court’s decision in Encino Motorcars, under a fair reading

interpretation of the FLSA’s exemption provisions, the

default civil preponderance of the evidence standard

should apply.

A.

Outside salespeople play a unique and

integral role in business operations that

justifies exemption from FLSA’s overtime and

minimum wage provisions.

“Outside sales” refers “to the sales of products or

services by sales personnel that physically go out into

the field to meet with prospective customers.” Will

Kenton, Outside Sales: What They Are, How They

Work, Investopedia (July 28, 2021), https://tinyurl.com/

ywytr254. It “involves the practice of selling products and

services through direct, in-person interactions.” Samir

Majumdar, What is Outside Sales? Everything You Need

to Know in 2024, Veloxy (May 21, 2024), https://veloxy.

io/what-is-outside-sales/. Outside salespeople “tend to

work autonomously outside of a formal office setting or a

formal team environment.” Kenton, supra. Their typical

workday is spent on the road traveling to meet in-person

with clients or potential clients. An outside salesperson

tends “to work without a formalized schedule” that offers

flexibility. Id. This flexibility, though, means that the

outside salesperson must be “always on call to meet the

demands of a customer.” Id. Sometimes their workday

6

begins on the road as early as 6:00 AM – meeting with

clients or potential clients. Other times, the workday

extends well into the evening as the outside salesperson

takes clients or potential clients to dinner. Outside

salespeople often attend sales conventions, pitching their

products to an audience of hundreds. In many companies

they have no set hours, working as many as eighty hours

one week and very few hours the next.

As part of their daily workday, outside salespeople

typically maintain “a schedule of client meetings” and

should be ready to meet and adjust their workflow to the

client’s demands. Id. They routinely engage in direct

sales at conferences, trade shows, and customer offices

and often travel to meet with customers to “strengthen

relationships and close deals.” Majumdar, supra.

Independence and initiative are desirable traits for an

outside salesperson. Consistent with this independence,

they are often given the same level of authority as

management-level employees. This authority is necessary

to ensure outside salespeople have the flexibility to

negotiate high-value sales contracts and extend credit to

clients. They enjoy high levels of trust. In some companies,

outside salespeople generate millions in revenue and have

almost unlimited earnings potential. And, in general, they

are well compensated. For example, a survey sponsored

by Amicus Curiae NAW found the average compensation

of an outside salesperson in the distribution industry for

the year 2023 was $87,406 annually. 2024 Cross-Industry

Compensation & Benefits Survey, National Association

of Wholesaler-Distributors.

7

Developing relationships with potential clients and

maintaining those relationships takes time. It is crucial

that outside salespeople nurture relationships with

customers and potential customers. Employers thus

expect an outside salesperson to be ready to network

“at all times.” Kenton, supra. These individuals are

“deeply involved in every step of the sales process, from

prospecting to closing. . . .” Majumdar, supra. They

need to be proficient in all aspects of the business they

represent and be prepared to answer any questions posed

by customers or potential customers.

These characteristics justify an outside salesperson’s

exemption from the FLSA’s minimum wage and overtime

rules. Employers also value the relationships that their

outside salespeople develop with clients and customers. In

the best scenarios, these relationships evolve into lasting

friendships. But, in those cases, work and personal time

intermingle. Expecting those salespeople to differentiate

between leisure and professional time borders on the

absurd. Imagine a scenario where an outside salesperson

takes a joint vacation with a friend who is also a client.

This individual should not be expected to itemize the hours

or minutes he spent closing a sales transaction with his

friend/client while enjoying leisure time.

In short, outside salespeople are highly valued

employees who operate with a degree of trust. Employers

agree that the best outside salespeople are flexible and

independent workers who take time to maintain existing

client relationships and develop new ones. Thus, tracking

and delineating hours spent engaging in sales is next to

impossible as a given sale, or activities leading to a sale,

can occur at any time.

8

Subjecting employers, therefore, to a heightened

standard of proof when attempting to exempt these

employees from FLSA’s minimum wage and overtime

provisions means that employers will no longer be able to

give outside workers the flexibility necessary to adequately

do their jobs. And the results could be catastrophic for

business: If an employer has to meet a higher evidentiary

standard, the employer will simply minimize exposure by

eliminating outside sales positions or convert their outside

sales staff to 1099 independent contractors. This change

in employment status will also deprive outside salespeople

from benefits such as health insurance and retirement.

Exempting outside salespeople from overtime and

minimum wage provisions allows employers to vary how

they design and implement compensation structures.

Some employers condition compensation on commissions

and others use a salary-commission hybrid. Others utilize

a salary-based structure while others integrate bonuses

into compensation. 2

2. Amicus Curiae NAW’s most recent sur vey of the

distribution industry reports that 48.9% of outside salespeople are

compensated via salary plus commission; 25.3% are compensated

via salary, commission, and bonus or contest award; 12.1% are

compensated via salary plus bonus or contest award; 6.1% are

compensated via draw and commission; and 4.1% are compensated

via commission only. 2024 Cross-Industry Compensation &

Benefits Survey, National Association of Wholesaler-Distributors.

9

B. Cour ts, the Depa r tment of Labor, and

organized labor all recognize the unique role

played by outside salespeople and the need

to exempt them from FLSA’s overtime and

minimum wage provisions.

The reasoning for exempting outside salespeople from

the FLSA’s overtime and minimum wage provisions is

summarized in Jewel Tea Co. v. Williams:

Such salesman, to a great extent, works

i nd iv idua l ly. T here a re no rest r ictions

respecting the time he shall work and he can

earn as much or as little, within the range of

his ability, as his ambition dictates. In lieu of

overtime, he ordinarily receives commissions as

extra compensation. He works away from his

employer’s place of business, is not subject to

the personal supervision of his employer, and

his employer has no way of knowing the number

of hours he works per day.

Jewel Tea Co. v. Williams, 118 F.2d 202, 207-208 (10th

Cir. 1941).

As to application of overtime pay, the court concludes,

“[t]o apply hourly standards primarily devised for an

employee on a fixed hourly wage is incompatible with the

individual character of the work of an outside salesman.”

Id. at 208. Recognizing the unique role of the outside

salesperson proved instructive in applying the exemption.

The Department of Labor has also long recognized the

unique role outside salespeople play in the business world.

10

Shortly after the FLSA’s enactment, the Department’s

Wage and Hour Division (“WHD”) held extensive hearings

on issuing a preliminary definition of what constituted an

outside salesman. WHD noted that an outside salesman

“customarily and regularly performs his work away from

his employer’s place or places of business” and “is one

who makes his sales at his customer’s place of business.”

Executive, Administrative, Professional . . . Outside

Salesman Redefined, Wage and Hour Division, U.S.

Department of Labor, Report and Recommendations

of the Presiding Officer (Harold Stein) at Hearings

Preliminary to Redefinition (Oct. 10, 1940) (“Stein

Report”). When weighing whether to include non-sales

related activities such as attendance at a sales conference

or travel, the Division noted that such work was integral

and therefore fell within the ambit of the exemption. Id.

The Division concluded, “it appears proper to consider as

part of outside sales, all time spent by the outside salesman

in work performed incidental to and in conjunction with

his outside sales.” Id.

Indeed, section 13(1)’s exemptions are premised

on the belief that “the type of work exempt employees

perform is difficult to standardize to any time frame and

cannot be easily spread to other workers after 40 hours

in a week. . . .” 89 Fed. Reg. 32,855 (Apr. 26, 2024) (to

be codified at 29 C.F.R. § 541). Again, this is, in part,

an acknowledgment of the special role played by outside

salespeople and the need for those individuals to be exempt

from the FLSA’s overtime provisions. Outside sales jobs

are built on the relationships they maintain with clients.

Such relationships are not easily replicable if the outside

salesperson leaves the business, as their role in a company

cannot be pigeonholed into a typical nine-to-five, fortyhour work week.

11

Labor leaders agree that the unique role outside

salespeople play necessitates an FLSA exemption.

Testifying before the U.S. House of Representative’s

Subcommittee on Workforce Protections, an AFLCIO official stated, “Congress believed it was both

unreasonable and unfair to expect employers to satisfy

minimum wage and overtime requirements for employees,

when employers had no practical way to know how many

hours these employees worked, and no real power to

control their hours.” The Sales Incentive Compensation

Act: Before the Subcomm. on Workforce Protections of

the House Committee on Education and the Workforce,

107th Cong. (2001) (statement of Christine L. Owens,

Deputy Director, AFL-CIO). Therefore, “[e]xempting

‘outside sales’ workers from minimum wage and overtime

requirements was thus a fair reasonable accommodation

to a practical reality created by the nature of the job.” Id.

FLSA exemption cases constitute a significant

percentage of all labor lawsuits. See Admin. Off. of the

U.S. Cts., U.S. District Courts – Civil Cases Filed, by

Nature of Suit tbl. 4.4 (Sept. 30, 2022), https://tinyurl.

com/wvvvmjcc. Obligating employers to demonstrate, by

clear and convincing evidence, that a given employee is an

outside salesperson will impose an untenable burden on

employers. It will invariably result in termination of these

positions and possible cessation of all business activities as

companies will no longer have the benefit of maintaining

a flexible and client-centric workforce.

12

C.

Courts are to apply a fair reading approach

when determining the applicability of the

FLSA’s overtime and minimum wage provisions.

In Encino Motorcars, the Court rejected the narrow

construction approach in favor of a fair reading approach

when interpreting exceptions to the FLSA’s overtime

and minimum wage provisions. 584 U.S. 79, 89 (2018).

Noting that the FLSA “gives no ‘textual indication’ that

its exemptions should be construed narrowly,” the Court

reasoned that these “exceptions are as much a part of the

FLSA’s purpose as the overtime-pay requirement.” Thus,

“‘there is no reason to give [them] anything other than a

fair (rather than a ‘narrow’) interpretation.’” Id. at 89

(quoting Antonin Scalia & Bryan A. Garner, Reading

Law: The Legal Interpretation of Legal Texts, 363 (2012)).

The fair reading approach is the default, textualist

method of int er preting a statut e, except where

“textual interactions” would lead one to take a “narrow

construction.” Scalia & Garner, supra at xviii, 363.

Under the fair reading approach, one asks “what did

the statute mean to a reasonable, competent reader at

the time a statute was issued?” Id. at 33. It “demands

a fair understanding of the legislative plan” when the

statute was originally enacted. King v. Burwell, 576

U.S. 473, 498 (2015); See also Scalia & Garner, supra at

33. The fair reading approach assumes “that Congress

acts intentionally and purposely” in drafting laws so that

every word is significant and none is irrelevant. Russello

v. United States, 464 U.S. 16, 23 (1983) (quoting United

States v. Wong Kim Bo, 472 F.2d 720, 722 (5th Cir. 1972)).

13

In contrast, application of the narrow construction

approach is much less common than application of the

fair reading approach. Narrow construction is applied

where there is a perceived discrepancy in power between

litigants such as in suits against the government or when

fundamental constitutional rights are at issue. See

United States v. Santos, 553 U.S. 507, 514 (2008). The

narrow construction approach, more than the fair reading

approach, depends on the particular circumstances of the

case, the kind of which are not present in this case.

For example, the Court uses a narrow construction

for interpreting some tax and speech regulation penalties.

See Bittner v. United States, 598 U.S. 85, 101 (2023)

(quoting Commissioner v. Acker, 361 U.S. 87, 91 (1959));

United States v. Hansen, 599 U.S. 762; See also United

States v. Hansen, 599 U.S. at 792 (2023) (Jackson, J.,

dissenting). It may also be used when the case impacts

the infringement of constitutional rights so the Court

may avoid such concerns. See Jennings v. Rodriguez, 583

U.S. 281, 298, 304 (2018); See also Jennings v. Rodriguez,

583 U.S. at 318-319 (Thomas, J., concurring). This is

especially true in federal criminal cases, where “if two

rational readings are possible, the one with the less harsh

treatment of the defendant prevails.” Scalia & Garner,

supra at 296; See also Dubin v. United States, 599 U.S.

110, 126, 131 (2023).

The Court’s fair reading approach requires “the

interpretation that would be given to a text by a reasonable

reader, fully competent in the language, who seeks to

understand what the text meant at its adoption, and who

considers the purpose of the text but derives purpose

from the words actually used.” Scalia & Garner, supra

14

at 428. Alternatively, the Court’s narrow construction

approach requires a literal interpretation of the exact

words of a statute, emphasizing distinct words or phrases

that narrow a statute’s (or statute section’s) scope.

Under a fair reading, a trier of fact is obligated to

use the default preponderance of the evidence standard

when determining applicability of the FLSA’s exemption

provisions. Courts will only use the clear and convincing

standard when there is some basis in law. Halo Elecs., Inc.

v. Pulse Elecs., Inc., 579 U.S. 93, 107 (2016). And nothing in

the FLSA, “the regulations under it, or the law of evidence

justifies imposing [the higher evidentiary standard].” Yi

v. Sterling Collision Ctrs., Inc., 480 F.3d 505, 506 (7th Cir.

2007). Application of the higher evidentiary standard is

limited to cases where “particularly important individual

interests or rights are at stake.” Grogan v. Garner,

498 U.S. 279, 286 (1991) (quoting Herman & MacLean

v. Huddleston, 459 U.S. 389-390 (1983)). As noted by

Judge Posner, “[t]he exemption from the FLSA’s overtime

provision. . . . curtails no greater individual interest or

right than the right to a discharge in bankruptcy, at

issue in Grogan where the Supreme Court rejected a

requirement that a creditor prove by clear and convincing

evidence his entitlement to an exception. . . .” Yi, 480 F.3d

at 507-508.

Further, universal application of the preponderance of

the evidence standard (rather than clear and convincing)

will avoid the likelihood of far-reaching consequences.

Preponderance of the evidence is the standard in six

circuits, with the higher standard being applicable in

only the Fourth Circuit. Imposing a higher standard

in these courts would invite new litigation as employees

15

would invariably challenge their status as outside sales

employees, subject to the FLSA’s exemption.

In contrast, a decision reversing the lower court’s

decision will simply maintain the status quo in these six

circuits and bring the Fourth Circuit into line.

D.

Application of the clear and convincing

standard is the rare exception reserved for a

handful of cases where the litigants seek more

than monetary damages.

Courts have long recognized preponderance of the

evidence as the default evidentiary standard in ordinary

civil trials. While the heightened clear and convincing

standard is used in some civil cases, the lower standard

of preponderance of the evidence is generally used in the

“typical civil case involving a monetary dispute between

the parties.” Addington v. Texas, 441 U.S. 418, 423 (1979).

In these cases, “[t]he litigants thus share the risk of error

in roughly equal fashion.” Id. The clear and convincing

standard (or some variation) may apply in cases “involving

allegations of fraud or some other quasi-criminal

wrongdoing by the defendant.” Id. at 424. Courts will use

it only when the interests at stake “are deemed to be more

substantial than mere loss of money.” Id. In other words,

“exceptions [to the preponderance of the evidence standard]

are uncommon, and in fact are ordinarily recognized only

when the government seeks to take unusual coercive

action -- action more dramatic than entering an award of

money damages or other conventional relief -- against an

individual.” Price Waterhouse v. Hopkins, 490 U.S. 228,

253 (1989). These types of cases include termination of

parental rights, Santosky v. Kramer, 455 U.S. 745 (1982);

16

involuntary commitment, Addington v. Texas, 441 U.S.

418; deportation, Woodby v. INS, 385 U.S. 276 (1966); and

denaturalization, Schneiderman v. United States, 320

U.S. 118 (1943).

A dispute where one party seeks overtime wage

compensation involves a “monetary dispute,” thus

necessitating the typical standard of proof. Requiring

employers to establish exemption applicability beyond the

preponderance of the evidence standard tips the balance

against businesses and harms their outside salespeople.

CONCLUSION

For these reasons, the Court should reverse the

decision of the lower court.

Respectfully submitted,

Richard P. Hutchison

Michael J. O’Neill

Landmark Legal

Counsel of Record

Foundation

Matthew C. Forys

3100 Broadway, Suite 1210 Landmark Legal

Kansas City, MO 64111

Foundation

19415 Deerfield Avenue,

Suite 312

Leesburg, VA 20176

(703) 554-6100

mike@landmarklegal.org

Attorneys for Amici Curiae