In 2017, Faustino Sanchez Carrera, Magdaleno Gervacio, and Jesus David Muro were all employed as sales representatives at EMD, a company that distributes international food brands—think Jarritos soda and La Preferida black beans—to grocery stores in the Washington, D.C. area. Their core work was to visit a set of grocery stores on a pre-assigned route, doing things like managing product displays, restocking or removing items as necessary, and completing sales that were largely pre-negotiated by EMD management. At the time, they regularly worked 60-hour weeks—but despite working 50 percent more hours than are in a standard work week, they did not receive overtime pay.
Carrera, Gervacio, and Muro eventually filed a lawsuit under the Fair Labor Standards Act, alleging that the company owed them unpaid wages. In 2021, following a nine-day trial, the District Court of Maryland agreed, and ordered EMD to pay $151,938.29 in unpaid wages, and the same amount in liquidated damages. The Fourth Circuit Court of Appeals upheld the ruling in 2023.
Today, seven years since the lawsuit was originally filed, Carrera, Gervacio, and Muro still have not received the pay they are due. And it’s possible they never will: On Tuesday, the Supreme Court will hear oral argument in this case, EMD v. Carrera. If EMD and their allies get their way, the case could make it even harder for workers to claim money they have rightfully earned.
The Fair Labor Standards Act (FLSA), the statute at the center of this case, was enacted in 1938 as part of President Franklin Roosevelt’s New Deal. It was a key piece of the effort to prevent employers from competing in a race to the bottom, and aimed to raise the general standard of working conditions, such that holding a job would be sufficient to maintain an employee’s financial well-being. In order to achieve this goal, Congress enacted a minimum wage, prohibited child labor, and guaranteed workers overtime pay if they worked more than 40 hours per week. Congress also determined that these protections—including the overtime pay provisions—wouldn’t apply to certain categories of “exempt” workers, including workers whose primary role is as an outside sales representative.
The basic issue in EMD v. Carrera is how hard it should be to prove that an employee falls under one of these exemptions. Under well-established precedent, it isn’t enough for employers to give someone the title of “sales rep” and say that the FLSA does not protect them; instead, a fact-specific investigation into a person’s actual duties determines the extent to which making sales is part of their job. In the case of Carrera, Gervacio, and Muro, everybody agrees that they were able to make some sales to a subset of stores on their routes, but the parties disagreed about whether making those sales was their “primary” responsibility or not.
By law, the burden of proof is on the employer—employees are assumed to be covered by the FLSA and entitled to overtime unless their employer can prove otherwise. But federal appeals courts differ about the standard: Most have said that the employer need only show by a preponderance of the evidence that an employee is exempt. Under this standard, a judge or jury only has to think that there’s a 51 percent chance—slightly more likely than not—that the employee is exempt in order to find that the FLSA’s protections don’t apply.
(Photo by Erin Schaff-Pool/Getty Images)
By contrast, the Fourth Circuit, where EMD v. Carrera was first argued, says that an employer must show by “clear and convincing evidence” that an employee is exempt. Under the Fourth Circuit’s standard, a decisionmaker doesn’t need to be absolutely certain that the employee is exempt, but they need to be pretty damn sure—say, 75 or 80 percent—that they are in fact legitimate sales representatives, not regular employees who have been given that title.
In this case, Carrera argues that the standard of proof is ultimately irrelevant, because under either standard, the facts show that the employees were not exempt and therefore are entitled to back pay: The district court found that their primary duties were not making sales, but rather servicing existing accounts and replenishing stock on sales negotiated by management. As a result, the court held that EMD did not have “objectively reasonable grounds” to think that the employees were exempt from the protections of the FLSA.
In other words, this doesn’t appear to be a case in which the factfinder thought there was only a 51 percent chance that the employees were exempt, meaning the Fourth Circuit’s heightened standard of proof was not dispositive. And even if the Supreme Court overturns the lower court’s decision, there is reason to think that the workers would prevail on remand—meaning EMD will have tied the case up in court for the better part of a decade, only to still have to pay Carrera, Gervacio, and Muro what they’re owed.
If there’s a wronged worker arguing against a corporation at the Supreme Court, though, you can be almost certain that the U.S. Chamber of Commerce will be jumping in to make sure that the law continues to serve corporations, not people. Sure enough, in this case, the Chamber and its allies have weighed in firmly on the side of EMD, arguing that the Fourth Circuit’s standard makes it too hard for businesses to avoid paying their employees overtime. They also complain that employers who fail to pay overtime wages are often required to pay large sums after litigation; what they fail to note is that this is because those employers have stolen large sums of money from their workers in violation of the law.
The arguments of the Chamber, along with other pro-business entities that have submitted amicus briefs in this case, is essentially that it’s unfair to make companies work to prove that they don’t need to pay overtime. But as lawyers for Carrera and his colleagues explain, there are immense social costs to improperly classifying workers as exempt. Not only do workers not receive money they’ve rightfully earned, but the public suffers as unscrupulous businesses gain a competitive advantage by imposing substandard working conditions on their employees.
Every year, the Supreme Court hears a handful of cases that will make headlines, and many more that won’t. Cases like EMD v. Carrera are often written off as insignificant, procedural cases that don’t actually impact real people’s lives.
But overlooking cases like this one obfuscates the harm caused by the far-right capture of the Roberts Court, where corporations win over individuals 70 percent of the time. Every time the Court makes it harder—even if just incrementally—for workers to prevail, they are sending a message about whose interests the law is designed to protect. With every wonky, procedural decision that puts employers’ bottom lines over the lives and well-being of workers, the judiciary moves further from the promise of serving equal justice under law.
