The E.M.D. Suit: A Misclassification Complaint that Reshaped Overtime Exemption Disputes

The E.M.D Sales, Inc. v. Carrera case went all the way to the U.S. Supreme Court, where the Court's 2025 decision reshaped how overtime exemption disputes are proven under the FLSA (Fair Labor Standards Act). At the center of the case is whether workers classified as “outside sales” were improperly denied overtime, and what level of proof employers must meet to defend an exemption.

The Supreme Court case, E.M.D. Sales Inc. v. Carrera arose from an FLSA overtime lawsuit originally filed in Maryland (U.S. District Court for the District of Maryland).

Case: Carrera v. E.M.D. Sales, Inc.

Court: U.S. District Court, District of Maryland

Case No.: 1:17-cv-03066-JKB

Where the Case Started: District Court

The case began as an overtime lawsuit filed in 2017 in the U.S. District Court for the District of Maryland: Carrera et al. v. E.M.D. Sales, Inc. et al., Civil No. JKB-17-3066 (1:17-cv-03066). The plaintiffs, Faustino Sanchez Carrera, Magdaleno Gervacio, and Jesus David Muro, worked as sales representatives. The group sued their employer and its CEO, claiming they failed to pay overtime wages (violating the Fair Labor Standards Act (FLSA)). However, E.M.D. argued the workers were exempt as “outside salesmen.”

The Two Parties in the Case: Carrera v. E.M.D. Sales, Inc.

The plaintiffs who originally filed the suit are Faustino Sanchez Carrera, Jesus David Muro, and Magdaleno Gervacio, who worked as sales representatives for E.M.D. Sales. The plaintiffs alleged they regularly worked more than 40 hours in one week but were denied overtime pay, a practice that violates the Fair Labor Standards Act (FLSA). The defendants are E.M.D. Sales, Inc., a food-products distributor, and its CEO, Elda M. Devarie. The company maintained that the plaintiffs were properly treated as exempt “outside sales” employees and therefore not entitled to overtime under the FLSA.

After the Bench Trial: Circuit Court

After the bench trial in March 2021, the district court ruled in favor of the employees, finding that E.M.D. failed to meet the clear-and-convincing standard for the outside sales exemption under that circuit's law. Both parties appealed to the U.S. Court of Appeals for the Fourth Circuit. The Fourth Circuit affirmed and maintained the heightened proof standard (U.S. Court of Appeals for the Fourth Circuit, Case Nos.: 21-1897 and 21-1924).

Petitioning the U.S. Supreme Court:

After the Fourth Circuit affirmed and maintained the District Court’s decision in E.M.D. Sales, Inc. v. Carrera, E.M.D. petitioned the U.S. Supreme Court, which granted certiorari (June 17, 2024), heard argument (November 5, 2024), and decided the case (January 15, 2025). In doing so, the U.S. Supreme Court held that employers need only prove FLSA exemptions by a preponderance of the evidence.

The Main Question in the Case:

The central legal question was what burden of proof an employer must meet to establish that an employee falls within an exemption to the Fair Labor Standards Act (FLSA). Here, the “outside sales” exemption is used to deny overtime pay. Specifically, the Supreme Court addressed whether an employer must prove an exemption by clear and convincing evidence (a heightened standard applied by the Fourth Circuit) or by the ordinary civil standard, preponderance of the evidence.

A Summary of the Allegations in the Case:

The plaintiffs—three sales representatives—alleged that E.M.D. Sales denied them overtime pay required by the Fair Labor Standards Act (FLSA), even though they routinely worked more than 40 hours per week. They contended their day-to-day work did not fit the “outside sales” exemption because much of their time was spent on non-exempt tasks tied to servicing existing accounts (rather than primarily making sales away from the employer’s place of business).

E.M.D. Sales disputed the claim and maintained the workers were properly classified as exempt outside sales employees, meaning the company argued overtime was not owed under the FLSA.

FAQ: E.M.D. Sales Inc. v. Carrera

Q: What is the “outside sales” exemption under the FLSA?

A: It is an overtime exemption that can apply when an employee’s primary duty is making sales (or obtaining orders/contracts), and the employee is customarily and regularly working away from the employer’s place of business.

Q: In E.M.D.Sales, Inc. v. Carrera: What was the Supreme Court’s decision?

A: The Court held that employers must prove exemptions under FLSA using the ordinary civil standard (preponderance of the evidence) rather than a heightened clear and convincing standard.

Q: Did the decision in this case result in a change to the definition of “outside sales exemption?”

A: No, the definition of “outside sales exemption” remained the same. However, the Court’s decision addressed the strength of evidence the employer must provide to establish that an exemption applies.

Q: What is the practical meaning of “preponderance of the evidence”?

A: This phrase means the employer must show it is more likely than not that the exemption applies based on the evidence presented in the case.

Q: What should employees and employers take away from this case?

A: Employees should understand that exemption disputes are heavily fact-driven (what the job actually requires day-to-day). Employers should ensure that job duties, supervision, and documentation align with any exemption they rely on, because they still bear the burden of proving it.

If you believe you were misclassified as exempt and denied overtime pay, or you were not paid for all hours worked, the employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can evaluate your wage-and-hour claims and explain your options. Contact the firm’s offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, or Chicago to discuss how you may be able to recover unpaid wages and pursue accountability under the law.