On July 11, 2012, the US Court of Appeals for the Tenth Circuit issued an opinion in Lederman v. Frontier Fire Protection, Inc., holding the preponderance of the evidence standard applies to proving an employee is exempt from the FLSA.

Gary Lederman claimed his former employer, Frontier Fire Protection, failed to pay him overtime in violation of the FLSA. At trial, Frontier argued Lederman was exempt under the FLSA as an outside salesperson. The district court instructed the jury on the preponderance of the evidence standard, but added that Frontier had the burden of proving Lederman fit "plainly and unmistakably within the terms" of the outside salesperson exemption. The jury found Lederman was not an outside salesperson and held Frontier liable to Lederman for overtime wages.

On appeal, the Tenth Circuit clarified that the "plainly and unmistakably" language in its previous cases referred to the legal standard for determining whether the claimed exemption falls "plainly and unmistakably" within the terms of the statute, not the evidentiary standard for deciding whether the exemption is met. Although the district court had referred to the preponderance of the evidence standard in its jury instructions, the Tenth Circuit reversed and remanded the case, finding the jury could have based its verdict on the wrong standard because the "plainly and unmistakably" language conflicted with the preponderance of the evidence instruction.

The Tenth Circuit's decision clarified that employers need not meet a heightened burden of proof to establish an FLSA exemption. Employers should be aware that jury instructions that include language suggesting a higher burden of proof on FLSA exemptions may be overturned on appeal even if they also instruct the jury on the appropriate preponderance of the evidence standard.

For more information on FLSA exemptions, see FLSA White Collar Exemptions Checklist.