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Supreme Court holds DOL’s reversal on loan officers’ exempt status didn’t need notice and comment

March 10th, 2015  |  Lisa Milam

By Lisa Milam-Perez, J.D.

A DOL Wage and Hour Division “Administrator Interpretation,” which reversed the agency’s stance on whether the FLSA’s administrative exemption applied to mortgage loan officers, was a valid agency interpretation notwithstanding that it was issued without undertaking notice-and-comment procedures, the Supreme Court has ruled, in one of the most significant cases in decades for federal regulatory agencies. In a unanimous decision, the High Court rejected the Mortgage Bankers Association’s challenge to the DOL’s about-face under the Administrative Procedure Act. Concluding that the plain text of the APA does not require federal agencies to undertake notice-and-comment rulemaking when merely promulgating “interpretive rules” such as the DOL issuance in dispute here, the Court reversed the D.C. Circuit’s grant of summary judgment in the industry trade group’s favor (Perez v. Mortgage Bankers Association, March 9, 2015, Sotomayor, S.).

In so ruling, the High Court resoundingly overturned the D.C. Circuit’s decision in Paralyzed Veterans of Am. v. D.C. Arena L.P., concluding that the circuit court’s 1997 ruling was contrary to the plain text of the APA and imposed procedural obligations on the agencies that went beyond what the APA requires.

The majority opinion was authored by Justice Sotomayor; separate concurring opinions were issued by Justices Alito, Scalia, and Thomas. Read more.