PEREZ v. MORTGAGE BANKERS ASSOCIATION
The Fair Labor Standards Act (FLSA) requires employers to pay overtime wages to employees who work more than 40 hours per week. However, the FLSA also provides exemptions to this overtime rule for employees, including those “employed in a bona fide executive, administrative, or professional capacity…or in the capacity of outside salesman.”
Mortgage Bankers Association (MBA) is a national trade organization that represents real estate financial companies and their employees across the country. Among these employees are mortgage loan officers, who assist prospective buyers in finding and applying for mortgage offers. In 2006, the Department of Labor issued an opinion letter that stated that mortgage loan officers’ duties fell within the definition of “administrative” and that they qualify for the exception to the overtime rule in the FLSA. In 2010, however, the Deputy Administrator issued a second pronouncement that declared that a mortgage loan officer did not qualify for the administrative employee exception. MBA sued the Department of Labor in district court and argued that the agency could not change its interpretation without first going through a notice-and-comment period required by the Administrative Procedure Act. The district court denied MBA’s motion for summary judgment. The U.S. Court of Appeals for the District of Columbia Circuit reversed and remanded the case with instructions to vacate the Department of Labor’s 2010 interpretation.
Must a federal agency engage in a notice-and-comment procedure before it can significantly alter an interpretation of a rule of agency regulation?