Kicking what may prove to be a hornet’s nest, the Supreme Court unanimously agreed that the U.S. Department of Labor did not have to provide the public with notice and an opportunity to comment before reversing its position on the exempt status of loan officers under the Fair Labor Standards Act. The Court ruled that an agency is not required by the Administrative Procedures Act to use notice-andcomment procedures when issuing interpretive rules, even where a new interpretation differs substantially from or contradicts prior interpretations. Perez v. Mortgage Bankers Association, No. 13-1041 (Mar. 9, 2015).
This decision affirms the power of an administrative agency to issue interpretive rules or guidance – even if inconsistent with a prior interpretive rule or opinion – without first providing notice and an opportunity for comment. Nonetheless, the Court noted that while an agency can change position without providing a notice-and-comment period, a court justifiably may be unwilling to defer to the agency’s latest interpretation simply because it is the most recent. Such agency reversals have drawn the attention of at least four justices, who have signaled an interest in overruling the underlying doctrine of judicial deference to agency interpretive rules. Three lengthy concurring opinions in Perez highlight the issue of deference to agency interpretations as a possible violation of separation of powers that occurs when agencies are permitted both to make and interpret the law.