Reversing the D.C. Circuit’s 2013 opinion, the Supreme Court today held that the U.S. Department of Labor did not violate the Administrative Procedure Act (APA) when, in 2010, it issued its Administrator’s Interpretation stating that mortgage loan officers generally do not qualify for the administrative exemption without first affording the public the opportunity for notice and comment. Perez v. Mortgage Bankers Ass’n, 2015 U.S. LEXIS 1740 (U.S. 2015).
In Mortgage Bankers, the Court considered whether the Administrator’s Interpretation, by departing from the Department’s prior opinion contained in a 2006 opinion letter, had violated the APA by giving the administrative exemption “regulation a definitive interpretation, and later significantly revis[ing] that interpretation.” Paralyzed Veterans of Am. v. D. C. Arena L. P., 117 F. 3d 579 (D.C. Cir. 1997). The D.C. Circuit, the same court that had decided Paralyzed Veterans, concluded that the Administrator’s Interpretation was a violation of the APA and struck it down. The Supreme Court, in a decision authored by Justice Sotomayor, concluded it did not, rejecting Paralyzed Veterans and calling that case’s holding “contrary to the clear text of the APA’s rulemaking provisions.” Because those APA provisions required public notice and comment only where required by statute, the Paralyzed Veterans analysis imposed procedural obligations on the DOL beyond those required by law, and the Interpretation was a valid exercise of the agency’s authority to interpret the FLSA.