Mortgage Bankers Association v. Harris

Under the Fair Labor Standards Act (FLSA), employees working more than 40 hours per week were entitled to overtime pay. There were many exceptions to this rule, including executive, administrative, or professional employees. In 2006, the Department of Labor (DOL) (defendant) issued an opinion letter stating that mortgage loan officers were within the administrative exception to the overtime law. Then, in 2010, the DOL’s Deputy Administrator issued an Administrator’s Interpretation withdrawing the opinion letter and stating that mortgage loan officers did not fall within the exception. The Mortgage Bankers Association (MBA) (plaintiff) brought suit challenging the Administrator’s Interpretation. The MBA claimed that the Administrator’s Interpretation was a “definitive interpretation” and that under the Administrative Procedure Act, the DOL could not change its interpretation of the FLSA without going through a notice and comment rulemaking. The DOL conceded that the Administrator’s Interpretation was definitive, but claimed that regulated entities’ reliance on an agency’s interpretation is a distinct requirement—independent of a definitiveness analysis—necessary for a court to determine whether notice and comment rulemaking is necessary. The DOL conceded that if reliance was not a distinct requirement, the MBA would prevail. The MBA filed a motion for summary judgment, which the district court denied. The MBA appealed.