U.S. Supreme Court Issues Opinion in Wage-and-Hour Case

Justice Sonia Sotomayor delivered the long-awaited opinion today in Perez v. Mortgage Bankers Assoc., et al. (U.S. 2015).

The Court considered whether the Administrative Procedure Act (APA) had been violated by the U.S. Department of Labor’s Wage and Hour Division (DOL). The DOL issued an opinion letter in 2006 finding that mortgage loan officers fell within the administrative exemption to minimum wage and overtime pay under the Fair Labor Standards Act (FLSA). It withdrew that opinion in 2010, concluding that mortgage loan officers did not qualify for the administrative exemption.

Mortgage Bankers Association argued that the DOL lacked the authority to significantly change a prior interpretation without following the APA’s notice-and-comment procedures.

Noting that the APA specifically exempts interpretive rules from notice-and-comment requirements, the Court upheld the DOL’s actions, reasoning that “because an agency is not required to use notice-and-comment procedures to issue an initial interpretive rule, it is also not required to use those procedures to amend or repeal that rule.”

In addition to upholding the DOL’s stance on mortgage loan officers and the administrative exemption, the decision clarifies the DOL’s broad powers in interpreting the FLSA.