Mortgage Bankers Association v. Harris

720 F.3d 966 (D.C. Cir. 2013)

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Nature of the Case

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Facts

Employers are generally required to pay overtime wages to employees who work longer than 40 hours per week. Those 'employed in a bona fide executive, administrative, or professional capacity, . . . or in the capacity of outside salesman,' for example, are exempt from the statute's minimum wage and maximum hour requirements. Whether mortgage loan officers qualify for this 'administrative exemption' is a difficult and at times contentious question. D has found itself on both sides of the debate. D issued an opinion letter concluding on the facts presented that mortgage loan officers with archetypal job duties fell within the administrative exemption. Just four years later, in 2010, D issued an 'Administrator's Interpretation' declaring that 'employees who perform the typical job duties' of the hypothetical mortgage loan officer 'do not qualify as bona fide administrative employees.' The 2010 pronouncement 'explicitly withdrew the 2006 Opinion Letter.' P challenged D's decision to change their 'definitive interpretation' without first undergoing notice-and-comment rulemaking as a violation of the APA. The court held that P must show 'substantial and justifiable reliance on a well-established agency interpretation' in order to require notice and comment rulemaking. The court then denied P's motion for summary judgment and dismissed P's substantive challenge to the 2010 interpretation as inconsistent with the agency's 2004 regulation. P appealed.