Mortgage Bankers Association v. Seth D. Harris, as Acting Secretary of Labor, U.S. Department of Labor, et al.

Editor's Note (6/17/14): The U.S. Supreme Court has agreed to hear an appeal of this decision.

On July 2, 2013, the United States Court of Appeals for the District of Columbia Circuit, in an appeal by the Mortgage Bankers Association (MBA) from the U. S. District Court for the District of Columbia, found for the appellant, reversed the District Court's order dismissing the MBA's motion for summary judgment, and directed the lower court to vacate a 2010 Department of Labor (DOL) Administrator Interpretation.

In 2006, the Department of Labor issued an opinion letter concluding that mortgage loan officers with typical job duties fell within the "administrative employee" exemption to the Fair Labor Standards Act requirement for overtime pay for employees working more than 40 hours per week. In 2010, Deputy DOL Administrator Nancy Leppink issued an "Administrator's Interpretation" stating that "employees who perform the typical job duties" of a mortgage loan officer "do not qualify as bona fide administrative employees." The 2010 interpretation explicitly withdrew the 2006 Opinion Letter. MBA brought the action in the District Court to argue that the DOL violated the Administrative Procedures Act (APA) when it amended, in effect, its 2006 rule without the notice and comment procedures required by the APA. The District Court denied the MBA's motion for a summary judgment.

The decision of the Court of Appeals not only reversed the lower court's order denying the request for summary judgment; it also remanded the case to the lower court with instructions to vacate the 2010 Administrator's Interpretation. The Court of Appeals did not take a position on the merits of the DOL interpretation, but directed that DOL must conduct the APA-required notice and comment rulemaking if it wishes to readopt the 2010 interpretation.

Currently, therefore, the 2006 Opinion Letter has been reinstated for the moment. The DOL may decide to move back to the 2010 rule through the notice and comment rulemaking process, so the question of overtime pay for mortgage loan officers may not have been finally settled.