## Facts

- The Fair Labor Standards Act (FLSA) requires overtime pay for work over 40 hours per week but exempts bona fide executive, administrative, and professional employees.
- In 2006, the Department of Labor (DOL) issued an opinion letter concluding mortgage loan officers qualified for the administrative exemption.
- In 2010, without notice-and-comment procedures, DOL issued an Administrator’s Interpretation withdrawing the 2006 letter and concluding mortgage loan officers generally do not qualify for the administrative exemption.
- The Mortgage Bankers Association (MBA) sued, arguing the 2010 interpretation was an unlawful change of a prior definitive agency interpretation without required Administrative Procedure Act (APA) procedures.
- The government conceded there were two definitive and conflicting agency interpretations of the same regulation but argued regulated-party reliance was a separate required element to trigger notice-and-comment under D.C. Circuit precedent.
- The district court granted summary judgment for DOL, and MBA appealed.

## Issues

1. Under the D.C. Circuit’s Paralyzed Veterans/Alaska Professional Hunters doctrine, does an agency’s significant change from a definitive interpretation of a regulation require notice-and-comment rulemaking?
2. Is regulated-party reliance a separate, independent requirement for applying that doctrine, or merely evidence relevant to whether the earlier interpretation was “definitive”?

## Decision

- The D.C. Circuit reversed the district court.
- The court held reliance is not a separate, independent requirement; it is only part of the inquiry into whether an agency interpretation is “definitive.”
- Given the government’s concession that both the 2006 and 2010 positions were definitive and conflicting, the 2010 interpretation was treated as a de facto amendment of the agency’s rule.
- The court remanded with instructions to vacate the 2010 Administrator’s Interpretation.
- The court stated it took no position on the substantive correctness of either classification and required only that DOL use notice-and-comment if it wished to reinstate the later interpretation.

## Legal Principles

- In the D.C. Circuit (at the time), when an agency gives a regulation a definitive interpretation and later significantly revises it, the change is treated as an amendment requiring APA notice-and-comment procedures.
- Reliance by regulated parties is not an independent prerequisite to applying this doctrine; it may be considered as evidence bearing on whether the prior interpretation was definitive.
- A court may resolve the definitiveness question based on an agency concession that its prior and current interpretations are both definitive and in conflict, without additional reliance findings.
- Judicial review in this setting can be limited to the procedural validity of the agency’s change, without deciding the merits of the agency’s substantive interpretation.

## Conclusion

The D.C. Circuit held that DOL could not replace a definitive regulatory interpretation with a conflicting definitive interpretation through an interpretive issuance alone; under then-controlling circuit doctrine, such a significant revision required notice-and-comment rulemaking, and reliance was not a standalone element.


Mortg. Bankers Ass’n v. Harris, 720 F.3d 966 (D.C. Cir. 2013)