## Facts

- The Fair Labor Standards Act (FLSA) generally requires overtime pay, but exempts employees employed in a bona fide executive, administrative, or professional capacity.
- The Department of Labor (DOL) issued interpretive guidance over time about whether mortgage-loan officers qualify for the FLSA’s administrative exemption.
- In 2006, after issuing 2004 administrative-exemption regulations through notice-and-comment rulemaking, DOL opined in an opinion letter that mortgage-loan officers were administratively exempt.
- In 2010, without notice-and-comment procedures, DOL withdrew the 2006 opinion letter and issued an “Administrator’s Interpretation” concluding mortgage-loan officers do not qualify for the administrative exemption.
- The Mortgage Bankers Association (MBA) challenged the 2010 interpretation as procedurally invalid, arguing that a significant change in an interpretive rule required notice-and-comment rulemaking under the Administrative Procedure Act (APA).
- The district court upheld the 2010 interpretation; the D.C. Circuit reversed, applying its Paralyzed Veterans doctrine requiring notice-and-comment for significant interpretive changes.

## Issues

1. Whether the APA requires an agency to use notice-and-comment rulemaking before significantly changing an interpretive rule construing the agency’s regulations.
2. Whether courts may impose procedural requirements on agencies beyond those specified in the APA for interpretive rules.

## Decision

- The Supreme Court unanimously reversed the D.C. Circuit.
- The Court held that the APA does not require notice-and-comment procedures to issue, amend, or repeal an interpretive rule, even when the new interpretation significantly departs from prior guidance.
- The Court rejected the Paralyzed Veterans doctrine as inconsistent with the APA’s text and with the principle that courts cannot add procedural obligations beyond the APA.
- The Court did not reach MBA’s alternative claim that the 2010 interpretation was a legislative rule because that argument was not properly preserved.

## Legal Principles

- Legislative rules generally require notice-and-comment rulemaking and have the force and effect of law; interpretive rules advise the public of an agency’s construction of the statutes and rules it administers and are exempt from notice-and-comment requirements.
- APA § 553(b)(A) expressly exempts interpretive rules from notice-and-comment, and the APA does not create a different procedural regime for amending or repealing interpretive rules.
- Courts lack authority to impose additional procedural requirements on agencies beyond those required by the APA.
- Regulated parties’ reliance interests and agency changes in position are addressed primarily through substantive review, including arbitrary-and-capricious review under APA § 706(2)(A), rather than judge-made procedural requirements.

## Conclusion

The Court held that agencies may change interpretive rules without notice-and-comment rulemaking and invalidated the D.C. Circuit’s Paralyzed Veterans doctrine as contrary to the APA, leaving substantive APA review as the main constraint on agency reversals.


Perez v. Mortg. Bankers Ass’n, 575 U.S. 92 (2015)