Overtime Status of Loan Officers Faces Review

WASHINGTON (CN) - The Supreme Court on Monday agreed to consider the D.C. Circuit's findings with regard to how the Labor Department classifies mortgage loan officers.

At issue is whether these officers are "employed in a bona fide executive, administrative, or professional capacity," and thus exempt from a federal requirement that they earn overtime wages if they work longer than 40 hours a week.

Though the Department of Labor issued an opinion letter in 2006 that said mortgage loan officers with archetypal job duties fell within the administrative exemption, Deputy Administrator Nancy Leppink's 2010 interpretation of that opinion declared otherwise.

Mortgage Bankers Association, a trade group, challenged that 2010 pronouncement based on its claim that the Administrative Procedures Act requires notice-and-comment before an agency can change its "definitive interpretation."

A federal judge sided with the agency, but the D.C. Circuit reversed last summer, looking at the narrow question of reliance.

"We disagree with the suggestion that the only way to protect agencies from inadvertently locking in disfavored, informally promulgated positions is to impose a separate and independent reliance element," the decision states. "Practically speaking, reliance considered as part of the definitiveness determination will more than adequately protect agencies from this ossification threat. We thus decline DOL's invitation to spin a third requirement from whole cloth. Emphatically, that is an issue for the full court to take up at its discretion, not this three-judge panel.

"In view of the government's concession that the case need go no further than this, we reverse the District Court order denying MBA's Motion for Summary Judgment and remand the case with instructions to vacate DOL's 2010 administrator interpretation."

The Supreme Court granted two related writs of certiorari Monday and consolidated the cases for a one-hour oral argument. Per their custom, the justices did not otherwise comment on the case.

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