Much attention has been paid to the Department of Labor’s March 2010 Administrative Interpretation, which reversed prior DOL opinions and stated that mortgage loan officers do not qualify for the administrative exemption under the FLSA. The Mortgage Bankers Association has filed a lawsuit seeking to invalidate the interpretation as a violation of the Administrative Procedures Act. While that case remains pending in federal court in Washington, D.C, another federal court in Ohio has analyzed the validity of the Administrative Interpretation, at the behest of a defendant bank seeking to defend its exempt classification of loan officers. Lewis v. Huntington Nat’l Bank, 2012 U.S. Dist. LEXIS 32166 (S.D. Ohio Mar. 12, 2012).
In Lewis, the defendant bank proffered two bases, on a motion for summary judgment, for upholding the exempt status of the bank’s loan officers, though neither theory was premised on a ruling that their loan officers expressly met the exempt status test. First, the bank asked the court to rule that, even if loan officers are not ultimately exempt under the administrative exemption, the bank was entitled to rely in good faith on the DOL’s 2006 opinion letter finding loan officers exempt, pursuant to the FLSA’s “good faith” defense, 29 U.S.C. § 259. In the alternative, defendant asked the court to strike the DOL’s Administrative Interpretation as having been issued in violation of the Administrative Procedures Act. As to the first argument, the court found questions of fact existed as to the steps the bank had taken in originally classifying loan officers as exempt (a decision pre-dating the 2006 opinion letter), and also as to the question of whether the defendant’s “actual circumstances matched the circumstances described in the  Letter.” In regard to the validity of the Administrative Interpretation, the court found that, under the APA, it was “well-within [the DOL’s] discretion to issue Opinion Letters and Administrator’s Interpretations of the FLSA Regulations,” and also ruled that the Administrative Interpretation is not “inconsistent with the [DOL’s] administratively exemption [sic] regulation.”
The Lewis decision reflects the unfortunate circumstance in which employers of loan officers find themselves in the wake of conflicting guidance issued by the DOL under different administrations. Industry employers will continue to wrestle with classification decisions concerning loan officers and similar positions until clarity is provided by the appellate courts and if necessary the United States Supreme Court. Of course, state law also always must be analyzed in applying any exemptions.