U.S. Supreme Court Grants Review in Challenge to Mortgage Loan Officers' Overtime Eligibility

    WASHINGTON, DC, June 19, 2014 /24-7PressRelease/ -- The United States Supreme Court on Monday, June 16, 2014 agreed to hear an appeal brought by a group of mortgage loan officers represented by Nichols Kaster, PLLP. The employees' petition challenges a D.C. Circuit decision invalidating a 2010 Department of Labor legal interpretation which stated that mortgage loan officers are entitled to overtime compensation under federal labor law.

The 2010 guidance reinstated the government's longstanding interpretation of the law, which the Department of Labor had changed in 2006 under irregular circumstances to exempt mortgage loan officers from the labor protections such as overtime and minimum wage. The 2006 guidance reversed thirty years of interpretive rules from the Department of Labor, developed between 1971 and 2006, which afforded loan officers the right to overtime.

After the Department of Labor issued the 2010 guidance favoring employees, a group of banks, under the umbrella of the Mortgage Bankers Association, sued the Department of Labor seeking to invalidate the legal interpretation. A group of loan officers, formerly employed by Quicken Loans, Inc, and represented by Nichols Kaster, intervened in the case and won a victory in federal district court. The court dismissed the banks' claims as without legal merit.

The D.C. Circuit reversed in Mortgage Bankers Association v. Harris, 720 F.3d 966 (D.C. Cir. 2013). That court invalidated the 2010 interpretation, claiming that federal agencies must conduct public notice and comment proceedings before they change an existing interpretive rule.

In their petition to the Supreme Court, the loan officers argued that the D.C. Circuit's rule, known as the Paralyzed Veterans doctrine from Paralyzed Veterans of America v. D.C. Arena L.P., 117 F.3d 579 (D.C. Cir. 1997), has no basis in the statutory language of the law governing administrative procedure.

The Supreme Court agreed to hear the case and granted the parties one hour for oral argument. Oral arguments will take place in the Fall.

In reaction to the Supreme Court's grant of certiorari, Plaintiff's Counsel, Adam Hansen, stated, "The 2006 Opinion Letter was a decision that the Department of Labor regretted, and the government should be allowed to rectify that mistake. The Supreme Court is giving us a chance to have our arguments heard, and this is an important step to regaining important protections for employees everywhere."

Petitioners are represented by Paul J. Lukas, Rachhana T. Srey, and Adam W. Hansen from Nichols Kaster, PLLP, which has offices in Minneapolis, Minnesota and San Francisco, California, and Sundeep Hora of Alderman, Devorsetz & Hora in Washington D.C. The case is called Nickols v. Mortgage Bankers Assoc., No. 13-1052 (2014). Additional information can be found at www.nka.com.

Nichols Kaster, PLLP is a nationally recognized plaintiffs firm that focuses on representing employees and consumers whose rights have been violated. The firm was selected as a member of the National Law Journal's Litigation Boutiques Hot List, ranked as a Best Law Firm by U.S. News & World Report, and selected as a top plaintiffs' employment law firm by Law360. The firm is led by its partners, who are regularly selected by their peers as Super Lawyers, and sit on the boards of numerous professional organizations, including the National Association of Employment Lawyers, the ABA Fair Labor Standards Legislation Committee and the Council for the Minnesota State Bar Association's Consumer Litigation Section.

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