Agencies Need Not Engage In Notice-And-Comment For Interpretive Rule Changes

Employers hoping the U.S. Supreme Court would rein in federal agency rulemaking will be disappointed by the Court's opinion in Perez v. Mortgage Bankers Association issued this morning.  In the decision, which was consolidated with Nickols v. Mortgage Bankers Association, the Court held that agencies do not need to provide notice to the public and solicit input before reversing course on their own interpretive guidance. 

There are two types of federal agency rules: legislative and interpretive. Under the Administrative Procedure Act (APA), legislative rules have the force and effect of law, and are therefore binding on employers. These types of rules are subject to traditional notice-and-comment periods, during which the agency publishes a notice of proposed rulemaking in the Federal Register, and stakeholders are invited to provide input on the proposal. Agencies are required to take all comments into consideration in formulating the final rule, and any amendments