The U.S. Department of Justice (DOJ) has issued a Final Rule (the “Rule”) updating its regulations under Title VI of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, or national origin in programs and activities that receive federal funding. The Rule now requires proof of intent as the sole basis for discrimination claims, eliminating the use of statistical disparities under a so-called disparate-impact theory. By issuing the Rule, the DOJ has removed disparate-impact liability from its Title VI regulations, ending a 50-year practice that allowed civil rights enforcement agencies and courts to find actionable discrimination without evidence of explicit intent.
First codified in 1973—nearly a decade after the Civil Rights Act became law—a disparate-impact theory evaluated policies or practices that appeared neutral on their face but disproportionately harmed a protected group. Examples of such policies include a mandated height requirement that may disproportionately exclude women; a pre-employment personality test that screens out certain racial or ethnic groups at higher rates; or burdensome college degree requirements for roles that do not truly require them, which may disproportionately affect groups historically denied equal access to higher education.
In issuing the new Rule, the DOJ stated that the 1973 regulation should not stand because only intent could form the basis of a discrimination claim in the statute enacted by Congress and signed into law by the president. Accordingly, under the DOJ’s current view, disparate-impact liability was never contemplated, let alone permitted, under Title VI.
The DOJ’s decision to rescind the long-standing regulation permitting disparate-impact liability follows President Trump’s April executive order, “Restoring Equality of Opportunity and Meritocracy.” That executive order declared, in part, that “it is the policy of the United States to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible.” The executive order criticized disparate-impact liability as effectively compelling organizations to make decisions based on racial or gender quotas rather than on merit or actual business needs.
Civil rights advocates, however, have raised concerns that removing disparate-impact liability could make it more difficult to address systemic or structural discrimination that occurs through policies or practices that do not explicitly discriminate. Without the ability to challenge such practices under a disparate-impact theory, advocates fear that organizations may have fewer incentives to examine or reform policies that indirectly disadvantage women, racial and ethnic minorities, older workers, people with disabilities, and other protected groups.
Overall, the Rule represents a major shift in federal civil rights enforcement philosophy. The most immediate and practical effect is that discrimination claims under Title VI predicated on a disparate-impact theory are no longer actionable. More generally, employers that receive federal funding should ensure that their employment decisions comply with the text of Title VI and its enabling regulations and prioritize merit.
For more information about this critical change to Title VI enforcement, please contact the authors of this alert or any other attorney in Venable’s Labor and Employment Group.