Labor & Employment Law Daily Wrap Up, FEDERAL REGULATIONS—Department of Energy rescinds certain nondiscrimination requirements for recipients of federal funding, (May 14, 2025)

By Patricia K. Ruiz, J.D.

The regulation changes lift the prohibition of activities causing discriminatory effects, leaving only the prohibition of actions made with the intent to discriminate.

The Department of Energy (DOE) through a direct final rule is rescinding twelve provisions of its regulations at 10 CFR Part 1040. The affected provisions relate to nondiscrimination in federally assisted programs or activities; specifically, they describe “covered employment practices” covered by a variety of civil rights and nondiscrimination laws, the requirement to publish certain information in languages appropriate to the communities served, and the prohibition on activities with discriminatory effects. The direct final rule states that DOE is rescinding these provisions “after determining that they are either outdated, raise serious constitutional difficulties, or are based on anything other than the best reading of the underlying statutory authority or prohibition.”

Covered employment practices. The purpose of Part 1040 is to implement a variety of laws applying to federally assisted programs or activities, ensuring that no one may “be excluded from participation in, be denied the benefits of, be subjected to discrimination under, or be denied employment,” where a primary purpose of the federal financial assistance is to provide employment, when the delivery of services is affected by the recipient’s employment practices.

DOE rescinded regulations at 10 CFR 1040.1, 1040.12, and 1040.14, which relate to covered employment practices. The provisions state that covered employment practices also include practices that cause discrimination on the basis of race, color, or national origin with respect to beneficiaries or potential beneficiaries of the assisted program. Further, in regard to federal financial assistance that does not have the provision of employment as a primary objective, the prohibitions on employment discrimination apply to the employment practices of the recipient if discrimination on the ground of race, color, national origin, or sex in such employment practices tends to exclude persons from participation in, deny them the benefits of, or subject them to discrimination under the program receiving federal financial assistance. In rescinding these regulations, DOE determined that the expansive coverage of employment by these clauses have no statutory support.

Appropriate languages. DOE rescinded its regulation at 10 CFR 1040.5(c), which provides that, where a significant number or proportion of the population eligible to be served or likely to be directly affected by a federally assisted program or activity requires service or information in a language other than English to be informed of or participate in the program, the recipient of federal assistance must take reasonable steps, considering the scope of the program and size and concentration of such population, to provide information in appropriate languages to such persons. DOE reasoned that the requirements imposed “are not based on the best reading of the underlying statutory authority or prohibition.” While intentional discrimination is prohibited by Title VI, it does not dictate that a recipient provide services or information in languages other than English.

Prohibited effects. DOE amended its regulations at 10 CFR 1040.13, which prohibits a recipient from, directly or through contractual arrangements, utilizing criteria or methods of administration, making selections, or determining the site or location of facilities, having the effect of subjecting individuals to discrimination because of their race, color, national origin, or sex or having the effect of defeating or substantially impairing accomplishment of the objectives of the program with respect to individuals of a particular race, color, national origin, or sex. The amendments remove the prohibition on actions with a discriminatory effect; consequently, only actions made with the intent to discriminate are prohibited by the regulations.

Effective date. The direct final rule becomes effective 60 days after the date of its publication in the Federal Register, unless significant adverse comments are received by 30 days after the date of publication. Significant adverse comments are ones opposing the rule and raising, alone or in combination, a serious enough issue related to each of the independent grounds for the rule that a substantive response is required. If significant adverse comments are received, DOE will publish notification in the Federal Register before the effective date, either withdrawing the rule or issuing a new direct final rule responding to significant adverse comments.

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