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    Labor & Employment Law Daily Wrap Up, FEDERAL REGULATIONS—VA proposes eliminating disparate-impact liability regs under Title VI, (Jun 25, 2026)

    By Patricia K. Ruiz, J.D.

    The rule would revise 38 CFR Part 18 to limit nondiscrimination enforcement to intentional discrimination.

    A proposed rule from the Department of Veterans Affairs (VA) would amend Title VI implementing regulations at 38 CFR Part 18 by eliminating prov ...

    By Patricia K. Ruiz, J.D.

    The rule would revise 38 CFR Part 18 to limit nondiscrimination enforcement to intentional discrimination.

    A proposed rule from the Department of Veterans Affairs (VA) would amend Title VI implementing regulations at 38 CFR Part 18 by eliminating provisions that impose disparate-impact liability. The rule, scheduled for publication in the Federal Register on June 26, 2026, would revise the agency’s nondiscrimination framework for programs receiving federal financial assistance by limiting prohibited conduct to intentional discrimination based on race, color, or national origin.

    The agency states the changes are intended to align its regulations with the statutory text of Title VI, relevant Supreme Court precedent, and recent executive directives. Comments on the proposal are due 30 days after publication in the Federal Register.

    Proposed changes. The proposal would rescind or revise several key provisions in 38 CFR § 18.3 that currently extend beyond intentional discrimination. Among the most significant changes, the VA would remove § 18.3(b)(2) in full, which prohibits recipients from using criteria or methods of administration that have the effect of subjecting individuals to discrimination. The agency would also strike references to “effect” in § 18.3(b)(3), thereby limiting restrictions on facility siting decisions to actions taken with discriminatory purpose.

    The rule further proposes eliminating § 18.3(b)(6), which addresses affirmative action, and rescinding § 18.3(d)(2), which extends nondiscrimination requirements to certain employment practices involving federal assistance. In addition, the VA would remove an illustrative example in Appendix B that references disparate-impact concepts and make conforming technical revisions throughout Part 18.

    As revised, § 18.3 would continue to prohibit intentional discrimination, including in employment practices where a primary objective of federal assistance is to provide employment, but would no longer encompass facially neutral policies with unintended discriminatory effects.

    Statutory and judicial framework. The VA grounds the proposed changes in its interpretation of Title VI of the Civil Rights Act of 1964, which provides that no person shall be subjected to discrimination under federally assisted programs on the basis of race, color, or national origin. According to the agency, the statutory text addresses intentional discrimination and does not expressly authorize regulation of disparate impacts.

    The proposal relies on Supreme Court precedent, including Alexander v. Sandoval, which states that Title VI “prohibits only intentional discrimination.” The rulemaking also references decisions interpreting the Equal Protection Clause as requiring proof of discriminatory intent for constitutional violations, as well as subsequent case law addressing the scope of agency authority.

    The VA states that its existing regulations, which include disparate-impact provisions adopted in 1964 and expanded in later amendments, are in “considerable tension” with the statute and judicial interpretations. The proposal characterizes the current regulatory framework as extending beyond Title VI’s statutory authorization.

    Executive branch directives. The rulemaking implements Executive Order 14281, issued in April 2025, which directs federal agencies to eliminate disparate-impact liability to the maximum extent possible. The order instructs agencies to amend regulations that incorporate such liability and to align enforcement with constitutional and statutory principles. The VA also notes that the Department of Justice (DOJ) amended its own Title VI regulations in December 2025 to remove disparate-impact liability. The agency states that its proposal is intended to maintain consistency with the DOJ’s approach and provide uniformity across federal programs administering financial assistance.

    Stated policy considerations. The agency asserts that the proposed revisions would address legal and constitutional concerns associated with disparate-impact enforcement. It further states that the changes would reduce compliance costs, eliminate regulatory confusion, and clarify obligations for funding recipients. According to the preamble, the VA cannot quantify the costs and benefits of the rule due to data limitations but anticipates that removing disparate-impact provisions will decrease enforcement burdens and provide greater flexibility for recipients of federal funds. The agency also indicates that the rule would not impose new substantive obligations and would instead narrow the scope of prohibited conduct.

    News: FederalRegulations Discrimination AgencyNews

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