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Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Rules and Regulations involved, 42 U.S.C. 671a18b, while also ensuring that federal payments for foster care are only expended for child placements made pursuant to the best interest of the child standard. 42 U.S.C. 672e.
Commenters noted the pendency before the Supreme Court of several cases raising the question whether Title VII prohibits an employer from firing employees because of their sexual orientation or gender identity, contending that any action by the Department would be premature. As a general matter, although the Supreme Courts interpretation of the language of Title VII may inform the interpretation of similar language in other statutes and regulations, like Title IX, the statutes differ in certain respects. See, e.g., Gebser v. Lago Vista Indep. Sch. Dist., 524 U.S. 274, 28390 1998 comparing the text, context, and structure of Title VII and Title IX; Jackson v.
Birmingham Bd. of Educ., 544 U.S. 167, 175 2005 same.
The Supreme Court has now decided those Title VII cases and nothing in its decision in Bostock v. Clayton County, 590 U.S. ll, 140 S. Ct. 1731 2020, on those consolidated cases precludes the Department from issuing this final rule.
In Bostock v. Clayton County, the Supreme Court held that Title VIIs prohibition of employment discrimination because of sex encompasses discrimination because of sexual orientation and gender identity.
The provision at issue in Bostock stated that it is unlawful . . . for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual . . .
because of such individuals . . . sex.
42 U.S.C. 2000e2a1. The Court stated that it proceeded on the assumption that sex signified what the employers suggest, referring only to biological distinctions between male and female when Title VII was enacted.in 1964 140 S. Ct. at 1739. The Court then discussed the statutes use of the words because of by reason of or on account of, discriminate against treating an individual worse than others who are similarly situated, and individual, before concluding that the statute covered the challenged conduct, see 140 S. Ct. at 173940, 1753. The Court reasoned, for an employer to discriminate against employees for being homosexual or transgender, the employer must intentionally discriminate against individual men and women in part because of sex. 140 S. Ct. at 1743. The Court noted that the only question before us is whether an employer who fires someone simply for being
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homosexual or transgender has discharged or otherwise discriminated against that individual because of such individuals sex. 140 S. Ct. at 1753
Under Title VII . . . we do not purport to address bathrooms, locker rooms, or anything else of the kind..
It noted that the employers worry that our decision will sweep beyond Title VII to other federal or state laws that prohibit sex discrimination, but stated that none of these other laws are before us; we have not had the benefit of adversarial testing about the meaning of their terms, and we do not prejudge any such question today.. Id. Finally, the Court acknowledged the potential application of the express statutory exception for religious organizations;
of the First Amendment, which can bar the application of employment discrimination laws in certain cases;
and of RFRA, a kind of super statute which might supersede Title VIIs commands in appropriate cases. 140 S.
Ct. at 1754 noting that how these doctrines protecting religious liberty interact with Title VII are questions for future cases too.
The final rule is consistent with Bostock. First, whether a grant recipient or applicant is subject to Title VII is determined by facts independent of its relationship to the Department.
Receiving a grant from the Department does not change a grantees obligations under that statute. Second, if the Courts reasoning in Bostock is extended to other statutory protections prohibiting discrimination on the basis of sex statutory provisions that are applicable to grants, such as Title IX, section 1557
of the Affordable Care Act or other statutory provisions that incorporate Title IXs prohibition on discrimination on the basis of sex into Departmental grant programs, or other statutes that prohibit sex discrimination in Departmental grant programs 75.300c and d would incorporate such protections. Third, because the final rule applies only applicable statutory nondiscrimination requirements to its grant programs, the Department necessarily acknowledges the potential exceptions to such requirements under the Constitution and federal statute, including in nondiscrimination statutes, RFRA, and the First Amendment. Accordingly, nothing about the Bostock decision undermines the Departments choice in this final rule to refer to statutory nondiscrimination requirements and state that the Department will follow applicable Supreme Court decisions in administering its award programs, rather than delineating the specific
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protected categories from discrimination in the rule or applying two specific Supreme Court decisions. If anything, Bostock shows the utility of the Departments approach in this final rule.
Comments: Some commenters opposed the proposed rule, contending that it is an arbitrary and capricious exercise of the Departments rulemaking authority and violates the APA; another added that it is an abuse of discretion and otherwise not in accordance with law. Several commenters asserted that the Department did not provide adequate evidence to support its assertions about complaints or the proposed revisions, or failed to provide a reasoned analysis for the proposed changes.
Response: The Department respectfully disagrees. Under the APA, agency action may be arbitrary and capricious if the agency 1 relied on factors which Congress has not intended it to consider; 2 entirely failed to consider an important aspect of the problem; 3 offered an explanation for its decision that runs counter to the evidence before the agency; or 4
offered an explanation so implausible that it could not be ascribed to a difference in view or the product of agency expertise. Motor Vehicle Mfrs.
Assn of U.S., Inc. v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 43 1983.
Having identified legal, policy, and programmatic issues presented by current 75.300c and d, the Department proposed, and now finalizes, revisions to the provisions to address the issues. As finalized here, the amended 75.300c and d better align with the governing statutes. It is never arbitrary and capricious for an agency to justify its policy choice by explaining why that policy is more consistent with statutory language, so long as the agency analyzes or explains why the statute should be interpreted as the agency proposes. Encino Motorcars, LLC
v. Navarro, 136 S. Ct. 2117, 2127 2016
quoting Long Island Care at Home, Ltd.
v. Coke, 551 U.S. 158, 175 2007.
The Department respectfully disagrees with commenters that contended that the Department has not met the threshold standard for revising its regulations. Agency action that changes prior policy is not subject to a heightened justification or standard of review: An Agency need not demonstrate to a courts satisfaction that the reasons for the new policy are better than the reasons for the old one; it suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change of course adequately
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