1.    Examples of Federal Financial Assistance

Agency regulations use similar, if not identical, language to define federal financial assistance:

(1) A grant or loan of Federal financial assistance, including funds made available for:

(i) The acquisition, construction, renovation, restoration, or repair of a building or facility or any portion thereof; and

(ii) Scholarships, loans, grants, wages, or other funds extended to any entity for payment to or on behalf of students admitted to that entity, or extended directly to such students for payment to that entity

(2) A grant of Federal real or personal property or any interest therein, including surplus property, and the proceeds of the sale or transfer of such property, if the Federal share of the fair market value of the property is not, upon such sale or transfer, properly accounted for to the Federal Government.

(3) Provisions of the services of Federal personnel

(4) Sale or lease of Federal property or any interest therein at nominal consideration, or at consideration reduced for the purpose of assisting the recipient or in recognition of public interest to be served thereby, or permission to use Federal property or any interest therein without consideration

(5) Any other contract agreement or arrangement that has as one of its purposes the provision of assistance to any education program or activity, except a contract of insurance or guaranty

65 Fed. Reg. 52866 (2000).¹³ No extended discussion is necessary to show that money, through federal grants, cooperative agreements and loans, is federal financial assistance within the meaning of Title IX. See Paralyzed Veterans, 477 U.S. at 607 n.11. For example:

• United States military veterans are enrolled at Holy University, a private, religious university. The veterans receive payments from the federal government for educational pursuits and such monies are used by the veterans to pay a portion of their respective tuition payments at Holy University. Although federal payments are direct to the veterans and indirect to Holy University, the university is receiving federal financial assistance.

As set forth in the Title IX common rule, federal financial assistance may be in the form of a grant of land or use (rental) of federal property for the recipient at no or reduced cost. Since the recipient pays nothing or a lower amount for ownership of land or rental of property, the recipient is being assisted financially by the federal agency. Typically, assurances state that this type of assistance is considered to be ongoing for as long as the land or property is being used for the original or a similar purpose for which such assistance was intended. E.g., 65 Fed. Reg. 52867 at §__.115. Moreover, regulations also generally bind the successors and transferees of this property, as long as the original purpose, or a similar objective, is pursued. 65 Fed. Reg. 52867 at § .115. Thus, if the recipient uses the land or rents property for the same purpose at the time of the alleged discriminatory act, the recipient is receiving federal financial assistance, irrespective of when the land was granted or donated.

For example:

• Sixteen years ago, the Department of Defense (DOD) donated land from a closed military base to a State social services agency as the location for a training facility for caseworkers. The training facility has been built and is in use by the State. Students at the training facility allege sexual harassment against certain training facilitators. Because the State still uses the land donated to it by the DOD for its original (or similar purpose), the State is still receiving federal financial assistance from DOD and DOD has jurisdiction to investigate the complaint under Title IX. See 32 C.F.R. § 195.6.

• A police department has a training facility located in a housing project built, subsidized, and operated with Housing and Urban Development (HUD) funds. The police department is not charged rent. Thus, the police department is receiving federal financial assistance and is subject to Title IX.

Under the Intergovernmental Personnel Act of 1970, federal agencies may allow a temporary assignment of personnel to State, local, and Indian tribal governments, institutions of higher education, federally funded research and development centers, and certain other organizations for work of mutual concern and benefit. See 5 U.S.C. § 3372. This detail of federal personnel to a State or other entity is considered federal financial assistance, even if the entity reimburses the federal agency for some of the detailed employee's federal salary. See Paralyzed Veterans, 477 U.S. at 612 n.14. However, if the State or other entity fully reimburses the federal agency for the employee's salary, it is unlikely that the entity receives federal financial assistance. For example:

• Two research scientists from the National Institute of Health (NIH) are detailed to a university research organization for two years to help research treatments for cancer. NIH pays for three-fourths of the salary of the two detailed employees, while the organization pays the remaining portion. The research organization is considered to be receiving federal financial assistance since the federal government is paying a substantial portion of the salary of the detailed federal employees. The research organization is thus now subject to Title IX.

Another common form of federal financial assistance provided by many agencies is training by federal personnel. For example:

• A city police department sends several police officers to training at the FBI Academy at Quantico without cost to the city. The entire police department is considered to have received federal financial assistance. See Delmonte v. Department of Bus. & Prof’l Regulation, Div. of Alcohol, Beverages, and Tobacco of Fla., 877 F. Supp. 1563 (S.D. Fla. 1995).

 

2.    Direct and Indirect Receipt of Federal Assistance

Federal financial assistance may be received directly or indirectly.¹⁴ For example, colleges indirectly receive federal financial assistance when they accept students who pay, in part, with federal financial aid directly distributed to the students. Grove City College v. Bell, 465 U.S. 555, 564 (1984)¹⁵; see also Bob Jones Univ. v. Johnson, 396 F. Supp. 597, 603 (D. S.C. 1974), aff'd, 529 F.2d 514 (4th Cir. 1975). In Bob Jones Univ., 396 F. Supp. at 603, cited with approval in Grove City, 465 U.S. at 564, the university was deemed to have received federal financial assistance for participating in a program wherein veterans received monies directly from the Veterans Administration to support approved educational pursuits, although the veterans were not required to use the specific federal monies to pay the schools for tuition and expenses. Bob Jones Univ., 396 F. Supp. at 602-03 & n.22. Even if the financial aid to the veterans did not reach the university, the court considered this financial assistance to the school since this released the school's funds for other purposes. Id. at 602. Thus, an entity may be deemed to have "received Federal financial assistance" even if the entity did not show a "financial gain, in the sense of a net increment in its assets." Id. at 602-03. Aid such as this, and noncapital grants, are equally federal financial assistance. Id.

3.    Federal Action That Is Not Federal Financial Assistance

To simply assert that an entity receives something of value in nonmonetary form from the federal government's presence or operations, however, does not mean that such benefit is federal financial assistance. For example, licenses impart a benefit since they entitle the licensee to engage in a particular activity, and they can be quite valuable. Licenses, however, are not federal financial assistance. Community Television of S. Cal. v. Gottfried, 459 U.S. 498, 509 (1983) (The Federal Communications Commission is not a funding agency and television broadcasting licenses do not constitute federal financial assistance); California Ass’n of the Physically Handicapped v. FCC, 840 F.2d 88, 92-93 (D.C. Cir. 1988) (same); see Herman v. United Bhd. of Carpenters & Joinders, 60 F.3d 1375, 1381-82 (9th Cir. 1995) (Certification of union by the National Labor Relations Board is akin to a license, and not federal financial assistance under § 504).

Similarly, statutory programs or regulations that directly or indirectly support, or establish guidelines for, an entity's operations are not federal financial assistance. Herman, 60 F.3d at 1382 (Neither Labor regulations establishing apprenticeship programs nor Davis-Bacon Act wage protections are federal financial assistance.); Steptoe v. Savings of America, 800 F. Supp. 1542, 1548 (N.D. Ohio 1992) (Mortgage lender subject to federal banking laws does not receive federal financial assistance.); Rannels v. Hargrove, 731 F. Supp. 1214, 1222-23 (E.D. Pa. 1990) (federal bank regulations are not federal financial assistance under the Age Discrimination Act).

Furthermore, programs "owned and operated" by the federal government, such as the air traffic control system, do not constitute federal financial assistance. Paralyzed Veterans, 477 U.S. at 612; Jacobson v. Delta Airlines, 742 F.2d 1202, 1213 (9th Cir. 1984) (air traffic control and national weather service programs do not constitute federal financial assistance).¹⁶110 Cong. Rec. 13380 (1964).

It also should be noted that while contracts of guaranty and insurance may constitute federal financial assistance, Title IX specifically states that it does not apply to contracts of insurance or guaranty. See 20 U.S.C. § 1682; see Gallagher v. Croghan Colonial Bank, 89 F.3d 275, 277-78 (6th Cir. 1996) (Default insurance for bank's disbursement of federal student loans is a "contract of insurance," and excluded from Section 504 coverage by agency regulations). But see Moore v. Sun Bank, 923 F.2d 1423, 1427 (11th Cir. 1991) (loans guaranteed by the Small Business Administration constituted federal financial assistance since Section 504 does not exclude contracts of insurance or guarantee from coverage as does Title IX).

Procurement contracts also are not considered federal financial assistance. DeVargas v. Mason & Hanger-Silas Mason Co., 911 F.2d 1377 (10th Cir. 1990); Jacobson, 742 F.2d at 1209; Muller v. Hotsy Corp., 917 F. Supp. 1389, 1418 (N.D. Iowa 1996) (procurement contract by company with GSA to provide supplies is not federal financial assistance); Hamilton v. Illinois Cent. R.R. Co., 894 F. Supp. 1014, 1020 (S.D. Miss. 1995). A distinction must be made between procurement contracts at fair market value and subsidies; the former is not federal financial assistance although the latter is. Jacobson, 742 F.2d at 1209; Mass v. Martin Marietta Corp., 805 F. Supp. 1530, 1542 (D. Co. 1992) (federal payments for goods pursuant to a contract, even if greater than fair market value, do not constitute federal financial assistance). As described in Jacobson and followed in DeVargas, there need not be a detailed analysis of whether a contract is at fair market value, but instead a focus on whether the government intended to provide a subsidy to the contractor. DeVargas, 911 F.2d at 1382-83; Jacobson, 742 F.2d at 1210. In DeVargas, a Department of Energy contract, issued through a competitive bidding process after a determination that a private entity could provide the service in a less costly manner, evidenced no intention to provide a subsidy to the contractor. Id. at 1382-83. For example:

• Dept. of Transportation (DOT) contracts with TechStuff, a private company that provides training on the use of computers for a subway system. Under the contract, full price is paid by DOT for the training to be provided by TechStuff. Because this is a direct procurement contract by the federal government, the funds paid to TechStuff by DOT do not subject TechStuff to Title IX.

Finally, Title IX does not apply to direct, unconditional assistance to ultimate beneficiaries, the intended class of private citizens receiving federal aid. For example, social security payments and veterans’ pensions are not federal financial assistance. Soberal-Perez v. Heckler, 717 F.2d 36, 40 (2d Cir. 1983), cert. denied, 466 U.S. 929 (1984); Bob Jones Univ., 396 F. Supp. at 602 n.16.¹⁷

B.    Recipient

1.    Regulations

A "recipient" is an entity that receives federal financial assistance and that operates "an education program or activity," and is thus subject to Title IX. The Title IX common rule provides as follows:

The term recipient means any State or political subdivision thereof, or any instrumentality of a State or political subdivision thereof, any public or private agency, institution, or organization, or other entity, or any person, to whom Federal financial assistance is extended directly or through another recipient and that operates an education program or activity that receives such assistance, including any subunit, successor, assignee, or transferee thereof.

65 Fed. Reg. 52866 at § __.105 (2000).

Several aspects of the plain language of the regulations should be noted. First, a recipient may be a public (e.g., a State, local or municipal agency) or a private entity. Second, Title IX does not apply to the federal government. Therefore, a federal agency cannot be considered a "recipient" within the meaning of Title IX. Third, there may be more than one recipient in a program of federal financial assistance; that is, a primary recipient (e.g., State agency) that transfers or distributes assistance to a subrecipient (local entity) for distribution to an ultimate beneficiary.¹⁸ Fourth, a recipient also encompasses a successor, transferee, or assignee of the federal assistance (property or otherwise), under certain circumstances. Fifth, as discussed in detail below, there is a distinction between a recipient and a beneficiary. Finally, although not addressed in the regulations, a recipient may receive federal assistance either directly from the federal government or indirectly through a third party, who is not necessarily another recipient. For example, schools are indirect recipients when they accept payments from students who directly receive federal financial aid.

2.    Direct Relationship

The clearest means of identifying a "recipient" of federal financial assistance covered by Title IX is to determine whether the entity has voluntarily entered into a direct relationship with the federal government and receives federal assistance under a condition or assurance of compliance with Title IX. See Paralyzed Veterans, 477 U.S. at 605-606.

By limiting coverage to recipients, Congress imposes the obligations of § 504 [and Title IX] upon those who are in a position to accept or reject those obligations as part of the decision whether or not to "receive" federal funds.

Id. at 606; see also Soberal-Perez, 717 F.2d at 40-41. It is important to note that, by signing an assurance, the recipient is committing itself to complying with nondiscrimination mandates.¹⁹ Even without a written assurance, courts describe obligations under nondiscrimination laws as similar to a contract, and have thus concluded that "the recipients' acceptance of the funds triggers coverage under the nondiscrimination provision." Paralyzed Veterans, 477 U.S. at 605. In this scenario, the recipient has a direct relationship with the funding agency and, therefore, is subject to the requirements of Title IX. For example:

• Six years ago, LegalSkool, a law school at a university, was built partly with federal grants, loans, and interest subsidies in excess of $7 million from the Department of Education (ED). The law school is a "recipient" because of the funding from ED for construction purposes.

• The U.S. Department of Justice (DOJ) provides funding for vocational education for inmates at a state prison. The prison is a recipient of federal financial assistance from DOJ.

• Hall City Police Department (HCPD) received a grant from DOJ for community outreach programs. HCPD is considered to be a recipient of federal financial assistance from DOJ.

While showing that the entity directly receives a federal grant, loan, or contract (other than a contract of insurance or guaranty) is the easiest means of identifying a Title IX recipient, this direct cash flow does not describe the full reach of Title IX.²⁰

3.    Indirect Recipient

A recipient may receive funds either directly or indirectly. Grove City College, 465 U.S. at 564-65.²¹ For example, educational institutions receive federal financial assistance indirectly when they accept students who pay, in part, with federal loans. Although the money is paid directly to the students, the universities and other educational institutions are the indirect recipients. Id.; Bob Jones Univ., 396 F. Supp. at 602.

In Grove City College, the Supreme Court found that there was no basis to create a distinction not made by Congress regarding funding paid directly to or received indirectly by a recipient. 465 U.S. at 564-65. In reaching its conclusion, the Court considered the congressional intent and legislative history of the statute in question to identify the intended recipient. The Court found that the 1972 Education Amendments, of which Title IX is a part, are "replete with statements evincing Congress' awareness that the student assistance programs established by the Amendments would significantly aid colleges and universities. In fact, one of the stated purposes of the student aid provisions was to ‘provid[e] assistance to institutions of higher educations.’ Pub. L. 92-318, § 1001(c)(1), 86 Stat. 831, 20 U.S.C. § 1070(a)(5)" Grove City College, 465 U.S. at 565-66. Finally, the Court distinguished student aid programs that are "designed to assist" educational institutions and that allow such institutions the option of participation in such programs, from other general welfare programs where individuals are free to spend the payments without limitation. Id. at 565 n.13.

In contrast, as subsequently explained by the Supreme Court in Paralyzed Veterans, it is essential to distinguish aid that flows indirectly to a recipient from aid to a recipient that reaches a beneficiary.

While Grove City stands for the proposition that Title IX coverage extends to Congress' intended recipient, whether receiving the aid directly or indirectly, it does not stand for the proposition that federal coverage follows the aid past the recipient to those who merely benefit from the aid.

477 U.S. at 607.

Along these lines, the Supreme Court in NCAA v. Smith, 525 U.S. 459, 470 (1999), citing both Grove City and Paralyzed Veterans, stated that while dues paid to an entity (NCAA) by colleges and universities, who were recipients of federal financial assistance, "at most ... demonstrates that it [NCAA] indirectly benefits from the federal assistance afforded its afforded members." But the Court stated, "This showing, without more, is insufficient to trigger Title IX coverage. Smith, 525 U.S. at 468.²²

4.    Transferees and Assignees

Agency regulations and assurances often include specific statements on the application of Title IX to successors, transferees, assignees, and contractors.

In the case of Federal financial assistance extended to provide real property or structures thereon, such assurance shall obligate the recipient, or in the case of a subsequent transfer, the transferee, for the period during which the real property or structures are used to provide an education program or activity....The designated agency official will specify the extent to which such assurances will be required of the applicant’s or recipient’s subgrantees, contractors, subcontractors, transferees, or successors in interest.

65 Fed. Reg. 52867 at §__.115 (2000) (emphasis added).

Furthermore, Title IX regulations provide that land originally acquired through a program receiving federal financial assistance must include a covenant binding on subsequent purchasers or transferees that requires nondiscrimination for as long as the land is used for the original or a similar purpose for which the federal assistance is extended. 65 Fed. Reg. 52867 at § .115 (2000).²³

5.    Primary/Subrecipient Programs

Many programs have two recipients. The primary recipient directly receives the federal financial assistance. The primary recipient then distributes the federal assistance to a subrecipient to carry out a program. Both the primary recipient and subrecipient must conform their actions to Title IX (and other nondiscrimination laws). For example:

• A State agency, such as the Department of Children and Family Services, receives a substantial portion of its funding from the federal government. The State agency, as the primary recipient or conduit, in turn, funds local social service organizations, in part, with its federal funds. The local agencies receive federal financial assistance, and thus are subject to Section 504 (and other nondiscrimination laws). See Graves v. Methodist Youth Servs., Inc., 624 F. Supp. 429 (N.D. Ill. 1985).²⁴ Education programs conducted by the State Department of Children and Family Services and by the local social service organizations are all covered by Title IX.

• Under the Older Americans Act, funds are given by the Department of Health and Human Services to State agencies which, in turn, distribute funds according to funding formulas to local agencies operating programs for elderly Americans. Title VI applies to the programs and activities of the State agencies because of each agency’s status as a direct conduit recipient passing federal funds on to subrecipients. Title VI also applies to the local agencies as subrecipients of federal financial assistance. See Chicago v. Lindley, 66 F.3d 819 (7th Cir. 1995). Title IX would similarly apply to any education programs conducted by the State or local entities.

6.    Contractor and Agent

A recipient may not absolve itself of its Title IX and other nondiscrimination obligations by hiring a contractor or agent to perform or deliver assistance to beneficiaries. Agency regulations consistently state that prohibitions against discriminatory conduct, whether intentional or through sex neutral means with an unjustified disparate impact, apply to a recipient, whether committed "directly or through contractual or other arrangements." E.g., 28 C.F.R. §§ 42.104(b)(1), (2) (emphasis added). For example:

• A recipient department of corrections contracts with a tutoring company to provide vocational training to inmates. Employees of the contractor refuse to admit female prisoners to a welding training class the contractor is conducting. The recipient is liable under Title IX for the contractor's actions as the contractor is performing a program function of the recipient.

One also should evaluate the agency's assurances or certifications; such documents can provide an independent basis to seek enforcement. For example, the assurance for the Office of Justice Programs, within the Department of Justice, states, inter alia,

It [the Applicant] will comply, and all its contractors will comply, with the nondiscrimination requirements of the [Safe Streets Act, Title VI, Section 504, Title IX . . . .] (emphasis added).

7.    Recipient v. Beneficiary

Finally, in analyzing whether an entity is a recipient, it is necessary to distinguish a recipient from a beneficiary. According to the Supreme Court, the Title IX regulations issued by the Department of Education "make[s] clear that Title IX coverage is not triggered when an entity merely benefits from federal funding." NCAA v. Smith, 525 U.S. 459, 468 (1999), citing 34 C.F.R. § 106.2(h). In NCAA v. Smith, a student athlete sued the NCAA, claiming that the NCAA’s refusal to grant a waiver of its bylaw prohibiting a student from participating in athletics programs in other than the student’s undergraduate institution violated Title IX. Smith claimed that the NCAA’s receipt of dues from its member schools, which received federal financial assistance, subjected the NCAA to Title IX coverage.

The Court, however, rejected this claim and held that "[a]t most, the [NCAA’s] receipt of dues demonstrates that it indirectly benefits from the federal financial assistance afforded its members. This showing without more is insufficient to trigger Title IX coverage." Id. at 468. The Court noted that the definition of a recipient under Title IX regulations follows the "teaching of Grove City and Paralyzed Veterans: Entities that receive federal assistance, whether directly or through an intermediary, are recipients within the meaning of Title IX; entities that only benefit economically from federal assistance are not." NCAA v. Smith, 525 U.S. at 468.

An assistance program may have many beneficiaries, that is, individuals and/or entities that directly or indirectly receive an advantage through the operation of a federal program. Beneficiaries, however, do not enter into any formal contract or agreement or sign an assurance with the federal government where compliance with Title VI (or Title IX) is a condition of receiving the assistance. Paralyzed Veterans, 477 U.S. at 606-607.

In almost any major federal program, Congress may intend to benefit a large class of persons, yet it may do so by funding - that is, extending federal financial assistance to - a limited class of recipients. Section 504, like Title IX in Grove City, 465 U.S. 555 (1984), draws the line of federal regulatory coverage between the recipient and the beneficiary.

Id. at 609-10. Title IX was meant to cover only those situations where federal funding is given to a non-federal entity which, in turn, provides financial assistance to the ultimate beneficiary, or disburses federal assistance to another recipient for ultimate distribution to a beneficiary.²⁵ It is important to note that the Supreme Court has firmly established that the receipt of student loans or grants by an entity renders the entity a recipient of federal financial assistance. See Grove City 465 U.S. at 569.

In Paralyzed Veterans, a Section 504 case decided under Department of Transportation regulations, the Court held that commercial airlines that used airports and gained an advantage from the capital improvements and construction at airports were beneficiaries, and not recipients, under the airport improvement program. The airport operators, in contrast, directly receive the federal financial assistance for the airport construction. The Court examined the program statutes and concluded:

Congress recognized a need to improve airports in order to benefit a wide variety of persons and entities, all of them classified together as beneficiaries. [note omitted]. Congress did not set up a system where passengers were the primary or direct beneficiaries, and all others benefitted by the Acts are indirect recipients of the financial assistance to airports....The statute covers only those who receive the aid, but does not extend as far as those who benefit from it....Congress tied the regulatory authority to those programs or activities that receive federal financial assistance.

Id. at 607-09.

C.    Covered Education Program or Activity

1.    Introduction

Title IX prohibits recipients of federal financial assistance from discriminating on the basis of sex in education programs or activities. In the context of traditional educational institutions,²⁶ it is well established that the covered education program or activity encompasses all of the educational institution’s operations including, but not limited to, "traditional educational operations, faculty and student housing, campus shuttle bus service, campus restaurants, the bookstore, and other commercial activities." S. Rep. No. 64 at 17, reprinted in 1988 U.S.C.C.A.N. at 19. As noted in the Introduction, however, the primary focus of this Title IX Manual is on education programs or activities conducted outside traditional educational institutions. This section, therefore, discusses the scope of Title IX’s ban on sex discrimination in this context, i.e., what constitutes a covered "education program or activity" for recipients of federal financial assistance other than traditional educational institutions, such as hospitals or prisons.²⁷

In analyzing the scope of coverage under Title IX, it is critical to understand the role of the CRRA. As discussed in Chapter I, the CRRA amended Title IX, Title VI, Section 504, and the Age Discrimination Act by adding an explicit and expansive definition of "program or activity" that encompasses "all of the operations of" a covered entity, any part of which receives federal financial assistance, in order to establish the principle of institution-wide coverage. However, Title IX, unlike the other statutes amended by the CRRA, prohibits discrimination only in "education" programs or activities. Thus, it is necessary to reconcile the institution-wide coverage mandated by the CRRA with the fact that Title IX’s ban on sex discrimination is limited to education programs or activities.

As explained below, outside the context of traditional educational institutions, a fact-specific inquiry is required to determine which portions of a covered program or activity are educational, and thus covered by Title IX. In light of the broad sweep envisioned for Title IX, and the expansive notion of institution-wide coverage mandated by the CRRA, such inquiries must be made as broadly as possible.

2.    The Civil Rights Restoration Act of 1987

Before examining the question of what constitutes a covered education program or activity under Title IX, as amended by the CRRA, it is helpful to take a closer look at the CRRA and the expansive definition of "program" and "program or activity" enacted by this amendment.

Congress’ intent in passing the CRRA was clear: to establish the principle of broad, institution-wide coverage under the four major civil rights statutes that prohibit discrimination in federally assisted programs. S. Rep. No. 64 at 2, reprinted in 1988 U.S.C.C.A.N. at 4-5. The CRRA includes virtually identical amendments to Title IX, Title VI, Section 504, and the Age Discrimination Act, to broadly define "program" or "program or activity" as "all of the operations of":

For the purposes of this chapter, the term "program or activity" and "program" mean all of the operations of--

(1)(A) a department, agency, special purpose district, or other instrumentality of a State or of a local government; or

(B) the entity of such state or local government that distributes such assistance and each such department or agency (and each other State or local government entity) to which the assistance is extended, in the case of assistance to a State or local government;

(2)(A) a college, university, or other postsecondary institution, or a public system of higher education; or

(B) a local education agency (as defined in § 8801 of this title), system of vocational education, or other school system;

(3)(A) an entire corporation, partnership, private organization, or an entire sole proprietorship --

(i) if assistance is extended to such corporation, partnership, private organization, or sole proprietorship as a whole; or

(ii) which is principally engaged in the business of providing education, health care, housing, social services, or parks and recreation; or

(B) the entire plant or other comparable, geographically separate facility to which Federal financial assistance is extended, in the case of any other corporation, partnership, private organization, or sole proprietorship; or

(4) any other entity which is established by two or more of the entities described in paragraph (1), (2), or (3);

any part of which is extended Federal financial assistance...

20 U.S.C. § 1687. Since passage of the CRRA, courts have consistently held that the receipt of federal funds results in entity-wide coverage under these statutes. See, e.g., Knight v. Alabama, 787 F. Supp. 1030, 1064 (N.D. Ala. 1991), aff’d in part, rev’d in part, and vacated in part, 14 F.3d 1534 (11^th Cir. 1994). See also United States Department of Justice, Title VI Legal Manual, Chapter VII (1998).

3.    Meaning of "education program or activity"

It is clear that the CRRA was designed to establish broad institution-wide coverage for Title IX, Title VI, Section 504, and the Age Discrimination Act. However, by defining only "program or activity," the CRRA did not directly address the question of how to interpret the modifier "education" for purposes of Title IX coverage. As a result, coverage under Title IX involves an issue of statutory interpretation that does not arise for the other three civil rights statutes, namely: to what extent does "education" provide a limitation on the concept of institution-wide coverage embodied in the CRRA?

The legislative history of the CRRA reveals that some members of Congress struggled with this very issue. Some legislators apparently believed and/or feared that enactment of the CRRA would effectively "read-out" the education limitation in Title IX by prohibiting sex discrimination in all of the operations of a recipient’s program or activity, provided the program or activity contained at least one educational component. Other members of Congress, however, apparently believed that the receipt of federal funds would subject a recipient’s entire program or activity to coverage under all four civil rights statutes, but Title IX’s prohibition on sex-based discrimination would remain limited to the educational components of a recipient’s program, if any.

Most significantly, the 1988 Senate Report for the CRRA addresses this limitation. Although the Report contains numerous hypotheticals to explain the new definition of "program or activity" (most of which do not single out Title IX, referring collectively to the four civil rights statutes instead), one example does note that Title IX’s coverage will be limited to education:

If a private hospital corporation is extended federal assistance for its emergency rooms, all the operations of the hospital, including for example, the operating rooms, the pediatrics department, admissions, discharge offices, etc., are covered by Title VI, Section 504, and the Age Discrimination Act. Since Title IX is limited to education programs or activities, it would apply only to the students and employees of education programs operated by the hospital, if any.

S. Rep. No. 100-64, at 17.²⁸

4.    Covered "education programs or activities"

Of course, ordinary rules of statutory construction require that meaning be given to all phrases of a statute. See Connecticut Dep’t of Income Maintenance v. Heckler, 471 U.S. 524, 530 n.15 (1985). As the Supreme Court has repeatedly emphasized, "It is a familiar principle of statutory construction that courts should give effect, if possible, to every word that Congress has used in a statute." Id.

Thus, in determining the proper scope of coverage for Title IX, as amended by the CRRA, it is important to give meaning to both the modifier "education" and the phrase "program or activity." This requires that the fact that Title IX’s ban on sex discrimination is limited to "education" be balanced against the concept of broad, institution-wide coverage contemplated by the CRRA’s definition of "program or activity."

In light of these considerations, a fact-specific inquiry is necessary to determine what constitutes a covered "education program or activity." In other words, Title IX’s scope of coverage will depend upon which portions of a covered program or activity are educational in nature.

In conducting such factual inquiries, it is important to remember that determinations as to what constitutes a covered education program must be made as broadly as possible. This principle is consistent with both the broad sweep of coverage originally envisioned for Title IX as well as the expansive notion of institution-wide coverage mandated by the CRRA.

Notably, the Ninth Circuit has concluded that it is appropriate to conduct just such a fact-specific inquiry in order to determine the proper scope of coverage under Title IX. In Jeldness v. Pearce, 30 F.3d 1220 (9th Cir. 1994), the court determined that whether various components of a correctional facility, such as the prison industries, the farm annex, or the forest work camp, constituted an "educational" program within the meaning of Title IX was a question of fact. Jeldness, 30 F.3d at 1226.

As the Jeldness opinion illustrates, the question of what constitutes a covered education program for purposes of Title IX requires a factual determination as to whether the relevant portion of a recipient’s program is educational in nature. While Title IX’s antidiscrimination protections, unlike Title VI’s, are limited in coverage to "education" programs or activities, the determination as to what constitutes an "education program" must be made as broadly as possible in order to effectuate the purposes of both Title IX and the CRRA. Both of these statutes were designed to eradicate sex-based discrimination in education programs operated by recipients of federal financial assistance, and all determinations as to the scope of coverage under these statutes must be made in a manner consistent with this important congressional mandate.

IV.    Discriminatory Conduct

A.    General

Title IX was modeled after Title VI of the Civil Rights Act of 1964 and they both share a common purpose: to ensure that public funds derived from all the people are not utilized in ways that encourage, subsidize, permit, or result in prohibited discrimination against some of the people.²⁹ Towards that end, both Title VI and Title IX broadly prohibit conduct by a recipient of federal financial assistance that results in a person being "excluded from participation in, . . . denied the benefits of, or . . . subjected to discrimination under" a federally-assisted program or activity.³⁰

Title VI was enacted pursuant to Congress’ dual authority under the Spending Clause³¹ and Section 5 of the Fourteenth Amendment.³² Thus, both Title VI and Title IX trace their roots to common constitutional sources.

Title IX, like Title VI, recognizes three general types of prohibited discrimination: (1) disparate treatment, (2) disparate impact, and (3) retaliation. Any effective and meaningful administrative enforcement program under Title IX must be prepared to address all three.

1.    Disparate Treatment

Disparate treatment³³ refers to actions that treat similarly situated persons differently on the basis of a prohibited classification. In the case of Title IX, the prohibited classification is sex. Under the disparate treatment theory of discrimination, the core question is whether a recipient, through its officials, has treated people differently on the basis of sex. Here, the applicable legal standards under Title VI and Title IX are generally identical and investigative officials can rely on case law decided under Title VI in establishing violations under Title IX.³⁴

To establish disparate treatment, the fundamental task is to show that similarly situated individuals were treated differently because of, or on the basis of their sex. This requires that the decision maker was aware of the complainant’s sex and took action at least in part based on that sex. This does not mean, however, that the evidence must show "bad faith, ill will or any evil motive on the part of the [recipient]."³⁵ Disparate treatment prohibits unjustified sex-based distinctions regardless of the motivation behind those distinctions. For example, many statutory or administrative schemes that illegally discriminate on the basis of sex were created or were subsequently justified as efforts to address the special needs of a particular sex.³⁶ It is not a harmful motive, but the decision to treat differently on the basis of sex, that runs afoul of Title IX.

Evidence of discriminatory intent may be direct or circumstantial and may be found from various sources, including statements by decision makers, the historical background of the events in issue, the sequence of events leading to the decision in issue, a departure from standard procedure (e.g., failure to consider factors normally considered), legislative or administrative history (e.g., minutes of meetings), a past history of discriminatory or segregated conduct, and statistical evidence.³⁷

Direct proof of discriminatory intent is often unavailable. In the absence of such evidence, claims of intentional discrimination under Title IX may be analyzed using the Title VII burden-shifting framework established by the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).³⁸

Applying the McDonnell Douglas principles to a Title IX claim, the investigating agency must first determine whether the case file raises an inference of discrimination, i.e., the investigating agency must establish a prima facie case. The elements of a prima facie case may vary depending on the facts of the complaint, but such elements often include the following:

1.    that the aggrieved person was a member of a protected class;

2.    that this person applied for, and was eligible for, an educational program operated by a recipient of federal financial assistance that was accepting applicants;

3.    that despite the person’s eligibility, he or she was rejected; and,

4.    that the recipient selected applicants of the complainant’s qualifications of the other sex – or that the program remained open and the recipient continued to accept applications from other applicants.³⁹

If the case file contains sufficient evidence to establish a prima facie case of discrimination, the investigating agency must then determine whether the recipient can articulate a legitimate, nondiscriminatory reason for the challenged action.⁴⁰ If the recipient can articulate a nondiscriminatory explanation for the alleged discriminatory action, the investigating agency must determine whether the case file contains sufficient evidence to establish that the recipient’s stated reason was a pretext for discrimination. In other words, the evidence must support a finding that the reason articulated by the recipient was not the true reason for the challenged action, and that the real reason was discrimination based on sex.⁴¹

Similar principles may be used to analyze claims that a recipient has engaged in a "pattern or practice" of unlawful discrimination. Such claims may be proven by a showing of "more than the mere occurrence of isolated or ‘accidental’ or sporadic discriminatory acts."⁴² The evidence must establish that a pattern of discrimination based on sex was the recipient’s "standard operating procedure –- the regular rather than the unusual practice."⁴³ Once the existence of such a discriminatory pattern has been proven, it may be presumed that every disadvantaged member of the protected class was a victim of the discriminatory policy, unless the recipient can show that its action was not based on its discriminatory policy.⁴⁴

It is also important to remember that some claims of intentional discrimination may involve the use of policies or practices that explicitly classify individuals on the basis of sex. Such "classifications" may constitute unlawful discrimination. For example, the Supreme Court held in a Title VII case that a policy that required female employees to make larger contributions to a pension fund than male employees created an unlawful classification based on sex.⁴⁵ The investigation of such claims should focus on the recipient’s reasons for utilizing the challenged classification policies. Most such policies will be deemed to violate Title IX (assuming the actions occurred in an education or training program) unless the recipient can articulate a lawful justification for classifying people on the basis of sex.

2.    Disparate Impact

In contrast to disparate treatment, which focuses on the intent to cause sex-based results, disparate impact focuses on the consequences of a facially sex-neutral policy or practice. Under this theory of discrimination, the core inquiry focuses on the results of the action taken, rather than the underlying intent.⁴⁶ Because of this difference in focus, evidence of a discriminatory intent or purpose is not required. Indeed, "intent" is not an element in the disparate impact analysis.

Following the Title VI model, Congress delegated to each funding agency the authority to implement Title IX’s prohibition of sex discrimination in educational programs or activities of recipients of federal financial assistance by issuing regulations, and those regulations have the force and effect of law.⁴⁷ In furtherance of this broad delegation of authority, federal agencies have uniformly implemented Title IX in a manner that incorporates and applies the disparate impact theory of discrimination.

The courts have sustained the use of disparate impact theory as lawful and proper exercises of agencies’ delegated authority, even where the challenged actions or practices do not constitute intentional discrimination and thus are not prohibited directly by the explicit language of either Title VI or Title IX.⁴⁸

Under the disparate impact theory, a recipient violates agency regulations by using a neutral procedure or practice that has a disparate impact on protected individuals, and such practice lacks a substantial legitimate justification. As in Title VI disparate impact cases, the elements of a Title IX disparate impact claim derive from the analysis of cases decided under Title VII disparate impact law. ⁴⁹

In a disparate impact case, the focus of the investigation concerns the consequences of the recipient's practices, rather than the recipient's intent.⁵⁰ To establish discrimination under a disparate impact scheme, the investigating agency must first ascertain whether the recipient utilized a facially neutral practice that had a disproportionate impact on the basis of sex.⁵¹ In doing so, the investigating agency must do more than demonstrate that the practice or policy in question is a "bad idea."⁵² The agency must show a causal connection between the facially neutral policy and the disproportionate and adverse impact on a protected group.⁵³

If the evidence establishes a prima facie case, the investigating agency must then determine whether the recipient can articulate a "substantial legitimate justification" for the challenged practice.⁵⁴ "Substantial legitimate justification" is similar to the Title VII concept of "business necessity," which involves showing that the policy or practice in question is related to performance on the job.⁵⁵

To prove a "substantial legitimate justification," the recipient must show that the challenged policy was "necessary to meeting a goal that was legitimate, important, and integral to the [recipient’s] institutional mission."⁵⁶ The justification must bear a "manifest demonstrable relationship" to the challenged policy.⁵⁷ In an education context, the practice must be demonstrably necessary to meeting an important educational goal, i.e. there must be an "educational necessity" for the practice.

If the recipient can make such a showing, the inquiry then turns to whether there are any "equally effective alternative practices" that would result in less adverse impact.⁵⁸ Evidence of either will support a finding of liability.

Courts have often found Title VI disparate impact violations in cases where recipients utilize policies or practices that result in the provision of fewer services or benefits, or inferior services or benefits, to members of a protected group. A similar outcome should result under Title IX where sex is the basis for the differences in impact. For example, in Sharif v. New York State Educ. Dep’t, 709 F. Supp. 345 (S.D.N.Y. 1989), the District Court applied a discriminatory effects test to analyze the Title IX claims of a class of female applicants for New York State Merit Scholarships who alleged that the state’s sole reliance on SAT scores to determine eligibility for such scholarships disproportionately discriminated against women. The District Court, in granting the plaintiff’s motion for a preliminary injunction, found that the state’s system of awarding Merit Scholarships had a discriminatory impact on women and constituted a violation of Title IX.⁵⁹ See also Larry P. v. Riles, 793 F.2d 969 (9^th Cir. 1984), in which the Ninth Circuit applied a discriminatory effects test to analyze the Title VI claims of a class of black school children who were placed in special classes for the "educable mentally retarded" ("EMR") on the basis of non-validated IQ tests. The Ninth Circuit upheld the district court’s finding that use of these IQ tests for placement in EMR classes constituted a violation of Title VI.⁶⁰ Similarly, in Sandoval, the court held that discrimination on the basis of language, in the form of an English-only policy, had an unjustified disparate impact on the basis of national origin, and thus violated Title VI.⁶¹

In evaluating a potential disparate impact violation, it is important to examine whether there is a substantial legitimate justification for the challenged practice and whether there exists an alternative practice that is comparably effective with less of a disparate impact.⁶²

For example, the Second Circuit in New York Urban League, reversed the district court’s preliminary injunction for its failure to consider whether there was a "substantial legitimate justification" for a subway fare increase that had an adverse impact.⁶³

[B]ut the district court did not consider, much less analyze, whether the defendants had shown a substantial legitimate justification for this allocation. The MTA and the State identified several factors favoring a higher subsidization of the commuter lines. By encouraging suburban residents not to drive into the City, subsidization of the commuter rails minimizes congestion and pollution levels associated with greater use of automobiles in the city; encourages business to locate in the City; and provides additional fare-paying passengers to the City subway and bus system. In these respects and in others, subsidizing the commuter rails may bring material benefits to the minority riders of the subway and bus system. The district court dismissed such factors, concluding that the MTA board did not explicitly consider them before voting on the NYCTA and commuter line fare increases. That finding is largely irrelevant to whether such considerations would justify the relative allocation of total funds to the NYCTA and the commuter lines (emphasis added).

Similarly, in Young by and through Young v. Montgomery County (Ala) Bd. of Educ.,⁶⁴ the court ruled that even if a disparate impact were assumed, the defendants had established a "substantial legitimate justification."

[T]he Defendants presented evidence that Policy IDFA was adopted to address concerns that the M to M transfer program was being used to facilitate athletic recruiting in the Montgomery County school system and to help revitalize Montgomery’s west side [minority] high schools. Both of these justifications are substantial and legitimate because they evince a genuine attempt by the Board of Education to improve the quality of education offered in [the] County.⁶⁵

If a substantial legitimate justification is identified, the third stage of the disparate impact analysis is the challenging party’s identification of a less discriminatory alternative.⁶⁶ If there is an alternative policy or procedure that has less of an adverse impact but achieves the goals that were determined to be legitimate, the recipient should use that policy or procedure.

3.    Retaliation

A right cannot exist in the absence of some credible and effective mechanism for its enforcement and enforcement cannot occur in the absence of a beneficiary class willing and able to assert the right. In order to ensure that beneficiaries are willing and able to participate in the enforcement of their own rights, a recipient’s retaliation against a person who has filed a complaint or who assists enforcement agencies in discharging their investigative duties violates Title IX.⁶⁷

The Title IX regulations incorporate the requirement in the Title VI regulations, which provides that "[n]o recipient or other person shall intimidate, threaten, coerce, or discriminate against any individual for the purpose of interfering with any right or privilege secured by [Title VI], or because he has made a complaint, testified, assisted, or participated in any manner in an investigation, proceeding or hearing under this subpart."⁶⁸

Retaliation protections are designed to preserve the integrity and effectiveness of the enforcement process itself. Because of this purpose, the merits of any underlying complaint of sex discrimination are irrelevant in assessing a retaliation complaint.⁶⁹ The prohibited conduct is the act of retaliation itself.

Moreover, protected activities include more than filing complaints seeking a vindication of personal rights.⁷⁰ The Department believes that a narrow reading requiring the prior exercise of personal rights is inconsistent with the broad remedial purposes behind Title IX itself.⁷¹ It is important to re-emphasize that Title VI agency anti-retaliation regulations (incorporated into Title IX regulations) provide "[n]o recipient or other person shall intimidate, threaten, coerce, or discriminate against any individual for the purpose of interfering with any right or privilege secured by [Title VI], . . ." Thus, anyone who asserts rights secured by Title IX is protected. Retaliation claims have their own remedial purpose in that they seek to ensure that rights created under a federal civil rights statute do not go unenforced for fear of adverse official reaction.⁷² This goal is undercut if recipients are allowed to retaliate against persons subject to their authority who publicly object to discrimination against others.

Four elements must be established to make out a prima facie case of retaliation:

1.    The complainant engaged in activities or asserted rights protected under Title IX;

2.    The recipient knew of the protected activity;

3.    The recipient thereafter subjected the person to adverse action, treatment or conditions; and

4.    There is a causal connection between the protected activity and the adverse action, treatment or conditions.⁷³

Once a prima facie case of retaliation is established, the investigating agency must then determine whether the recipient can articulate a legitimate, nondiscriminatory reason for the adverse action. Id. If the recipient can offer such a reason, the investigating agency must then show that the recipient’s proffered reason is pretextual and that the recipient’s actual reason was retaliation. Id. A showing of pretext may be sufficient to support an inference of retaliation if the fact finder concludes that retaliation was the real purpose of the action. Id.

B.    Employment Discrimination