What should a Texas employer do before rejecting an applicant after a background check?
The background check itself is rarely the legal problem. Skipping the federally required steps between the report and the rejection is.
Last updated: July 03, 2026
Direct Answer
Before rejecting an applicant based on a background check from a screening company, federal law requires a two-step adverse action process: first send the applicant a pre-adverse action notice with a copy of the report and the Summary of Rights, wait a reasonable period, generally five business days, for the applicant to respond or dispute, and only then issue the final adverse action notice. Employers should also individually assess criminal history rather than applying blanket exclusions.
The Process That Protects You
The Fair Credit Reporting Act governs any background report obtained from a third-party screening company: standalone written disclosure and authorization before ordering the report, then the two-notice adverse action sequence before acting on it. FCRA class actions are built on employers who buried the disclosure in the application or skipped the pre-adverse notice, and the statutory damages accumulate per applicant.
Individualized assessment is the discrimination side of the same decision. The EEOC's position is that blanket bans on criminal history can create disparate impact liability, so the defensible approach considers the nature of the offense, the time elapsed, and the relevance to the specific job before rejecting. A written worksheet documenting that assessment converts a risky gut call into a defensible decision.
What Texas Adds
Texas has no statewide ban-the-box law for private employers, so asking about criminal history on the application remains lawful for most private hiring in most of the state. Austin has a fair chance ordinance restricting when private employers in the city may ask, and public-sector hiring rules differ, so location and sector matter.
Texas law also limits what screening companies may report in some circumstances and provides negligent hiring protections to employers who follow structured processes. The practical rule stands regardless: order reports only with proper disclosure, run the two-step process every time, and document the individualized assessment.
Screening Risks to Watch
Background check liability is procedural, which means it is entirely preventable. Watch for these.
- Disclosure and authorization language embedded inside the application instead of standalone
- Rejections issued the same day the report arrives, with no pre-adverse notice
- Blanket no-felony rules applied to every position
- Different screening standards applied to similar candidates
- Old or irrelevant offenses driving decisions with no documented assessment
What to Review Before You Act
Audit your screening packet: standalone disclosure, valid authorization, both FCRA notices templated and actually used, and a written individualized assessment form. If any piece is missing, fix it before the next hire.
If you hire in Austin or for public entities, confirm your application and interview scripts match the local rules for when criminal history questions may be asked.
When to Get HR Help
Get help building the adverse action workflow once, because every subsequent hire runs through it automatically and the per-applicant exposure disappears.
If an applicant has already disputed a report or threatened an FCRA claim, respond through the process rather than around it.
Get a Straight Answer for Your Situation
General rules only go so far. If this question is live in your organization right now, talk it through with a senior HR consultant before you act. One conversation now costs less than one claim later.
Contact UsThis page provides general HR information for employers and is not legal advice. For legal interpretation or representation, consult qualified employment counsel.