Employee Background Check Laws in Texas

The Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., establishes the primary framework governing background checks across all states, including Texas. Under the FCRA, employers who use third-party background check companies (consumer reporting agencies) must obtain clear written disclosure and consent from the applicant before the background check is conducted. The consent must be in writing and stand alone; it cannot be buried in an employment application. Employers are also prohibited from obtaining background reports without proper authorization.

When an employer intends to deny employment, deny promotion, or take any adverse action based on information in a background report, the FCRA requires the employer to provide a pre-adverse action notice. This notice must be separate from the hiring decision and must include a copy of the report and the applicant's rights under the Fair Credit Reporting Act. The applicant must be given a reasonable opportunity to dispute the information before final denial.

The FCRA applies to all employers that use third-party background check providers. The Federal Trade Commission (FTC) enforces FCRA provisions against background check companies and employers. Applicants may also sue employers directly under the FCRA for violations. Remedies include actual damages, statutory damages of $100 to $1,000 per violation, attorney fees, and court costs. Additionally, the Equal Employment Opportunity Commission (EEOC) enforces Title VII of the Civil Rights Act of 1964 to prevent employers from using background checks in a way that has a disparate impact on protected classes (race, color, religion, sex, or national origin).

Texas does not have a state-specific background check law that supplements or replaces federal FCRA requirements. All background check protections in Texas derive from federal law. However, Texas Labor Code § 52.006 requires employers to consider whether the applicant's criminal history is directly related to the job and to consider the time elapsed since conviction, among other factors, before denying employment based on a criminal conviction.

This statute creates a duty of individualized assessment. Employers cannot apply a blanket ban on hiring applicants with criminal records; instead, they must evaluate whether the conviction directly relates to the specific job duties. This applies to all Texas employers with employees, regardless of size. While this is not a true background check statute, it substantially impacts how employers may use criminal background information obtained through any background check.

Texas employers must still comply with all FCRA requirements: obtaining written consent, providing adverse action notices, and giving applicants time to dispute. The state does not impose shorter consent timelines, more restrictive notice requirements, or broader applicant rights than the FCRA. However, § 52.006 does limit how employers may legally use the criminal background information once obtained. Employers who use background checks must therefore ensure that any denial based on criminal history complies with both the FCRA process and § 52.006's substantive restrictions on criminal history consideration.

Texas courts have interpreted § 52.006 to require employers to explain the relationship between the criminal conviction and the job when denying employment. This adds an evidentiary burden beyond the FCRA's purely procedural requirements. The statute applies regardless of whether the check was run by a third party or in-house, making it a uniquely Texas consideration for criminal background information specifically.

The FCRA contains several important exceptions. First, employers may conduct background checks internally without FCRA compliance if they do not use a third-party consumer reporting agency and the information is not obtained from a consumer reporting agency. However, most employers use third-party services, so this exception is narrow in practice. Second, certain employers such as banks and insurance companies may have additional regulatory exemptions or requirements.

Second, the FCRA does not apply to background checks conducted entirely by the employer with information the employer already possesses or obtains directly from the source (e.g., calling a former employer directly). However, the moment an employer pays a third party to compile or verify background information, the FCRA applies.

Third, under Texas Labor Code § 52.006, the criminal history exception allows employers to deny employment if the applicant's criminal history directly relates to the job duties or the applicant has not demonstrated sufficient rehabilitation. This is not a blanket exception but rather a narrow carve-out that still requires individualized assessment. Employers cannot argue that "all applicants with criminal records are excluded" as a class.

Fourth, employers are not required to hire applicants with any particular criminal history; they may legally deny employment if the relationship is direct and the applicant shows no rehabilitation. Fifth, the FCRA permits background reports to exclude certain information after statute of limitations periods expire (seven years for most items, ten for bankruptcy). Sixth, employers hiring for positions requiring government security clearances or working with vulnerable populations may have additional regulatory exemptions under federal law, though these do not override FCRA consent and notice requirements.

Step 1: Document Everything. If you believe a background check was run improperly, keep records of all communications with the employer, including the job application, any written disclosures presented, emails about the background check process, and any notices received. Save the actual background report if the employer provided it. Document dates of all communications and notes about what was said in phone calls. Store copies in a safe place (cloud storage or email to yourself) to preserve them if your access to employer systems is revoked.

Step 2: Internal Complaint Process. Before filing with an agency, send a written email or letter to the employer's HR or legal department explaining the specific FCRA violation. For example: "I was not provided written consent before my background check was run" or "I did not receive an adverse action notice before you denied my job offer." Request a response within 10 business days. Keep this communication brief and factual, not emotional. This step is optional but helpful because it may resolve the issue quickly and demonstrates your attempt to resolve internally, which strengthens any future legal claim. Most employers will not cure violations at this stage, but it creates a paper trail.

Step 3: File with the FTC or EEOC. The Federal Trade Commission (FTC) investigates FCRA violations by employers and background check companies. File a complaint at https://reportfraud.ftc.gov/ or mail a detailed complaint to the FTC at 600 Pennsylvania Avenue, NW, Washington, DC 20580. Include: your full name and contact information, the employer's name and address, the date the background check was run, what FCRA rights were violated (no written consent, no adverse action notice, no dispute opportunity), and any damages you suffered (e.g., you were not hired, lost wages).

If you believe the employer used the background check in a way that discriminated based on race, color, religion, sex, or national origin, you may also file with the Equal Employment Opportunity Commission (EEOC) at https://www.eeoc.gov/filing-charge. File within 180 days of the violation (or 300 days in states with deferral agreements; Texas does not have one, so 180 days applies). Provide the same factual information and explain how the background check was used in a discriminatory manner.

Step 4: Agency Investigation. The FTC does not conduct formal investigations of individual complaints but compiles data to detect patterns. However, if your complaint is part of a widespread violation, the FTC may investigate the background check company or employer. Response timeline varies from weeks to months. The EEOC will assign your charge a number and may investigate if it identifies a viable discrimination claim. The EEOC investigation typically takes 90-180 days. You will be notified in writing of the outcome ("right to sue" letter or dismissal with explanation). If you receive a right-to-sue letter, you have 90 days to file a lawsuit.

Step 5: Consult an Attorney. If the FTC or EEOC does not resolve the matter or if you suffered significant damages (e.g., you lost a job offer, incurred emotional distress, or the employer ran checks on multiple employees without consent), consult an employment law attorney licensed in Texas. FCRA violations are attorney fee-shifting; if you win, the employer pays your attorney. Many attorneys work on contingency (no upfront cost). Look for attorneys with experience in FCRA claims, not just general employment law.