Background checks before hiring in Texas: the FCRA steps, criminal history, and a process you can defend

Most employers think of a background check as a search: order the report, read it, decide. Legally, it is a process with steps, and most of the lawsuits come from skipping a step, not from what the report said. Done well, a background check protects your people and your customers. Done carelessly, it becomes a class action over a form, or a discrimination claim over a decision nobody can explain.

What a background check can include

• Criminal history, at the county, state, and federal level
• Employment and education verification, and professional licenses
• Motor vehicle records for anyone who drives for the job
• Credit history, for a narrow set of financial roles
• Reference checks
• A social media and internet search
• A drug test

Some Texas employers do not get to choose. Health care, child care, schools, security, and transportation employers often have background check requirements set by statute or by their licensing agency. Start by confirming what your industry requires.

The federal steps when you use a background check company

When a third party prepares the report, it is a “consumer report” under the federal Fair Credit Reporting Act, and the employer has its own obligations:

1. A standalone disclosure. Before ordering, give the applicant a clear written disclosure, in a document that consists solely of the disclosure, that a report may be obtained. Extra language, such as a liability waiver or a paragraph of state notices, has been the basis for a large number of class actions.
2. Written authorization from the applicant.
3. A certification to the vendor that you will follow the law.
4. A pre-adverse action notice. Before deciding against someone based even in part on the report, send a copy of the report and the federal summary of rights, and give the person a real chance to respond. Many employers wait at least five business days.
5. A final adverse action notice with the required information about the vendor and the person’s rights.
6. Secure disposal of the reports when you no longer need them.

If the vendor interviews neighbors, former coworkers, or references about character or reputation, that is an investigative consumer report, which comes with an additional disclosure.

Texas rules on criminal history

• Older records. Texas generally bars background check companies from reporting criminal records whose disposition, release, or parole was more than seven years ago, unless the job pays, or is reasonably expected to pay, $75,000 or more a year.
• Sealed records. Expunged records, and records covered by an order of nondisclosure, generally should not be reported or used.
• Negligent hiring. Texas limits negligent hiring and supervision claims based only on an employee’s criminal conviction, with exceptions, including where the employer knew or should have known of a conviction for an offense related to the job or a serious violent or sexual offense. A thoughtful, documented check is still the best protection.
• Local “fair chance” rules. Austin adopted a fair chance hiring ordinance for private employers in 2016. A 2023 state law was designed to preempt local employment ordinances like it, and after an appeals court ruling in 2025 the ordinance is widely treated as unenforceable against private employers. Check the current status before relying on either position.

Weighing criminal history fairly

Federal law does not ban criminal history checks. But Title VII prohibits practices that disproportionately exclude people by race or national origin unless they are job-related and consistent with business necessity, and a blanket “no felonies” rule is exactly the kind of practice that draws that challenge. Federal enforcement priorities shifted in 2025, but the statute did not change, and private plaintiffs can still bring these claims.

The practical answer is the same one that has worked for years. Look at three things, and write down that you did:

• The nature and seriousness of the offense.
• How long ago it happened, and what the person has done since.
• How it relates to the job. A theft conviction matters for a cashier in a way a decades-old traffic offense does not.

Treat arrests differently from convictions, because an arrest alone does not show that anything happened. Give the person a chance to explain before a final decision; the explanation sometimes changes everything, from mistaken identity to a record that should not have been reported.

A process you can defend

1. A written policy that says which checks apply to which positions, and why.
2. Timing. Run checks after a conditional offer when you can. It keeps the decision focused on the one issue, and it fits the federal rules for medical questions, which must wait until after an offer.
3. The same checks for everyone in the same role. Checking only some finalists is how a neutral process becomes a discrimination claim.
4. A decision guide that sets out which results matter for which jobs, applied by a trained decision-maker, not by whoever reads the report first.
5. A vendor review. Your vendor’s accuracy and its forms are your risk too.
6. Records. Keep the decision documentation for at least the federal retention period, and store reports securely and separately.

One note: the I-9 is not a background check. Employment eligibility verification has its own rules and timing, and it should never be used to screen candidates before an offer.

How Crawford Law can help

Crawford Law would be happy to audit your system: the disclosure and authorization forms, the adverse action letters, the decision guide, the vendor agreement, and whether the process is applied consistently. Or bring a specific issue, such as a candidate with an old conviction, a report that looks wrong, or a decision you need to make this week. Background checks are part of the firm’s workplace practice and its hiring consulting. Start with a free call.