JUNE 2025 SCREENING COMPLIANCE UPDATE
This monthly publication is intended to bring to your attention screening industry related articles written by subject matter experts and published online to assist you with establishing and keeping a compliant background screening program.
PLEASE NOTE: Spelling of words in international articles such as those written in the British English format are native to the original author and may differ from the spelling of some words in the American English format.
STATE, CITY, COUNTY AND MUNICIPAL DEVELOPMENTS
North Dakota Enacts Financial Data Security and Data Breach Notification Requirements
On April 11, 2025, the North Dakota governor signed H.B. 1127 (the “Act”), which establishes new data security measures and breach notification obligations for financial corporations. Covered entities include those that are regulated by the North Dakota Department of Financial Institutions and exclude financial institutions, such as banks, and credit unions.
Key requirements, which mirror requirements under the federal Gramm-Leach-Bliley Act Safeguards Rule, include the following:
• implementing a comprehensive information security program, including maintaining appropriate administrative, technical and physical safeguards;
• designating a qualified individual responsible for overseeing, implementing and enforcing the financial corporation’s information security program;
• basing an information security program on periodic risk assessments that incorporate designated content requirements and identify reasonably foreseeable internal and external risks to the security, confidentiality and integrity of customer information, and reassessing the sufficiency of any safeguards in place to control these risks;
• implementing safeguards to control the risks identified through the risk assessment, including but not limited to (1) implementing and periodically reviewing access controls; (2) implementing encryption of customer information held or transmitted by the financial corporation both in transit over external networks and at rest; (3) adopting secure development practices for in-house developed applications; (4) implementing multifactor authentication for any individual accessing any information system (unless the financial corporation’s qualified individual has approved in writing the use of a reasonably equivalent or more secure access control); (5) monitoring and logging user activity and (6) conducting continuous monitoring or periodic penetration testing and vulnerability assessments;
• implementing a written incident response plan that addresses (1) the goals of the plan; (2) internal processes for responding to a security event; (3) clear roles, responsibilities, and levels of decision-making authority; (4) external and internal communications and information sharing; (5) requirements for remediating identified weaknesses in information systems and controls; (6) documentation and reporting regarding security events and related incident response activities and (7) evaluation and revision of the plan as necessary after a security event;
• providing personnel with security awareness training that is updated as necessary to reflect risks identified by the risk assessment;
• overseeing service providers by (1) taking reasonable steps to select and retain service providers capable of maintaining appropriate reasonable safeguards for customer information; (2) contractually requiring them to implement and maintain these safeguards and (3) periodically assessing the service providers based on the risk they present and the adequacy of their safeguards.
• requiring the qualified individual provide reports in writing, at least annually, to the financial corporation’s board of directors or equivalent governing body addressing (1) the overall status of the security program and compliance with the Act and (2) material matters related to the information security program (e.g., risk assessments, security events, and recommendations for changes to the program).
The Act also imposes new requirements regarding security incidents (i.e., “notification events”). A “notification event” means the acquisition of unencrypted customer information without the authorization of the individual to which the information pertains. Financial corporations must notify the Department of Financial Institutions as soon as possible and no later than 45 days after discovering a notification event that involves the information of at least 500 consumers. Notably, the Act specifies that a notification event “must be treated as discovered on the first day when the event is known to the financial corporation. A financial corporation is deemed to have knowledge of a notification event if the event is known to any employee, officer, or other agent of the financial corporation, other than the person committing the breach.” The Act will take effect on August 1, 2025.
Source: Lexology- Hunton Andrews Kurth
https://www.lexology.com/library/detail.aspx?g=f98be42f-aff0-4958-b59f-aec8b663bcc8&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=ACC+Newsstand+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2025-06-04&utm_term=
New Minneapolis Civil Rights Amendment Expands Risk for Employers
• Effective Aug. 1, 2025, businesses with employees in Minneapolis face expanded risk
• Minneapolis adds height, weight, housing status, and “justice-impacted” status to protected categories
• Minneapolis broadens its definition of qualifying disability
Last month, Minneapolis adopted several amendments to the city’s anti-discrimination ordinance substantially expanding the law’s protections, which will apply to Minneapolis employers effective Aug. 1, 2025. These amendments will apply to not only employers with operations located within Minneapolis, but also to any business that employs at least one person performing services within Minneapolis.
A. Amendments Reinforce State/Federal Protections
A portion of the amendments focused on mirroring state/federal law protections, such as the CROWN Act, which protects people from discrimination based on race-based physical traits (e.g., hair), and incorporates protections from the federal Pregnant Workers Fairness Act, which requires employers to provide pregnancy-related workplace accommodations.
B. Amendments Add New Categories
The amendments also added new protected categories, including:
• height and weight,
• housing status, and
• “justice-impacted” status.
While relatively rare, a growing number of jurisdictions throughout the country (such as New York and San Francisco) have adopted similar appearance-based protections against height and weight discrimination for employees. In addition to numerical measurements of a person’s height or weight, Minneapolis’ ordinance also outlaws bias based on the “impression” an employer has of a person’s body size regardless of the numbers. The subjective aspect of the amended ordinance may make compliance with the prohibition against bias based on a person’s height and weight uniquely challenging for employers. However, the ordinance explicitly allows employers to assert as a defense to allegations of height or weight bias that the person’s body size prevents them from performing core job duties and no reasonable accommodation exists that wouldn’t unduly burden the business or pose a “direct threat” to health and safety.
“Justice-impacted” status is defined in the ordinance as “the state of having a criminal record or history,” including arrests, convictions, periods of incarceration or probation. Under current Minnesota state law, employers generally are barred from inquiring into or considering an applicant’s criminal record until they have been selected for an interview or, in the absence of an interview, a conditional job offer has been made.
The new amendment adds the requirement that adverse employment decisions, like a refusal to hire someone, must be “reasonably based on the relationship” between the conduct underlying a person’s criminal history and their ability and fitness to perform the job. To determine whether an adverse decision is reasonable based on that relationship, the amendment lays out these factors: if a person was convicted of an offense, how much time has passed since the alleged offense or conviction; the nature of the crime; a person’s age at the time of the offense; evidence of rehabilitation efforts that support the prospective employee; and “any unreasonable risk” to specific people, property or the general public. The amendment precludes employers from making an adverse employment decision based on an arrest which did not result in a conviction, unless charges stemming from the arrest are still pending.
The amended ordinance has an exception for situations where refusal to hire is necessary to comply with state or federal laws or regulations.
The amendments also add housing status as a protected class, which is defined as those who may or may not have “a fixed, regular, and adequate nighttime residence.” Except as required or authorized by federal or state law, regulation, rule or government contract, it will be unlawful for an employer to refuse to hire or terminate an applicant or employee based on their housing status unless such action is because of a legitimate business justification not otherwise prohibited by law.
C. Amendments Expand the Definition of Disability
The amendments also changed basis on which an individual is considered disabled for purposes of the law’s prohibition of disability discrimination. Previously, the definition of a person with a disability in the Minneapolis ordinance mirrored the federal ADA standard—i.e., was someone who has a “physical, sensory or mental impairment” that “materially limits” at least one major life activity, had a record of such an impairment, or is perceived to have such an impairment. Now, though, it will include impairments which are “episodic or in remission” and “would materially limit a major life activity when active.”
D. Practical Advice for Employers Affected
In sum, these amendments greatly expand the risk of claims of discrimination against businesses within Minneapolis or with employees performing services in Minneapolis. These businesses face charges filed with the Minneapolis Commission on Civil Rights, which has the authority to order broad relief, including hiring, reinstatement, and backpay. Given these changes, it is imperative that businesses within or with employees performing services in Minneapolis review their policies and internal procedures to ensure they are compliant with the new requirements.
Source: Lexology- Barnes & Thornburg LLP- Rebecca J. Bernhard, Jennifer Service and Christopher Rubey
https://www.lexology.com/library/detail.aspx?g=b7f07a53-77a0-493a-911b-b6e97387c80f&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=ACC+Newsstand+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2025-06-10&utm_term=
New Requirements for Washington State Employers
In recent weeks, Washington State Governor Bob Ferguson signed numerous employment-related bills, amending employer obligations and employee rights related to pay transparency, paid leave, use of criminal records, personnel records, child labor, pregnancy accommodations, and more.
Changes to the Equal Pay and Opportunities Act
SB 5408 makes significant changes to the Equal Pay and Opportunities Act, providing some relief to employers.
Key provisions include the following:
• Opportunity to cure: A job posting made on or before July 27, 2027 is eligible for a five-day correction period after written notice, during which penalties or damages will not be assessed. This change provides welcome relief to employers facing increased class action activity based on allegedly deficient postings because employers will now be given the opportunity to cure deficient postings before class action litigation is filed.
• Disclosure requirements: Under existing law, an employer with 15 or more employees must include the wage scale or salary range and a general description of all benefits and other compensation in each job posting. The amendments clarify that, if an employer offers a fixed wage amount for an internal transfer or promotion, it can list that amount instead of a scale or range.
• Definition of “posting:” The amended law clarifies that postings that are replicated without employer consent, such as those scraped by third parties, are not considered official job postings.
• Remedies: The amended law outlines two separate and exclusive remedies:
o Administrative remedies: The amended law authorizes the director of the Department of Labor and Industries to order an employer to pay each affected job applicant or employee statutory damages of no less than $100 and no more than $5,000 per violation based on factors such as willfulness, repeat violations, employer size, and deterrence.
o Private civil action: The amended law expressly provides for a private right of action. A prevailing job applicant or employee is entitled to statutory damages of no less than $100 and no more than $5,000 per violation, plus reasonable attorneys’ fees and costs. The amendment clarifies that a court should consider the willfulness factors listed above in its determination of damages.
Expanded Fair Chance Act obligations
Effective July 1, 2026, HB 1747 significantly amends Washington’s Fair Chance Act, increasing protections for job applicants and employees with criminal records and imposing new requirements on employers.
Key provisions include the following:
• Conditional offers: An employer may not inquire about or obtain criminal record information until it has 1) determined that the applicant is otherwise qualified and 2) made a conditional offer of employment.
• Blanket exclusions: An employer is prohibited from advertising or implementing policies that categorically exclude individuals with criminal records from consideration.
• Arrest and juvenile records: An employer may not take adverse employment actions based on arrest records or juvenile conviction records.
• Adult conviction records: Adverse action based on adult conviction records is only permitted if the employer has documented a legitimate business reason, considering factors such as the seriousness of the offense, time elapsed, and evidence of rehabilitation.
• Notice and opportunity to respond: Before taking adverse action, an employer must notify the individual of the pre-adverse action, identify the record relied upon, and provide at least two business days for the individual to respond or provide mitigating information.
• Written decisions: If adverse action is taken, the employer must provide a written explanation detailing the reasoning and assessment of the relevant statutory factors and the employer’s consideration of the applicant’s rehabilitation, good conduct, work experience, education, and training.
• Penalties: The Attorney General enforces the law, with increased penalties up to $1,500 for a first violation, $3,000 for a second, and $15,000 for subsequent violations, per aggrieved party.
Employers are encouraged to review and revise hiring practices, job advertisements, and background check procedures to ensure compliance. Companies are also encouraged to establish documentation and communication protocols for adverse actions based on criminal records.
Expanded Fair Chance Act obligations
Effective July 1, 2026, HB 1747 significantly amends Washington’s Fair Chance Act, increasing protections for job applicants and employees with criminal records and imposing new requirements on employers.
Key provisions include the following:
• Conditional offers: An employer may not inquire about or obtain criminal record information until it has 1) determined that the applicant is otherwise qualified and 2) made a conditional offer of employment.
• Blanket exclusions: An employer is prohibited from advertising or implementing policies that categorically exclude individuals with criminal records from consideration.
• Arrest and juvenile records: An employer may not take adverse employment actions based on arrest records or juvenile conviction records.
• Adult conviction records: Adverse action based on adult conviction records is only permitted if the employer has documented a legitimate business reason, considering factors such as the seriousness of the offense, time elapsed, and evidence of rehabilitation.
• Notice and opportunity to respond: Before taking adverse action, an employer must notify the individual of the pre-adverse action, identify the record relied upon, and provide at least two business days for the individual to respond or provide mitigating information.
• Written decisions: If adverse action is taken, the employer must provide a written explanation detailing the reasoning and assessment of the relevant statutory factors and the employer’s consideration of the applicant’s rehabilitation, good conduct, work experience, education, and training.
• Penalties: The Attorney General enforces the law, with increased penalties up to $1,500 for a first violation, $3,000 for a second, and $15,000 for subsequent violations, per aggrieved party.
Employers are encouraged to review and revise hiring practices, job advertisements, and background check procedures to ensure compliance. Companies are also encouraged to establish documentation and communication protocols for adverse actions based on criminal records.
Source: Lexology- DLA Pipper- Alexandria Cates
https://www.lexology.com/library/detail.aspx?g=d06c4856-4994-4e32-9692-c8e14128fc5b&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=ACC+Newsstand+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2025-06-11&utm_term=
New Jersey adopts pay transparency law
The New Jersey Pay and Benefit Transparency Act is the latest U.S. pay transparency law. As of this month, covered employers must disclose pay, benefits and other compensation programs in external job postings and for internal promotional opportunities. The law took effect June 1.
With this law, New Jersey joins 11 states and the District of Columbia in requiring employers to provide job seekers and current employees with access to compensation information.
Who’s covered?
The Act applies to employers with 10 or more employees over 20 calendar weeks that do business, employ workers, or take applications for public or private employment in New Jersey. This includes job placement and referral agencies.
New Jersey Department of Labor & Workforce Development (NJDOL) offers helpful guidance.
What’s required?
Job Postings: Internal and external job postings and advertisements for a new position, or opportunity for promotion, must include the following: (1) the hourly wage or salary (or range), and (2) a general description of benefits and other compensation programs for which the employee would be eligible.
• Non-New Jersey employers must comply with the Act if they do business in New Jersey or advertise positions to New Jersey applicants.
• Unlike “covered employers,” temporary help service firms or consulting firms need provide only the hourly wage or salary (or range) to an applicant at the time of interview or hire for a specific job opening.
A covered employer is not prohibited from increasing the wages, benefits, or other compensation identified in the posting when it makes an offer of employment to an applicant.
Promotions: Covered employers must make reasonable efforts to announce and post internal promotion opportunities to all current employees in the affected department(s) before making a promotion decision. However, covered employers are not required to provide notice of promotions that are awarded to current employees based on years of experience or performance, or that are made based on an unforeseen need.
Penalties for non-compliance
Covered employers who violate the Act are subject to civil penalties of $300 for the first violation and $600 for each subsequent violation.
Suggestions for employers
Again, the pay transparency law is in effect now. Here are some actions that covered employers should take:
• Review and revise existing job posts, internal promotion and transfer notices, and third-party recruitment postings, in accordance with the Act.
• Review and update job posting and notice templates, as well as posting practices and procedures, to ensure that posts and advertisements identify hourly wage or salary, benefits, and other compensation.
• Be mindful of the overlapping requirements of New Jersey’s Law Against Discrimination. Enacted in 2018, the Diane B. Allen Equal Pay Act prohibits employers from discriminating with respect to pay, benefits, or compensation based on any protected characteristic under the NJLAD. The Equal Pay Act expanded the remedies for pay discrimination, required employees performing substantially similar work to be compensated equally, broadened protections for retaliation, and established new reporting requirements for employers contracting with the State of New Jersey.
• Train human resources and recruiting staff on the new requirements of the Transparency Act, its overlap with the NJLAD, and the importance of compliance.
• If you’re a multi-state employer, review postings, policies, and procedures for compliance with current pay equity and transparency laws nationwide.
Source: Lexology- Constancy Brooks Smith & Prophete LLP- Danielle Pierre
https://www.lexology.com/library/detail.aspx?g=7596ed69-fcd5-4cdb-886f-de958fd56b8c&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=ACC+Newsstand+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2025-06-19&utm_term=
New Hiring and Employment Records Laws Take Effect in Washington State
During the 2025 legislative session, Washington State enacted several new measures that will significantly impact employer obligations related to hiring practices and personnel recordkeeping. Two statewide bills—HB 1308 and HB 1747—make important changes to employee access to personnel files and the timing and use of criminal background checks in hiring. In addition, the Spokane City Council adopted a local ordinance restricting the use of residential address information in the early stages of the hiring process. These laws reflect a broader legislative focus on increasing transparency for workers and reducing barriers to employment. Read on to understand the implications of these new laws and learn what steps employers should take to prepare for these changes.
HB 1308—New Statewide Right to a Complete Copy of Personnel Records
Washington has long required employers to allow employees to inspect “personnel records,” but the statute did not provide the employee a right to a copy of a personnel file and was silent on what belongs in the file. (RCW 49.12.240, .250). HB 1308 now fills those gaps and includes several other significant changes, beginning July 27, 2025.
Key Provisions of HB 1308 Include:
• Clear definition of personnel file. A “personnel file” now expressly includes job applications, performance evaluations, non-active or closed disciplinary records, leave or accommodation paperwork, payroll records, and employment agreements, if those documents otherwise exist. This statute does not require those documents to be created (but note, other statutes may require specific documents, such as payroll records).
• 21-day, no-fee file deadline. Private employers must provide a complete copy of the personnel file within 21 calendar days of any request by a current or former employee (or authorized representative), at no cost to the employee. This is a change from the current law, which only required personnel files be made available locally for inspection by the employee.
• 21-day termination statement deadline. The deadline for providing a written statement as to the date and reason of termination is extended to 21 days after receipt of a written request of a former employee or their representative.
• Public sector employers continue to process requests under the Public Records Act.
• Private cause of action and escalating statutory damages. The new law now expressly includes a private cause of action for employees to enforce the statute in superior court. If a deadline is missed, statutory damages for each violation is $250 if the requested files or written statement are not provided within 21 days of the request. These damages rise to $500 if the file is not provided within 28 days of the request, and $1,000 after day 35, plus reasonable attorneys’ fees. The statute also imposes $500 in statutory damages for “any other violations.” An employee must give at least five days’ notice before filing suit.
Key Employer Takeaways from HB 1308
No later than July 27, 2025, employers should ensure that HR personnel and front-line supervisors are properly trained on the new statutory requirements. Supervisors in particular should understand that any employee inquiry about access to their personnel records, even informal ones, must be referred to HR. Employers should also review and update employee handbooks or internal policies to reflect the new process for requesting personnel records, including the 21-day deadline and the types of documents that will be provided in response.
Furthermore, because the statute imposes escalating statutory damages and attorneys’ fees for untimely production, employers should establish a calendar-tracked workflow for managing written requests and maintain documentation of compliance with the deadline. Employers should also be prepared to issue a signed statement confirming the date and reason for an employee’s separation upon written request.
HB 1747—Changes to Obtaining and Using Criminal Background Checks
Effective July 1, 2026 for employers with 15 or more employees, and effective January 1, 2027 for employers with less than 15 employees, HB 1747 makes significant changes to Washington’s Fair Chance Act (RCW 49.94), reshaping when and how employers can inquire into and consider an applicant’s criminal history.
Obtaining and Using Criminal Background Checks
While the original 2018 law prohibited employers from asking about criminal convictions on an initial job application, HB 1747 goes further by requiring that all criminal history inquiries and background checks be delayed until after a conditional offer of employment has been made. This applies not just to written applications, but also to interviews, recruiter discussions, and any form of screening conducted before the conditional offer stage.
The bill also imposes new restrictions on how criminal history may be used once it is obtained. Employers are prohibited from taking adverse action based on arrests that did not lead to conviction and from considering juvenile convictions at all. If an employer intends to take adverse action based on an adult conviction, they must now be able to demonstrate a “legitimate business reason,” supported by an individualized assessment of six statutory factors:
• The seriousness of the offense;
• The number and types of convictions;
• The time elapsed since the conviction;
• Evidence of rehabilitation or subsequent good conduct;
• The nature and duties of the job sought and applicant’s ability to perform; and
• The work environment and the place and manner in which the job would be performed.
Mandatory Waiting Period for Applicant Response
In addition, HB 1747 introduces a mandatory two-business-day waiting period after the applicant is notified of the potentially disqualifying conviction. During this time, the applicant must be given an opportunity to respond with additional information, including evidence of rehabilitation or explanation of the circumstances. If the employer decides to proceed with withdrawing the offer or taking other adverse action, it must provide a written explanation outlining the legitimate business reason and how the relevant factors were considered.
Increased Penalties for Employer Violations
Penalties for violations have also been increased. Employers may face civil penalties of up to $1,500 for a first violation, $3,000 for a second, and $15,000 for each subsequent violation, with damages payable directly to the affected applicant or employee. The law also adds an express prohibition against retaliation for asserting rights under the Act. Enforcement authority remains with the Washington Attorney General’s Office, which is empowered to investigate violations, impose administrative penalties, and pursue legal action in court for penalties, unpaid wages, costs, and attorney fees.
Key Employer Takeaways from HB 1747
To comply with HB 1747, employers should revise hiring procedures to ensure that criminal history inquiries and background checks occur only after a conditional offer has been made. Recruiters and hiring managers must be trained to avoid any pre-offer discussion of criminal history, and all application materials should be updated accordingly. Employers will also need to implement a documented, individualized assessment process before taking adverse action based on an adult conviction and must wait two business days after notifying the applicant before proceeding. New templates and workflows should be developed to support these requirements, and background check vendors should be reviewed for compliance.
Spokane’s “Ban the Address” Ordinance
On April 22, 2025, the Spokane City Council approved a groundbreaking fair chance hiring ordinance, known as the “Ban the Address” ordinance, by a 6–1 vote. This first-of-its-kind legislation prohibits employers from inquiring about a job applicant’s current or prior residential address—or otherwise using housing status as a screening criterion—until after a provisional offer of employment has been made. The ordinance aims to prevent discrimination against unhoused individuals and those using shelter addresses or P.O. boxes, ensuring that qualified applicants are not excluded from consideration based on their housing status.
Mayor Lisa Brown signed the ordinance into law on April 25, 2025, and it took effect on May 25, 2025.
Key Provisions of Spokane’s “Ban the Address” Ordinance Include:
• Prohibition on address inquiries: Employers may not ask for an applicant’s address or housing history until after a provisional offer of employment has been extended.
• Protection against housing status discrimination: Employers cannot reject applicants solely because they are unhoused, live in shelters, or use P.O. boxes.
• Allowable contact information: Employers may provide an opportunity for an applicant to provide a mailing address or preferred method of contact solely for communication purposes during the hiring process.
• Enforcement: The ordinance does not create a private right of action; instead, enforcement and all causes of action will be handled by the City of Spokane municipal court.
Key Employer Takeaways from Spokane’s ‘Ban the Address’ Ordinance
Employers hiring for positions physically located in Spokane, including remote or hybrid roles tied to a Spokane worksite, should review and update their hiring practices to ensure compliance with the new ordinance. This includes removing address fields from initial applications and interview guides, reviewing automated applicant-tracking filters, and briefing recruiters on the new constraints.
Source: Lexology- Miller Nash
https://www.millernash.com/industry-news/new-hiring-and-employment-records-laws-take-effect-in-washington
COURT CASES
Pennsylvania Medical Marijuana Card-Holder Survives Employer’s Motion to Dismiss
A recent opinion from the Eastern District of Pennsylvania serves a win to a medical marijuana card-holder who brought claims against an employer under the Americans with Disabilities Act (“ADA”), the Pennsylvania Medical Marijuana Act (“MMA”), and Pennsylvania common law. The decision reflects careful fact pleading by the plaintiff. It also highlights a number of important themes for Pennsylvania employers, including the importance of evaluating job duties and having legitimate reasons for policies prohibiting off-duty marijuana use. In jurisdictions with employment protections for medical marijuana users, the decision also underscores the care employers should take if an employee or applicant discloses that they are a lawful medical marijuana user.
In Tyler v. Penske Truck Leasing Co. L.P., et al., No. 24-5369 (E.D.N.Y. May 21, 2025), the plaintiff, a job applicant for a position as a Sales and Operations Management Trainee, alleged that the defendant-employer said his job offer was conditioned on passage of a drug screening test. After receiving the offer, the plaintiff told the recruiter that he had a Pennsylvania medical marijuana card, prescribed by a licensed medical practitioner to treat an anxiety disorder. The plaintiff alleged that his healthcare provider advised him that use of medical marijuana “outside of work hours while not on duty would not adversely affect his ability to safely operate any motor vehicle.”
According to the plaintiff, the recruiter told him that the employer “doesn’t like medical marijuana cards.” The complaint asserted that the employer subsequently informed the plaintiff that he would not be hired for the role because the employer “can’t accommodate [his] medical marijuana card.”
To try and salvage his job offer, the plaintiff alleged that he told the recruiter that “he was willing to refrain from any marijuana use and find alternate treatments.” The employer, however, did not reconsider its recission of the job offer, according to the complaint.
The plaintiff then sued the employer in federal court claiming discrimination, retaliation, and failure to accommodate under the ADA, as well as violations under the MMA and the Pennsylvania common law of wrongful discharge. The employer moved to dismiss all causes of action and claimed that the plaintiff failed a drug screening test. The court denied the employer’s motion.
The Decision
As is often the case, a major factor in the court’s denial of the motion to dismiss stemmed from the motion’s procedural posture and the factual allegations in the complaint, which a court must generally accept as true when evaluating a motion to dismiss. As a result, the court had to accept, among other allegations, the plaintiff’s claims that (a) he did not use marijuana at the time the employer rescinded his offer of employment, and (b) the position at issue did not require the operation of any motor vehicle. The job description and offer letter for the position mentioned that driving duties were part of the position, and both also referred to the employer’s business being subject to strict federal regulations by the Department of Transportation (“DOT”). Among those regulations is that a driver of a commercial motor vehicle not use any Schedule I drugs under the Controlled Substances Act, which includes marijuana.
However, the plaintiff alleged that the role’s “Position Summary” and “Major Responsibilities” sections did not mention anything about driving. The plaintiff also alleged that during his recruitment process, he was “never once informed” that he would need to drive and stated that he “was informed during his orientation process that he would never have to operate any vehicles on any public roadway for his inside sales position.”
The court denied the motion to dismiss. Regarding the ADA disability discrimination claim, the court found it logical to infer that (a) the plaintiff did not use marijuana at the time the employer rescinded its offer, (b) the DOT regulation did not apply to the position sought, and (c) the purported driving responsibilities for the position were pretextual, meaning false and a means of discriminating against the plaintiff based on his disability.
Regarding the ADA failure to accommodate claim, the court observed that, per the complaint, the plaintiff had offered to forego marijuana use, yet the employer failed to engage in an interactive discussion regarding accommodations for the plaintiff’s disability and doubled down on its refusal to hire him. The employer argued simply that it was legally barred from hiring a drug user. But, as the court already reasoned, the complaint alleged plausibly that the plaintiff was not a drug user, the DOT regulations did not apply, and the alleged driving requirement was a pretext.
Further, because the driving requirements for Tyler’s role were viewed as plausibly pretextual and the DOT regulations inapplicable, the court denied the employer’s motion to dismiss the plaintiff’s MMA and common law wrongful termination claims. Having found that the plaintiff alleged plausibly that the driving requirement was pretextual and that the DOT regulations did not apply, the court rejected the employer’s arguments that federal law preempted the Pennsylvania MMA and wrongful termination claims.
What the Decision Means for Employers
The decision offers lessons for employers in states where the law provides employment protections to medical marijuana users. In particular, it is a helpful reminder that the interactive process is important. Leaping straight from learning that an individual is a lawful medical marijuana user in a jurisdiction with employment protections can be risky. Understanding why the individual uses marijuana, when, and under what conditions might have a material impact on the accommodation or adverse action decision.
Likewise, the decision serves as a reminder that employers in jurisdictions with employment protections for medical marijuana users should carefully craft their policies prohibiting marijuana usage, which may need to be rooted in genuine, verifiable, and consistent reasoning related to the actual tasks expected of the employee, not to mention applicable federal, state, and local law on the subject of marijuana use. In this case, the candidate was able to craft a complaint that survived a motion to dismiss by alleging, in part, that he did not use marijuana at the relevant time, that any use was off-duty, and that the position he sought did not require commercial driving, thereby bringing the position out from under the DOT’s strict drug and alcohol testing regulations, which does not permit medical marijuana users to perform DOT-covered safety sensitive duties.
Source: Lexology- Seyfarth Shaw LLP- Jennifer L. Mora, Anthony S. Califano and Elliot R. Fink
https://www.lexology.com/library/detail.aspx?g=5a63c17f-8738-47e1-b377-3beed9ba6392&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=ACC+Newsstand+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2025-06-10&utm_term=
The Ever-Changing Legal Landscape of State and Federal Regulations for Using AI in Candidate Recruiting and Screening
According to a University of Southern California study, 55% of businesses are investing in automated recruiting measures that use artificial intelligence (AI). Using AI tools in employee recruiting and screening offers a range of potential benefits to employers, including increasing the efficiency and speed when it comes to finding the most qualified candidates, reducing the workload for HR teams, and lowering operational costs. However, while using AI in hiring decisions can reduce candidate screening times and increase efficiency, many observers have raised concerns that it can introduce bias and reduce transparency in the hiring process.
Numerous individuals have already filed lawsuits alleging they were summarily denied consideration for positions as a result of AI screening tools that discriminate on the basis of race, gender, age, or disability. Additionally, many states have introduced legislation establishing various requirements for employers using AI for employment-related decisions.
Recent Litigation
In Mobley v. Workday, Inc., the plaintiff filed a putative class action in a California federal court against Workday, a software company that provides algorithm-based applicant-screening tools to thousands of companies, including several Fortune 500 firms. The plaintiff alleged he was denied 80 to 100 jobs by several companies using Workday’s algorithm because of inherent bias embedded in the algorithm.
The court denied Workday’s motion to dismiss, finding that the amended complaint adequately alleged that Workday was an agent of its client-employers and thus fell within the definition of an “employer” under Title VII, the Age Discrimination in Employment Act, and the Americans with Disabilities Act. The case is still pending and is in the discovery stage.
Employers using AI screening tools should be familiar with the processes and methods the tools use to screen candidates and be ready to articulate clearly the role these tools play in hiring decisions and demonstrate that use of the tools does not result in disparate impacts on protected groups.
Recent Legislation
Although neither the court in Mobley nor other courts have yet decided whether a company’s use of AI screening tools violated federal or state antidiscrimination laws, numerous states have introduced legislation establishing various requirements for employers using AI for employment-related decisions.
For example, the Colorado Artificial Intelligence Act (CAIA), which will take effect on February 1, 2026, requires developers and implementers of certain “high-risk AI” systems to disclose to consumers that they are interacting with an AI system and protect Colorado residents from any risks of algorithmic discrimination, including in employment-related decisions. The CAIA is broad in scope and applies to any employer utilizing a high-risk AI system to make essentially any employment-related decision affecting a Colorado resident, regardless of whether the employer has a physical presence in the state. Similarly, in Illinois, effective January 1, 2026, amendments to the Illinois Human Rights Act will prohibit employers from using AI that subjects employees to discrimination on the basis of a protected class.
Last week, House Republicans proposed an amendment to their proposed signature budget bill, titled One Big Beautiful Bill Act, which would impose a temporary ban on state and local regulation of AI, with the stated goal of establishing uniform federal oversight. However, this proposal has faced bipartisan criticism and is unlikely to survive under the Senate’s procedural rules.
Recommendations
Employers using or planning to use AI tools in their hiring process should stay informed about state-specific AI regulations affecting employment practices and take measures to reduce the possibility of litigation.
Source: Lexology- Steptoe & Johnson PLLC- Rodney L Bean and Jordan P. Dye
https://www.steptoe-johnson.com/news/the-ever-changing-legal-landscape-of-state-and-federal-regulations-for-using-ai-in-candidate-recruiting-and-screening/
MISCELLEANOUS DEVELOPMENTS
Nebraska Bans Minor Social Media Accounts Without Parental Consent
On May 20, 2025, Nebraska Governor Pillen approved LB 383, which imposes a broad range of restrictions on minors’ access online. In addition to a ban on artificial intelligence-generated child pornography, the law also requires parental controls over minor social media accounts. Nebraska joins at least two other states that have passed bans on social media for minors without parental consent this year.
Of note, a section of LB 383 called the Parental Rights in Social Media Act (the “Act”) outlines parental rights over their children’s social media accounts. Key provisions and definitions are below. The following provisions of the Act become effective on July 1, 2026.
• “Social Media Platform”: The term is broadly defined as “a website or Internet application that allows a person to create an account and enables an account holder to communicate with other account holders and users through posts.” “Posts” is not defined, but the definition notably excludes online platforms like email services or online shopping websites and services that consist primarily of preselected content where interactive functionality is incidental to such content.
• “Minor”: A minor is defined as a Nebraska resident “who is known or reasonably believed by a social media platform to be under eighteen years of age” and is not emancipated.
• Age Verification for Minors: Minors may not be account holders on a social media platform unless there is age verification, and their parent provides express consent. The statute requires a “reasonable age verification method” which is defined as the “presentation of a digitized identification card or any commercially reasonable age verification method to confirm an individual’s age.” A social media platform may utilize third-party vendors as part of this process. Social media companies are also prohibited from retaining age verification information after that process is complete.
• Parental Controls: Social media companies must develop a method for a parent to revoke consent. Social media companies must also provide parents with methods to supervise minor accounts including: (i) viewing posts made by the minor; (ii) viewing responses or messages sent to or from the minor; (iii) controlling the minor’s privacy and account settings; and (iv) monitoring or limiting the amount of time that the minor spends on the platform.
• Enforcement: The Act allows (i) any individual whose information is retained after age verification was completed and (ii) minors or parents of minors for any violation of the Act to obtain relief from the social media company or third-party vendors, including actual damages. The Nebraska Attorney General may also enforce the Act with penalties of up to $2,500 per violation.
Source: Lexology: Covington & Burling- Lindsey L. Tonsager, Jenna Zhang, Natalis Maas and Divya Bhat
