Legal Disclaimer: Validity Screening Solutions provides this material for educational and informational purposes only, and shall not be construed as legal advice, express or implied. For questions regarding your organization’s practices and compliance with applicable laws, please consult with your legal counsel.
Fair Chance & Clean Slate
Texas Proposed Ban the Box Law
In March 2025, House Bill 2466, also known as a “Ban the Box” law, was referred to the House Workforce Subcommittee. Under this legislation, employers would be prohibited from requesting information about criminal history on initial job applications. Employers would be permitted to inquire about criminal history only after determining that the candidate is “otherwise qualified” and extending a conditional offer of employment. If enacted, House Bill 2466 would apply to private employers with 15 or more employees, as well as public employers.
Learn more about the proposed law here.
Minneapolis’ Amended Anti-Discrimination Ordinance, Effective August 1
The City of Minneapolis, Minnesota, amended its anti-discrimination ordinance on May 12, 2025, with the amendments taking effect on August 1, 2025. The amendments expand the scope of protected characteristics and workplace accommodations. In addition to the existing protected characteristics, the amendments now prohibit discrimination in employment based on justice-impacted status, housing status, height and weight, or any combination of protected characteristics outlined in the ordinance.
Furthermore, the amendments require employers to provide reasonable accommodations for “known pregnancy-related limitations.” Employers are also mandated to provide religious accommodations unless it can be demonstrated that such accommodations would impose an undue hardship.
With the amendments having recently become effective, it is recommended Minnesota employers to review and update their policies and practices related to anti-discrimination and workplace accommodations.
Learn more about the amendments here.
Navigating Automated Criminal Record Sealing and Expungement
As of today, only 12 states have enacted Clean Slate laws. For context, approximately one in three adults in the United States have a criminal record. To support reducing recidivism and addressing barriers to employment, housing, education, and other opportunities, legislation such as Clean Slate laws and Fair Chance ordinances are increasingly being adopted to advance these initiatives.
Learn more about Clean Slate initiatives here.
California Civil Rights Department Recent Settlement
In April 2025, the California Civil Rights Department (CRD) reached a $100,000 settlement with an Iowa-based trucking company. The job applicant alleged that they were unlawfully rejected for a position based on their criminal history. Additionally, the complaint claimed that the company rescinded the job offer without conducting an individualized assessment.
The CRD launched an investigation resulting in the settlement. In addition to the monetary settlement, the company is required to provide training on the state’s Fair Chance Act to all staff involved in the hiring process. The company must also review and update its policies to ensure compliance with the Fair Chance Act and report any policy changes to the CRD within 45 days.
Learn more about the settlement here.
Washington’s Senate Bill 5501 Restricts Driver’s License Requirements For Employment
On April 22, 2025, Washington’s Senate Bill 5501 was enacted into law. This legislation prohibits employers from mandating a valid driver’s license as a condition of employment, unless driving is an essential job function. The law took effect on July 27, 2025. It is recommended Washington employers review their job postings and application materials to ensure compliance with the new requirements.
Learn more about the new law here.
Drug Testing
Minnesota District Court Drug Testing Law Ruling
The U.S. District Court for the District of Minnesota ruled in favor of Minnesota Energy Resources Corporation (MERC) in a lawsuit filed by a former employee who did not pass a random drug test. The plaintiff claimed that MERC violated Minnesota’s Drug and Alcohol Testing in the Workplace Act (DATWA) by requiring him to undergo a random drug test, failing to provide the necessary notices, disclosing the positive result to a federal agency without a confirmatory retest, and not offering drug counseling or rehabilitation services. The court concluded that federal Department of Transportation (DOT) regulations preempt DATWA. It further determined that compliance with both DATWA and federal regulations would be impossible or would hinder the execution of federal drug testing procedures.
Learn more about the ruling here.
Artificial Intelligence (AI) & Data Privacy
California Civil Rights Council’s Proposed AI Regulations Take Effect October 1
The California Civil Rights Council issued the “Proposed Employment Regulations Regarding Automated-Decision Systems” in March 2025. The regulations received approval on June 27, 2025, and are scheduled to take effect on October 1, 2025. The regulation will establish that algorithmic bias in employment practices is unlawful in California. Ahead of the October effective date, it is advisable for employers with employees in California to review and update their policies and cybersecurity protocols to ensure compliance with the new legislation.
Learn more about the regulations here.
Governor Greg Abbott Signs The Texas Responsible Artificial Intelligence Governance Act
On June 22, 2025, Texas joined the growing number of states with AI regulation laws. The Texas Responsible Artificial Intelligence Governance Act (“TRAIGA 2.0“) establishes a framework aimed at promoting government transparency, protecting consumer rights, ensuring the responsible use of AI systems, and implementing procedural safeguards to support innovation in the AI sector. TRAIGA 2.0 is anticipated to take effect on January 1, 2026.
Learn more about the new law here.
The Legal Landscape of AI-Use In Employment Recruiting And Background Screening
While utilizing AI tools in employment recruiting and screening can enhance efficiency and reduce workload, there are legal considerations to be mindful of if these tools are not implemented appropriately. Recent developments have seen an increase in lawsuits concerning discrimination linked to AI screening methods. Consequently, several states have introduced legislation addressing the use of AI in hiring and employment-related decisions. Given the rise in both litigation and regulatory initiatives, it is recommended employers stay informed about emerging state-specific AI regulations when incorporating these tools into their hiring and employment practices.
Learn more here.
Federal Updates
CFPB Withdraws 67 Guidance Documents
On May 9, 2025, the Consumer Financial Protection Bureau announced the withdrawal of 67 guidance documents. Included among these were several interpretative rules, advisory opinions, and a circular related to the Fair Credit Reporting Act (FCRA). The CFPB indicated that they will conduct an additional review to determine which guidance documents will continue to be withdrawn. In the meantime, the CFPB advised that the withdrawn guidance should not be relied upon or enforced while this review is ongoing.
Learn more about the CFPB’s announcement here.
EEOC Drops Lawsuit Against Gas Station Chain
In April 2024, the Equal Employment Opportunity Commission (EEOC) filed a class-action lawsuit against gas station chain Sheetz. The lawsuit alleged that Sheetz’s background screening practices violated Title VII of the Civil Rights Act of 1964 because it allegedly had a disparate impact on job applicants of certain racial backgrounds. On April 23, 2025, President Donald Trump issued an executive order directing agencies such as the EEOC to cease enforcement of disparate impact claims.
As a result, the EEOC moved to have the case dismissed, determining that the disparate-impact claims would conflict with the executive order. The EEOC requested a 60-day deferral of the dismissal to allow the agency to notify class members and allow them to seek and obtain private legal representation.
Learn more about the lawsuit here.
