The Consequences of the Texas Death Star Bill

Compliance with the legislation governing background checks and fair hiring is challenging for every business. Large or small, everyone must take care to use procedures that abide by the law—even when that means navigating a complex landscape. Compliance concerns have multiplied with the rise of “ban the box” and “Fair Chance” laws aimed at expanding job opportunities. For employers in one state, those concerns recently became much more complicated with the passing of the so-called Texas “Death Star” bill.

Referred to as HB 2127 during its progress through the state legislature, the law implements sweeping changes to how local governments function throughout Texas. Termed “local preemption” law, critics and fairness advocates nicknamed the bill the “Death Star” after the massive space laser from Star Wars. The name stuck, as the law’s opponents believed it was a targeted strike against local autonomy. What does the law do, and how will it impact employers?

What is preemption, and how does it work?

In matters of law, “preemption” refers to a process where laws at one level of government take priority over those created at another level. In Texas, state legislators say local communities have had too much leeway in shaping their regulations. The result, per the text of the law itself, is a “patchwork of regulations” that leads to inconsistencies.

The state now preempts local regulations that go beyond the same state law to correct this perceived problem. The law annexes such regulations in many areas, including agriculture, business and commerce, insurance, labor, and local government ordinances or codes. The law renders all such regulations null, void, and unenforceable.

The bill received approval from Texas Governor Abbott, effective September 1, 2023. Just before that date, though, a Texas court had something to say. So did several major cities, including Houston, which sued the state for passing a law that city officials described as an “unwarranted power grab.”

Courts say “wait,” but to no avail

On August 30, a district court judge ruled that the law was unconstitutional. The judge ruled from Travis County, home to the city of Austin—notable as one of the only cities in the state to have a “ban the box” law. Alongside the ruling, the state also continues to face pending lawsuits. However, Texas immediately appealed the judge’s ruling. Under established state procedures, the appeal creates an immediate “stay” on the judge’s ruling. Thus, the law went into effect on September 1 as originally planned.

What changes now for Texas employers?

The extensive effect of the law concerns its impact on background check compliance and regulation. Texas has no “ban the box” law at the state level. Under the“Death Star” bill, it is now illegal for any city or county within the state to pass or enforce such laws. Only a few jurisdictions, such as the city of Austin, had these laws. Overnight, the extensive procedures created for businesses in Austin became invalid.

It may take years for the lawsuits and various court challenges to the new law to play out and reach a resolution. For employers in Texas areas without additional hiring regulations, very little will change in the employee selection process. For those in Travis County, the Cities of Austin or DeSoto, and other areas in Texas that banned the box, you will need to take a step back and re-evaluate your approach to hiring.

Can affected employers maintain their current programs?

What if you already have a fully-implemented process compliant with the old regulations? For example, Austin required an EEOC-recommended “individualized assessment” of any criminal records associated with job applicants. You could only order a background check after providing a candidate with an initial job offer. These rules were in place for nearly ten years before their preemption.

Do you have to change your approach if you’ve followed these procedures from the outset? Not necessarily. Indeed, you may wish to continue enforcing your existing policies should the courts ultimately overturn the law. The law only governs what regulations cities and counties promulgate; it doesn’t constrain employers from using their own policies. Therefore, nothing necessarily has to change if your procedures continue to work for you.

Strategies for maintaining compliance

New and existing businesses still face another question: could you speed up your selection process by returning to a simpler way of doing things? For example, you could theoretically begin asking about conviction history on job applications again. However, employers should avoid violating federal non-discrimination and equal opportunity laws.

If you reshape your policies, do so with care and thoughtful planning. Consider consulting an employment lawyer familiar with the shifting landscape in Texas. You must avoid introducing a negative bias against those with criminal records. The EEOC already strongly suggests that employers conduct individualized assessments of all candidates to put criminal records into context. Avoiding this step might save time, but it increases the chance of unintentional discrimination and bias.

Making changes necessitates retraining for HR teams and those responsible for hiring. It must be clear to these team members that the automatic rejection of candidates with any records isn’t legal. The individualized approach plays an important role—and so does recording your rationale for any adverse decisions you make. In the event of a lawsuit or discrimination claim, you must be able to show that you treated all candidates the same.

Though the “Death Star” law aims to curtail the power of local lawmakers to create regulations for their communities, it does not tie your hands as an employer. Instead, it restores a level of discretion to employers about how and when they evaluate criminal records. Companies in the areas most directly impacted by the law must decide how to move forward.

Looking to the future of the battle between state vs. local laws

The outcome of the state’s appeal is uncertain. It could take years, multiple decisions, and additional appeals before a final finding on the law’s constitutionality. In the meantime, the law remains in effect as of September 2023. Employers in affected jurisdictions, such as Austin, must think carefully about changing existing procedures.

Will other states emulate the Texas “Death Star” bill to push back against local hiring regulations? That remains to be seen. In some states, such as Florida, preemption of local legislation has remained narrow and targeted to other areas of the law. However, there’s no telling when the law’s passing in Texas might inspire other lawmakers to craft similar legislation. As we advance, employers should not only be compliant—they should also be ready to adapt to change.