Has anyone ever heard that a company cannot contact your previous employer and ask them anything except your hire and release dates? It used to be the law protected your privacy and filling out an application was just... Well... Filling out an application to work somewhere. But now the very law that's there to protect you is jeopardized by the tricky maneuvering of all the companies you could apply for.
This law was in place among other things to assure a company who fired you without real reason couldn't hinder your ability to get hired somewhere else. I can understand a company wanting to know your history details but the reality of it is a lot of companies fire people for bad reasons and attach a stigma to their public image with the flick of their wrist and a pen. Giving companies the ability to supersede this law gives those unscrupulous companies too much power.