There's always a misconception around this. I don't know where it got started, but it always comes up whenever anyone is discussing applying to new jobs.

Yes, an employer can simply say "Yes, so-and-so worked here from X to Y dates." They can also say "Yes, Larry worked here from X until they were terminated on Y date." They cannot say "Yes, Larry worked here until they abandoned their job unexpectedly while they were in in-patient rehab for a pretty gnarly drug addiction. Crazy cycle of uppers and downers, so whenever he did show up to work, we didn't know which Larry we were gonna get: Bouncy Larry or Sleepy Larry. Nice guy, but yeah, he got caught up in some crazy shit. I wish he could've had that much fun doing his TPS reports, but we all have our strengths and weaknesses, I guess."

So yeah, a former employer can say you worked there. They can give dates. They can say you no longer work there, and give dates. They can say whether you were terminated (I think why depends on whether there are legal issues pending, HIPPA issues at hand, or other similar restrictions) or whether you quit (and again, depending on the reason, why). They can say you were a good employee, called in sick every Monday morning, or couldn't get along with your coworkers.

Most don't engage because if that gets out it just looks petty for the company (especially so if the reason for separation was fairly benign and not criminal in nature). Just to keep their hands clean, HR departments just confirm employment and choose not to get into details. Good or bad, they let other companies take a gamble on you.

Even leaving out being petty, there are 4 possibilities:

1. You were a good employee and you're going to a competitor
2. You were a good employee and you're moving to a different industry
3. You were a bad employee and you're going to a competitor
4. You were a bad employee and you're moving to a different industry

For options 2 and 4, the old employer doesn't give a shit. You can be a great employee or suck ass for someone else and it won't affect them in the slightest. You're not going to a competitor and can't help or harm the industry or their competition.

For option 3, they're better off as a company if their shitty has-beens move on to competitors and harm the competition. Right?

That leaves option 1 - a 25% chance that you're going to another company that could negatively affect your former employer's bottom line. And in that case, you'd think they'd want to pretend you were the best employee ever and it's such a shame that you couldn't afford to keep them since they were a critical part of the company's success.

So just as a numbers game, it doesn't make sense to trash your reputation. Laws exist to protect Joe Employee, but even if they didn't, it's usually not a great decision for an HR department to want to trash their former employees.