[jcrawfordor]

Yes, this is a big issue! Part of the reason why e.g. California and other states have introduced "ban the box" legislation to restrict employers asking about criminal history, when they already have an expungement process, is because of this issue exactly. Most pre-employment background checks are done through vendors like LexisNexis that pull records at the time of the incident and then retain them permanently, so expungement doesn't do anything. The whole private background check and criminal records industry can be surprisingly sketchy, including behavior that looks to reasonable people like extortion, but it's resisted almost any regulation or oversight. Some of this comes from an inherent tension between public records and personal privacy (are the actions of law enforcement a matter of public interest or a matter of personal privacy? the line can be very blurry), but a lot of it is also just because this industry is politically and financially powerful and any action against it tends to look "soft on crime."