I was injured on the job. I was later discharged for my position which they stated I was making to many mistakes. I however was (with out my knowledge) training my replacement. I have applied for over 350 jobs and had very very good interviews but have never been offered the job. I come to find out they are giving me a bad reference. Isn't this against the law? If they don't give me a bad reference they are telling them that they are not allowed to give any information out on me.

Of course it is not against the law, that is what reference checks are for, they ask the company why you were dismissed, if you were fired or if you quit, and if they would rehire, and if you were fired they would also ask why.

You sign a release on the application you fill out for all of those 350 places, that say you give them permission to check these references.
And it gives the other place permission to tell them.

* read the fine print on the spot right above where you sign the application.

Also there is a clearning bank on medical information that would show them the details on the workers comp accident. Many firms will not want to hire someone that has a record of workers comp injuries.

So of course they are going to ask a reference from a company you list, and that company will tell them what type of worker you were and things they ask.

It is not illegal to tell the truth. It is illegal to lie. If they are answering questions like Chuck suggested or even just reading the facts from your file, then they are not doing anything illegal.