It isn't privacy act exactly.. It's more of human rights pertaining to discriminatory employment law. Even with a forgiven criminal record, that should never be blatantly laid out as the reason for non candidacy during recruitment.
Then again, that's how it is in canada, I would not know if it is the same in USA however our laws are pretty close.
And if you are dealing with an existing condition or long term ailment janey the employer could worry about accommodating disability also.
My advice is you just would not necessarily need to volunteer such information even when pressed.