What's illegal is discriminating against a candidate based on protected information. Knowing that information isn't illegal, but it opens you up to a discrimina

What's illegal is discriminating against a candidate based on protected information. Knowing that information isn't illegal, but it opens you up to a discrimination lawsuit, because it's very difficult to prove that your decision wasn't motivated by that information. This is why background checks are usually done by third parties. A background check will inevitably find out information that you're not supposed to discriminate upon - having it done by a third party means that the people actually making the decision don't know that information. (And more important, you can prove that they didn't know it)