I don't know what country you're in so I won't speculate on what's legal or not in your area, but here in the U.S. it's illegal for a prior employer to provide false information to a prospective new employer during a background/reference check. If your former boss tried to blacklist you like that, he'd put his company at risk for a civil suit. And, while it's not illegal to truthfully say that a current or former employee is a bad employee, doing so rides the thin line of opening the company up to a libel lawsuit.

Generally speaking, a company might "dish the dirt" on a former employee if there are criminal charges to back up the claims. Even then, legal and HR will likely frown upon it. Usually, when the new company calls the old company for a reference, the old company will say something like "Yes, $employee worked here from $startDate to $endDate" and refuse to divulge any other information in order to avoid any semblance of libel.

Once again, this is my limited experience in SMB and government settings, I have no experience in mid-to-large businesses, Fortune 500 companies, and Silicon Valley startups. We've all heard stories about managers at such companies going around HR and discussing potential hires at the bar or on the golf course.