in almost every state the prospective employer does NOT need your permission....
in the few states that do require permission;
if you list the former employer on your application or resume you have in fact and by law given your permission for them to be contacted....
if you check do not contact;
the prospective employer can still contact them, that does not mean they will many employers will honor your request but they are going to wonder why you checked that....
a former employer must be honest if they give a reference, many companies do NOT allow anyone except those trained in HR to give out references for the very reason you have brought up.... most likely this manager would NOT be the one who is contacted,
if they are they must tell the truth or nothing at all....
as a matter of policy many companies only release dates of employment and job titles
and for your own good don't even go down that road of "i am getting a lawyer";
you sound petty & childish, and it makes it look like you are a trouble maker....
if you have a legitimate complaint,
and have filed it with the EEOC,
and the EEOC has given you a "right-to-sue" letter,
then and only then can you actually sue,
so if you have gotten to that point it is best NOT to discuss it....
http://www.eeoc.gov