There's often an implication that an arrest wasn't necessarily mistaken, even if no charges were filed, the charges were dropped, or the person was acquitted.

I can see it making a sort of sense in some edges cases. Would you hire a bartender who had been arrested six times on suspicion of DUI just because he was never convicted? I think that would be hard to justify, if my insurance company would even allow it. (So, in my opinion, it's better if I never found out!) However, in general I find the idea distasteful, uncharitable, and un-American.

That said, I suspect most employers just like to have as many legal reasons to reject an applicant as possible to make it harder to be sued (irrespective of whether those employers are racists). In Michigan they were more or less explicit that they put their ban in place because black people are being arrested and charged at rates disproportional to eventual convictions versus other groups.