I applied for a job that I worked very hard to get. They call me back and said it's a no-go. The employment application asked to check a box saying whether or not I have ever been arrested. I have been arrested, but it was dismissed and expunged. I checked no, because my privacy is protected under this expungement, and I am not required to disclose any information regarding it.

This is a common misconception that expungement makes all records disappear. Any record that is digitized is probably there forever. And as another reply said, the FBI and any government agency can still access your records if your job application relates to any type of security risk, for example teacher or school janitor (around kids), transportation, police, fireman, military, judiciary, or if you ever go back to court then the judge will see into your "expunged" record and take it into account in your new sentencing. Finally, unless you were a juvenile, your conviction record was public information for a while, before you got a court order to get it expunged. During that public time, a private background search company will get the information during their regular sweeps of court records. Then your information is permanently available for sale to any company running an employment background search. So, now you know that you should reveal that your record was expunged, when you apply for a job so they don't turn you down because you appear to be an untrustworthy liar. Then you can explain it if they ask for more details. If your record was expunged, then it was a first time offense of a nonviolent nature, which you should be able to explain to your employer in a more favorable light than being deemed a liar who is hiding his criminal background.