eh, i think that's pretty much common knowledge. that's why most people get rid of any partying pics and such around the end of college. yes, they can find your profile if you're set to private, but they can't really see much of anything on it without your password, or at least befriending you. i suppose the firms you mention probably get pretty thorough and can therefore find things you've posted on less private friends' walls, but i can't imagine that they hack your profile.
They don't need to hack your profile. They instead go through all of your contacts profiles. It is surprising how much information can be found just by doing that.
I would not sign a contract like that. Nor would I take a job that makes you take a piss test even though I would pass one and don't do drugs except for the ones my doctor prescribes. I think to many businesses try to violate people's personal privacy.
so are they looking for things about you on your contacts' profiles, or just trying to find out what kind of people you associate with?
Both actually. I hire headhunters to screen for positions that I need to fill. They then provide me with a selection of candidates with full checks already done and I start to interview and do a selection process. It is often rather amazing what is included as background and while in most cases it has little or no bearing, sometimes it does. The data can range from affiliations, to views expressed to lifestyles. I fill positions that are also international contracts and those often require special consideration on behaviours of candidates. I am not going to hire a drinker to send to a dry country, a gambler where it is prohibited, a reefer where it means incarceration, and at times their views can not be a fit for where they would be sent. It does not represent the company well to have legal issues when we do repeat business in those same places. It also does not do any favour to an employee to be tangled in a legal system that is not similar to our own and often not answerable.
They cannot search your friends' timelines if you make your friends' list private as well. It is possible to make absolutely everything on one's timeline private.