Frustrating read. It wasn't in the form, she asked me over the phone after I passed the final interviewing step and they were going to extend an official offer. Good tip though, I've done that before and it's worked well.

I was at a disadvantage in that a) I didn't have any other job offers for a comparable company and wasn't likely to get them anytime soon (see: state university degree, just 1 year experience) and b) wasn't really willing to walk. My company at the time couldn't compete with Google. There was no better offer for me out there, career making opportunity, etc. So when I got told to take it or walk I took it.

Think about this. You've just gone through a lengthy and highly selective interviewing process. You've succeeded where many others have failed. The company has invested a lot of its employees' valuable time in interviewing you. They've decided you are a good fit and are skilled enough for the role. There are no red flags (like a criminal history, ineligability to work in the country, etc) that would prevent them from hiring you. Then they ask how much you made at your previous company and you refuse to tell them.

Do you really think that after all that time and effort, after sifting through a mountain of undequalified candiates, they would now turn around and let a qualified, well-fitting candidate slip through their fingers over a bit of irrelevant trivia? Not on your life.

Demanding you tell them your previous salary or they'd cancel your application was a bluff, pure and simple. Same with them pretending that you were in no position to negotiate once they'd chosen you and make you an offer. Companies always start low and expect to be negotiated up, at least a little. And once they choose you and made you an offer, the power is in your hands. "Take it or leave it" is a bluff.