While nothing I say here should be read as constituting legal advice, I can tell you that you need evidence that a court would consider that your former employer is either "blackballing you" (defaming you) or otherwise intentionally interfering with your ability to work in similar positions in the same general area. As an attorney, one problem I have with your question is your statement that you were refused unemployment benefits. There is only one basis in Illinois for refusal and that is misconduct. The fact that you say that the issue was a "failure to follow procedure" and was "trumped up" does not give me any information. What could be significant is the offer of "rehire." Was that after they fought unemployment?