Yes, an employer can use his or her discretion in hiring employees with regard to convicted felons.  It could depend on their compliance with the laws that govern their business.  It could do with their insurance coverage.  It could do with their just not wanting to hire you.  But it is a rare case that makes it discriminatory and therefore against the law to reject your application here.  I know that it is a tough thing to deal with and it may only be the first of many times.  Try and see if there is any job counseling service that can help you.  Many employers do not care about hiring felons and believe in starting fresh.  Good luck.