Yeah, my business law professor told the entire class to just never give references period. There is no gain, and everything to lose.

Even saying positive things like 'Employee X was fantastic; she was really good at Y' can be grounds for libel. The employee will claim standing based on the fact that, by saying she was good at 'Y' and not 'Z' (which is what the employer really wanted), it was libel by omission.

This is a good point about reference checks in general.