By asking them not to contact his current company. This happens all the time.

I really don't understand why there's any drama here at all. As a matter of course, you should have your next opportunity lined up before you inform your employer that you're thinking about leaving.

In fact, in this scenario he can be completely honest and say that that would not be a good idea because, well, he's the main engineer there and they would not be happy about him leaving. I know for me that'd be a very good sign (assuming I believe the guy is being honest).

Often times the prospective company will ask you outright if they can contact your current employer. Companies with a formal application process may prompt you in the documentation they ask you to fill out.

Regardless, there is no harm in saying no. It's the norm for folks that are exploring other opportunities. The only time it may be questionable is if you've already left (or been let go by) your previous employer.