I have actually worked for a couple of companies where employees were not allowed to be used as references. They could verify that the interviewee worked there and what the salary was (if that was known) other than that nothing.
They were US based (ultimately) and were sued too many times for both good and bad references. If they gave a bad reference the interviewee would sue for preventing them from getting a job. If the company gave a good reference and the person acted like a dillweed, the new employer would sue the old one...
None of the places that have hired me over the last 10 years ever asked for references.
"Hey, I'm a firm believer in the philosophy of a ruling class. Especially since I rule."