Well, depending on what you mean by that, it isn't necessarily true. If you mean "References can say whatever they want without any potential legal ramificatio

Well, depending on what you mean by that, it isn't necessarily true. If you mean "References can say whatever they want without any potential legal ramifications", that's not true. If you say anything that is demonstrably false about the former employee, you can be sued under defamation laws (and, yes, you can lose). Of course what it was that you actually said (and the potential harm done to the former employee) makes a huge difference as to their chances of winning such a lawsuit. This is one of the reasons many employers have the policy of only confirming that a former employee has in fact worked for the company in the past. Usually it is because their legal team (or for smaller companies, just the lawyer they use) have advised them not to give out anything further.