Interviewing with another company

probably

have you discussed confidentiality with the company you are interviewing with?

They are probably asking questions of your references. Also they may be subtly asking questions about you to some other people you have worked with and possibly clients. Companies try to be clever and confidential in the way they ask around, but some individuals are better than others at being discreet.

Another x-factor, as was rumored to have been done at my old company (I did not confirm) is that if your company is big enough they may have a planted recruiter occasionally calling you or your coworkers just to get a feel for who is looking around.

They probably would, but couldn't you just deny that it ever happened? The only proof would have to come from the competitor, but what motivation would they have to provide it?

You could just say you we're approached by a headhunter (unsolicited) and they are probably vetting you.

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If my current company finds out I interviewed for a direct competitor do you think they would fire me?

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Not in my field.

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And if his proposed employer finds out he lies to his employers, then what?

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OK, so he doesn't deny it. Instead, he can avoid the question.

Boss: "I heard from a client that he heard that you interviewed at X Corp. What's going on?"

Dallastiger: Well, someone at X Corp asked me questions with respect to an open position. Maybe they are poking around?

Boss: Are you interested in this position?

Dallastiger: (laughs) well, I don't have an offer from them so there's nothing to be interested in. By the way, can I talk to you about that project you assigned to me last week?

The two walk off to get coffee. No lies we're told. Same result.

Yeah, "deny" was a poor choice of words. I just don't see any need for him to build his own noose.

I don't think they would fire you. It might create mistrust. I know my company and several competitors work with the same headhunters and get feedback when an employee talks with a competitor, through the headhunter.

Fortunately in my field, the demand for work is high, and if you feel undervalued at your current company, you can work it into a raise, bonus, etc... with the threat of leaving. Or you can just get up and go work for someone else. Definitely be careful about lying to your current employer because you never know what kind of discussions are occurring on the other side.

As one poster said earlier, you could be talking to someone hired by your own company?

Good luck!