How about career advice?

You’re right but in an interview I could ruin my previous employers credibility by pointing out how unprofessional (& unethical) they are.
Just by using the example they are doing something illegal by discussing ex-employees (but I wouldn’t say it was me) it’s obvious how bad it is there.
Which is also the reason I don’t want to be there anymore.

It’s a fine line though and can be difficult for an engineer to pull off.

I have also interviewed engineering candidates while at Chrysler. And was also in a similar position as the original poster. By “taking the high road”, being honest and accurate with a clear and consistent story it is not insurmountable.

IF... BIG “IF”... if I had to describe how bad it was the examples given in the original post are a good start. And I wouldn’t be afraid to mention my supervisor might be having personal issues which effected his work. The idea being I HAD to leave.

I really feel for the original poster.
No doubt.

I'm thinking the prospective employer should realize the former company's reference is not credible without the candidate having to point it out. It seems obvious there are personal issues between workers at the old company and the candidate. If condemning has to happen, then I wouldn't say much more than a short sentence and keep it general. Yes, 'tell the truth'^ is the best advice possible, but discussing details (hearsay) seems like a losing proposition and a way to break a person down. Dwells on the negative too. You don't want an interview to be centered around your perceived problems.

Still, and well said, taking the high road is not insurmountable. Be careful and calculated, and don't shoot yourself in the foot. :)