Asking on behalf of my client (I'm an academic editor). Person is up for tenure next year at a small college. Wants to apply for a job at a better school with a higher salary. What is the protocol/things to be aware of when asking for letters of reference when she has not told anyone in her department that she is thinking of leaving? This is not a case of being engaged in an intensive job hunt; rather, she came across an intriguing position. What are the possible repercussions if it becomes known that she's looking for a job one year before tenure? Tenure is likely because her achievements exceed the standards of her current position.
First a bit of a warning. In many fields, the faculty from different colleges are likely to know and interact with one another at conferences and such. So it would be fairly normal, for a person writing a reference to correspond with another faculty member at your client's college. I assume she wants to avoid that situation, though it may be less important than she thinks.
However, since your client is asking for letters from people known to her and who, in turn know her, it is also fine to include a note giving her current situation and wishes for confidentiality. Not prejudicing a future tenure decision would be a good enough reason, I think.
However, the college(s) to which the recommendations are sent, might also, informally, seek additional information. This may be improper in some places, but it also likely happens. Thus, you can get no absolute guarantee that the current employer won't learn of what is happening. It seems a little harder for me to consider asking the new institution to keep it confidential.
But, while I doubt that there would be a problem in any case, it would be good to have a backup explanation for "looking at another position while being perfectly content" in the current one, not to put words in her mouth.