Another possibility is that you may have pissed someone "important" off and therefore they give you a bad reference but this is a double sword. Giving someone a bad reference that pisses a boss off is never a good idea because they that means that the boss is stuck with the problem employee. In fact, the boss may give an intentionally glowing reference just to get rid of you.
Lastly, a department may have a valid reason for giving you a bad reference. Maybe you truly are a screw up.
So, we recommend that if you are interested in applying to another department, go ahead and apply but do not make it "common knowledge" by blabbing all over the place where you are applying to or leave background paperwork or applications laying around the department. It is not a secret but, still you don't want to create any animosity between you and your administration when applying elsewhere. It is also a good idea to look at your employee file every so often. Many departments have a mechanism in place for this. Check you department's policies on how to go about this. Lastly, have a friend call the department and ask about your reference and if required have them fax over a letter of release.
There is nothing that says you can't have someone check on your reference by calling the dept!
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