It is true that you’re better off looking for a job when you are gainfully employed. Employers that are hiring look at people that are employed, happy, and successful as better candidates than people that are unemployed or “miserably employed”. This is fact, even though there are times when unemployment happens to A players for good reasons. So if you are unemployed for good reason, how do you handle it in an interview?
I always tell people in this situation this. Take this approach: “Mr. Employer, my life is an open book. Feel free to talk to my most recent manager at XYZ Company. Feel free to talk to my co-workers about me to satisfy yourself. Unlike the candidates you are talking to that are employed and at the same company for several years that tell you that you cannot contact anyone at their current job, I have nothing to hide and I invite you to call and check me out. You have no idea about the person you are interviewing that says ‘you cannot talk to my current employer because I’m working there’. In my case, my life is an open book so check me out, and here are my references.”
By taking this proactive approach with your interviewer, you nip it in the bud and take that concern off the table right away and focus on telling the potential employer about your accomplishments and what you can do for them!