Attorney Articles | Ending an Employment Relationship

Articles by Legal Department Staff

The Legal Department articles are not intended to serve as legal advice and are offered for educational purposes only. The information provided should not be used as a substitute for independent legal advice and it is not intended to address every situation that could potentially arise. Please be aware that laws, regulations and technical standards change over time. As a result, it is important to verify and update any reference or information that is provided in the article.

Ending an Employment Relationship

CAMFT attorney Luke Martin, MBA, JD, takes a deep dive into the legal, clinical, and ethical considerations of ending an employment relationship and helps guide both the employer and the employee forward.  Martin places particular focus on how to deal with clients during this transition.

Ending an Employment Relationship

Luke Martin, MBA, JD
Staff Attorney
The Therapist
November/December 2021

The 19th-century American poet Henry Wadsworth Longfellow said it best: “[G]reat is the art of beginning, but greater is the art of ending.” As quickly as a relationship can form, it can just as quickly change. The employer may decide that the employee is not a good fit or is not representing the employer’s interests in the way they would like. The employee may decide that they would like a new experience or that the employer’s values do not align with their own. Or things may happen that neither party can control, and the employment relationship must end. This article will take a deep dive into the legal, clinical, and ethical considerations of ending an employment relationship and finding a greater way forward for all parties.

Understanding the Legal Implications of an Employment Separation
California is considered an at-will employment state. The law specifically states, “[a]n employment, having no specified term, may be terminated at the will of either party on notice to the other.”1 This means that in the absence of an employment contract stating otherwise, an employee can quit or be terminated for any legal reason at any time. This allows an employee to depart an organization and an employer to end their relationship for any reason, or no reason, so long as the termination is not illegal.

Some unlawful justifications for termination of an employee include:

  • firing an employee for taking lawfully required time off,
  • firing an employee in retaliation for reporting a violation of the law, and
  • firing an employee based on discriminatory reasons, such as race, religion, national origin, creed, gender, sexual orientation, and disability.2

This is not an exhaustive list, and employers and employees who have questions related to their employment situation should consult with their human resources department or legal counsel.

Employee Terminated by Employer
It may be no one’s fault, but sometimes things do not work out and the relationship needs to end. Before termination takes place, the employer may want to make a good-faith attempt to resolve the problematic behavior that is leading them towards termination. It may be that the employee is not aware of the employer’s concerns. By shining a light on the areas that need improvement and providing insight into how the employee can increase these skills, the employer may repair the relationship. This all depends on circumstances, and the employer should take any actions that they believe are lawful and appropriate.

Another benefit of providing the employee with notice of willful misconduct or poor performance is that it creates a paper trail, which can support a lawful termination. If applicable, the employer can use these reviews to show that the employee intentionally violated company policies or rules, failed to follow instructions, was excessively absent or tardy, or didn’t meet normal standards of behavior to prove them ineligible for unemployment benefits.3 This is discretionary, and an organization should consult with their human resources department or legal counsel.

The CAMFT Code of Ethics highlights the need for performance appraisals of unlicensed supervisees by stating, “[s]upervisors and educators provide supervisees with periodic performance appraisals and evaluative feedback throughout the supervisory relationship and identify and address the limitations of supervisees and students that might impede their performance.”4 This is paired nicely with Code of Ethics Section 4.10, which addresses performance assistance: “Supervisors and educators guide supervisees and students in securing assistance when needed for the supervisee to maintain or improve performance, such as personal psychotherapy, additional education, training, or consultation.”5

Finally, termination may have a long-term impact on an employee, so employers should consider, when appropriate, allowing the individual to resign voluntarily. Some insurance companies’ paneling applications require the employee to note whether they have been terminated, which may make it difficult for them to become a member of the panel.

Employee Resigning From a Position
When an individual voluntarily separates from an organization, it’s natural that it will have a ripple effect on the employer and those directly impacted by the employee’s contributions. Before terminating the relationship, an individual should consider whether there is any way to salvage the existing employment structure.

An employee may want to discuss their concerns with their supervisor, human resources, or whoever is appropriate within that organization. The employer may be unaware of the employee’s concerns and willing to address them. An employee who wants to depart an organization should take into consideration their own needs, their employer’s needs, and their clients’ needs.

There may be times when the relationship is too far gone, a new opportunity has presented itself, or ethical concerns cannot be overcome. An employee must take care of their mental health in these situations as it is critical for success in life and in this professional space. The CAMFT Code of Ethics highlights this: “Marriage and family therapists seek appropriate professional assistance for their personal problems or conflicts that impair work performance or clinical judgment.”6

While it may seem obvious, an employee should consider any potential impact on their license/registration and/or clients. Quitting an organization may leave clients abandoned or disrupt their treatment. These are not only ethical concerns, they’re also legal concerns.7 A sudden departure may constitute unprofessional conduct, and the Board of Behavioral Sciences (BBS) may deny a license or registration, or suspend or revoke a license or registration, if a licensee or registrant has been found guilty of unprofessional conduct.8 Creating a joint exit strategy with the employer may be the best route for an employee to avoid any allegation of impropriety and maintain a positive relationship with the client.

Considerations for Pre-Licensed Employees
When concluding employment in any setting where the employee is collecting hours licensure, it is best practice to have the required BBS forms prepared for the supervisor to sign at the time notice is given. The employer does not have to accept the notice provided by the employee and can terminate the employee immediately. The employer shall give a trainee or associate at least one week’s written notice of their intent not to sign for any further hours of experience. If they have not provided the notice, the employer shall sign for hours of experience obtained in good faith during which they provided the required supervision.9 Having the forms prepared in advance will help mitigate any surprises.

While the summary of experience forms are signed weekly, the cumulation of those weeks should now be summarized on the “Verification of Experience” form. This form is generally what the BBS reviews, and it should indicate the overall number of hours worked by the pre-licensed employee. If the employee is allowed to continue working during their notice period, this form should be updated.

During this time, the employee should also make sure they have a signed copy of the supervisor’s responsibility statement. The law requires the supervisor to sign the form before beginning supervision. If the pre-licensed employee is unable to locate this form, they must prepare a duplicate to be signed by the supervisor and dated with the current date. To avoid any confusion, the supervisor should include some sort of documentation, such as a handwritten note or a signed letter, stating when the supervision relationship originally began.

Practical Considerations for Departure
The best time to prepare for any change is before it happens. Creating an emergency plan or an actionable game plan before terminating an employee or resigning from an employer is optimal. This provides the best opportunity for either party to protect their interests.

Employee Returning Employer’s Property
A common scenario that needs to be addressed is when an employee has been given company property such as a laptop or a cell phone. The employer will need to request the return of these belongings. It’s important that the former employee not maintain confidential clinical information on any personal property, such as a laptop. If the employee does not return the property requested, the employer may need to take legal action.

If the employee refuses to return the property, the employer cannot make unauthorized deductions from the employee’s wages to offset the loss. The employer can only make deductions that are authorized by the employee in writing or permitted by law.10 Thus, making deductions from an employee’s final payment for the company’s benefit is not allowed. A better option is to have employees sign an acknowledgment that they’ve been entrusted with company property, and then if the employee fails to return it when leaving the organization, the company can file a claim in small claims court to retrieve the value of the unreturned property.

Employee Obtaining Their Personal Property
Upon separation, an employee may need access to their office to remove their personal belongings. The employer should work with the employee, if possible, by providing boxes or other containers so the items can be taken out in one trip. If an employee’s return to the office is not advisable, the employer should make arrangements to have the items picked up later or request an address to which they can be mailed.

California’s labor laws do not specify how long an employer must hold on to personal property abandoned by an employee. Employers should keep in mind that in California, “abandonment requires non-use accompanied by unequivocal and decisive acts showing an intent to abandon.” (U.S. v. Crawford 239 F.3d 1086 (2001)). This means that if multiple good-faith attempts to return the property are unsuccessful, and it is clear that the employee intends not to claim it, the employer may discard the unclaimed property.

Employee’s Final Paycheck
The employer is responsible for paying an employee correctly upon their departure. A discharged California employee must be paid all their wages, including accrued vacation, at the time of termination.11

An employee who gives at least 72 hours prior notice of their intention to quit, and who quits on the day given in the notice, must be paid all wages, including accrued vacation, at the time of quitting.12 An employee who quits without giving 72 hours prior notice must be paid all wages, including accrued vacation, within 72 hours of quitting.13 Missing a deadline may result in penalties or fines, so it’s extremely important that employers comply with these requirements.14

Employers and employees who have questions regarding wages may want to speak with the California Department of Industrial Relations to address any work-related issues.15

Terminating Employee’s Benefits
For some individuals, health insurance is tied to their employment. Depending upon the employer, once the relationship is over the insurance may run out at the end of the month or, in some cases, immediately. Employees should know when their health insurance will stop and make any necessary doctor, vision, and/or dental appointments.

An often-overlooked additional benefit is retirement. If the employer provides retirement benefits, the employee should find out what their post-separation options are. It may be that an employer contribution does not vest all benefits to an employee unless a certain amount of employment time has been met. The employee should review whether their retirement benefit has fully vested, it can be left with the current provider, or it must be rolled over to a new policy.

Employee Referral and Reference
The time that the employee was on staff may or may not be memorable, and if it is, it may be for the wrong reasons. Regardless, that time is now cemented as part of their employment history. Upon departure, an employee should consider how to frame that time with the organization on their resume as well as how the employer may reflect upon the employee’s time there.

When the former employee looks for subsequent work, the new potential employer may ask for a referral or a reference from the previous organization to understand how the employment relationship went. Attempting to leave on good terms may help facilitate a positive referral or reference, which may be beneficial to the departing individual’s future employment.

Departing Employee’s Successor
Finally, unless the business closes, the employee will likely have a successor in the role. It is always best practice for the employee to finalize their work and prepare their successor for success. This includes completing the clinical record and any outstanding notes. The employee must keep the clinical record consistent with sound clinical judgment and must detail the nature of the services rendered, or it can be considered unprofessional conduct.16 If the employee’s relationship with their client abruptly ends, having a complete, detailed treatment plan in place will help the successor understand the client’s treatment goals.

Inappropriate Behavior by Employee and/or Employer Should Be Avoided
If a relationship sours before or during departure, allegations of misconduct by both parties may arise. For example, an employer may believe that the employee is unqualified to provide services with their current skill sets and wants to notify the BBS. An employee may believe that actions taken by the employer are unethical and wants to contact an insurance organization or the BBS. Regardless of rationale or reporting party, the law is clear: There is no reporting obligation for employee or employer unless it involves sexual misconduct or criminal actions.

Often, reporting unethical behavior is the “MAD,” or mutually assured destruction, approach. When one side launches a formal allegation of misconduct, the other party is likely to respond in kind. This often causes unnecessary harm to both sides. It is advisable to consider the consequences of launching the first allegation of misconduct and recognizing the impact the allegations may have on oneself.

Another common scenario that should be avoided is defamation. There are two types, classified by how it’s expressed to third parties. Libel is “a false and unprivileged publication by writing, printing, picture…which exposes any person to hatred, contempt, ridicule, or… has a tendency to injure him [or her] in [their] occupation.”17 The other form of defamation is slander, which is “a false and unprivileged publication, orally uttered…which [t]ends directly to injure him [or her] in respect to his [or her] office, profession, trade or business… that has a natural tendency to lessen its profits.”18 Unfairly denigrating someone is a civil tort, which allows the injured party to recover money for their harms from the offending party.

Beyond the monetary implications, defamatory statements made in front of a client may injure the relationship between the therapist and the client. Depending upon what potentially untrue statements are hurled, the client may feel victimized by the inappropriate behavior or misconduct of the offending party. Defamatory comments place the client in the middle of the dispute when they should be the primary focus of treatment.

Should clients have questions about the departure of their former therapist, it is recommended that the employer craft a respectful and professional response that does not show hostility or negativity. The last thing a client needs to be concerned about after experiencing a shake-up in their regimen is pessimism about their prior treatment.

Taking Into Consideration the Client’s Needs
A treating practitioner should be mindful that the patient will also be experiencing upheaval and may not have ample time to process the transition. The employer and the employee should always keep the client’s best interests in mind. This aligns with CAMFT’s Code of Ethics, which states, “[w]hen terminating employment or contractual relationships, marriage and family therapists primarily consider the best interests of the client/patient when resolving issues of continued responsibility for client/patient care.”19

When possible, a termination plan that addresses how the client’s treatment will come to an end should be crafted jointly by employer and employee. This termination plan should highlight common questions the client may have about the employer/employee separation and should include appropriate referrals.

Some examples of appropriate referrals include:

  • the current employer’s agency or practice,
  • the departing employee’s new agency or practice, and
  • one to three outside or non-affiliated therapists or organizations.

This may be challenging when the employer and the employee do not hold the same view of how the client’s termination should be handled. However, both parties have an ethical responsibility to provide an appropriate termination and transition of care since they are obligated to prioritize the client’s best interests.

Client’s Continued Relationship with Departing Employee
Clients are not “owned” or are “property,” so the client ultimately gets to decide with whom they engage in therapy. While the client may want to continue with their departing clinician, it may not be practical.

A licensed departing employee may be able to transition current clients to a new setting, but they must consider whether this is realistic and clinically appropriate for the clients. The therapist must evaluate whether the new work setting is a good match for the client’s needs and has the resources necessary for the client’s success in treatment.

An employer may attempt to restrict a licensed employee from transitioning clients to their new practice by placing a provision in their employment contract that expressly forbids it. These “non-competition clauses” are generally not enforceable in California, with a limited exception for selling ownership.20 The California Business and Professions Code states, “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” It may be advisable for the employee to speak with an attorney in this situation. A more in-depth review of these topics can be found in “Thoughtful Transitions,” written by staff attorney Michael Griffin for the November/December 2017 issue of The Therapist.

A pre-licensed individual is not able to provide clinical services without proper supervision.21 Even if the pre-licensed individual is being properly supervised, the determination as to if the client may be seen at their new practice rests with the supervisor and not the unlicensed supervisee. A prelicensed supervisee should have a meaningful conversation with their new supervisor before offering this as a solution for the client’s continued needs.

In either situation (pre-licensed or licensed), the departing employee should coordinate care with the practice they are departing.

Client’s Continued Relationship with Employer
Commonly, a client will want to continue the relationship they have established with the practice or agency and will seek a replacement therapist within that same organization. The practice or agency may permit this if they have the resources to accommodate the request. This aligns with CAMFT’s Code of Ethics, which states, “[m]arriage and family therapists are aware of their professional and clinical responsibilities to provide consistent care to clients/patients and to maintain practices and procedures that are intended to provide undisrupted care.”22 Depending on how the employee departs, the employer may need to take a more active role to avoid potential ethical concerns related to abandoning or neglecting a client’s treatment.23 There may be greater urgency with more serious clients, while other clients may be able to wait until an opening is available.

Severing the Relationship Completely
There is never a great time for an employment relationship to end, but there may be particularly bad times. The employer and the employee must consider the mental states of the clients in that moment. Severing a relationship with a client who is “in crisis” or “at-risk” may not be recommended. The departing employee and the employer must use “sound clinical judgment when terminating therapeutic relationships,”24 or the therapist could be subject to disciplinary action by the BBS for unprofessional conduct.25 A more in-depth review of these topics can be found in “Parting Ways: Anticipating and Avoiding Problems During Termination,” written by staff attorney Michael Griffin for the September/October 2017 issue of The Therapist.

Client File
One consideration that often is difficult when an employee leaves an organization is the client file. Depending on the employee’s employment and licensure status, the client file, which should include progress notes, could be viewed as a company work product that should be returned upon separation. The organization would be considered the custodian of the record. Both the employer and employee may contract around this and may allow a licensed employee to be the custodian of the record upon mutual agreement.

It is often advantageous for the employer to remain the custodian of the record because of liability issues. Should a client allege that the departing employee committed malpractice while with the employer, the employer may be included in the lawsuit based on the legal doctrine respondeat superior, or vicarious liability.26 An employer without a copy of the record may unnecessarily have put themselves at a disadvantage in litigation.

No matter who is designated the custodian of the client’s record, it needs to remain confidential throughout the transition. All personal health information must remain secure in any transfer or transmittal. This aligns with CAMFT’s Code of Ethics, which states, “[m]arriage and family therapists store, transfer, transmit, and/or dispose of client/patient records in ways that protect confidentiality.”27

There may be signs that a departure is coming, but the actual timing is often undeterminable. Since both the employer and the employee can initiate an employment separation, both sides need to be vigilant in maintaining a positive relationship. The primary objective throughout the separation must be keeping the best interests of their clients in mind.

Luke Martin, MBA, JD, is a staff attorney at CAMFT. Luke is available to answer member calls regarding legal, ethical, and licensure issues.

1 California Labor Code § 2922
2 California Government Code § 12940
3 California Unemployment Insurance Code § 1256
4 California Code of Ethics 4.8
5 CAMFT Code of Ethics 4.10 and California Code of Regulation § 1821 (d)
6 CAMFT Code of Ethics 5.4
7 CAMFT Code of Ethics 1.3, 1.4, and 1.7
8 California Business and Profession Code § 4982
9 16 CCR § 1833.1 (c)
10 California Labor Code 224
11 California Labor Code § 201 and § 227.3
12 California Labor Code § 202
13 Id.
14 Mamika v. Barca (1998) 68 Cal.App4th 487
15 The Department of Industrial Relations website is, and they can be reached by phone at 844 LABOR-DIR (or 844-522-6734).
16 California Business and Profession Code § 4982
17 California Civil Code § 45
18 California Civil Code § 46
19 CAMFT Code of Ethics 1.6
20 California Business and Professions Code § 16600
21 California Business and Professions Code § 4980
22 CAMFT Code of Ethics 1.3
23 CAMFT Code of Ethics 1.7
24 CAMFT Code of Ethics 1.4
25 California Business and Professions Code § 4982 (d)
26 Mary M. v. City of Los Angeles (1991) 54 Cal.3d 202
27 CAMFT Code of Ethics 2.3

This article is not intended to serve as legal advice and is offered for educational purposes only. The information provided should not be used as a substitute for independent legal advice and it is not intended to address every situation that could potentially arise. Please be aware that laws, regulations and technical standards change over time. As a result, it is important to verify and update any reference or information that is provided in this article.