“Ownership” of Clients

If you’re an employer of massage therapists, or you are a massage therapist who’s is employed by someone else, who “owns” the client? The short answer is, no one. People have the right to go where they choose, and to patronize whatever massage therapist they choose to patronize. The long answer is a little more complicated.

A friend of mine who employs other therapists in her practice was upset last week when an employee gave clients a reminder call from her own cell phone on her day off, instead of calling them from the office. The issues there were ownership of the client’s information and a concern about HIPAA violations…and two clients actually called the office to ask why they were being called from the therapist’s cell phone, since previous calls had always come from her office.  She not only fired the employee, she also went to the police about data theft and filed an ethics complaint with the NCBTMB. The business is in an unregulated state, or she would have filed an ethics complaint with the state board, as well. She had plainly stated in her policies and procedures manual that taking the phone numbers and or other information of clients was prohibited, and discusses that fact with each new person she hires. The therapist had done more than just take the phone numbers; she had also downloaded all the treatment notes, etc–including those sessions performed by someone else that she was not involved in. The owner was perfectly within her rights to fire the employee and take the other actions, based on that policy.

I run things differently in my office. Nearly all of the half-dozen therapists who work at my clinic as independent contractors have the phone numbers of their regular clients in their cell phones (remember, my friend’s staff members are employees). It’s our procedure to ask clients if they would like a reminder call or a text message, and it’s my own desire for the therapists to make those calls personally instead of depending on me to do it. I’m the office manager and chief bottle-washer at my place of business, and in addition to the therapists, I also have an acupuncturist, a chiropractor, a clinical herbalist, and an aesthetic nurse there. I make the reminder calls for the chiropractor. I expect everyone else to make their own.

Some people would say that I am making it easy for them to steal clients, in the event they were to leave my practice and go elsewhere. That’s true, but I choose not to look at it that way.  First and foremost, my staff is what has made my business successful. I’m just the ringleader. Everyone there genuinely likes, supports, and refers to each other; it’s a family atmosphere. Staff turnover has happened so rarely that in 8.5 years of owning my business, I can count on one hand the number of people who have ever left. The few times it has happened, I can only think of one of those occasions when a few clients left my business to follow the departed therapist. I don’t begrudge them. They were attached to their therapist, and that’s okay. On the few occasions someone has left, I willingly gave their contact information to clients who called after their departure, if the client didn’t want to see someone else. It wouldn’t endear me any to the public if I was nasty about it. One of my former staff members opened her business less than a mile away from mine. I’ve given her number to quite a few people. It hasn’t hurt my business.

Some employers in our profession require their staff members to sign non-compete agreements, which usually state something along the lines that the person will not practice massage for X period of time within X miles of proximity. Here’s the reality: non-competes aren’t worth the paper they’re written on, according to Dale Atkinson, the Executive Director of the Federation of Associations and Regulatory Boards, who also happens to be the attorney for the Federation of State Massage Therapy Boards. Atkinson says if you are the VP at Massage Envy, privy to proprietary company secrets, in that case a non-compete could stick, but as far as a massage therapist in the average privately-owned business, it is nothing more than an attempt to restrict free enterprise, and will never hold up in court. Of course, an owner with sour grapes can press the issue and cost the therapist time and money in fighting it, but ultimately, the chances of it being enforced are slim to none.

Client information is actually the property of the client. If any client walks in the door and asks for their file to take to their new therapist, you’re obligated to hand it over. You may (and should) keep a copy for yourself, since most state boards have a requirement about what length of time you’re obligated to keep records. You can charge them a copying fee, if you’re so inclined.

My friend was being rightly cautious about HIPAA violations. Since the guilty therapist downloaded client information onto her smart phone, if she were to lose her phone and anyone finding it could access client information, that wouldn’t be a good thing. The burden is on the owner of any business to safeguard client information. Unfortunately, HIPAA has not quite caught up to technology, and some of their wording in regards to the protection of and responsibility for electronic data is vaguely worded. The police department was actually having a hard time deciding what article they could charge the therapist under, because it isn’t very clear on the HIPAA website.  They have a statement on their site that they are “still developing rules.”

When you have been employed somewhere, and you take a different job or go out on your own, it is perfectly legal to take out some advertisements in the paper that say “Laura Allen, Massage Therapist, formerly of THERA-SSAGE, has opened her own practice at Wellness Way in Oxford.”  In fact, it’s a press release, if you send one in to the business editor.

The bottom line is, there are different strokes for different folks. If you are an employer, you have the right to set your own rules. One caveat–it is not enough for you to just tell people on the day you hire them what all your policies are. You need to have a manual, and/or an employment/IC contract, that spells out your policies and procedures in clear terms. And if you’re out there seeking a job, or you already have one, you are obligated to abide by the policies your employer has set forth. If you want to do your own thing, then open your own business. When you agree to go to work for someone else, you agree to abide by their rules, and that includes not stealing client information. It can cost you a lawsuit, and might cost you your license as well, if an employer files an ethics complaint against you.

29 thoughts on ““Ownership” of Clients

  1. Pingback: The Massage Pundit | Massage Magazine | Massage Blog

  2. glen beckel

    Goodwill will always trump P&P, unless you’re talking to a lawyer. Besides the amount of time spent chasing clients and former employees would be good money chasing bad. Stay on course Laura.

  3. Jason

    As the owner of a business in a seasonal resort community, I can ill afford a therapist establishing a following through my business and then doing sessions at the clients’ homes at the same rate of an “in office” visit. It has happened to me only once, but given the substantial overhead I incur owning a store front, advertising, business memberships, etc., I cannot agree with you that karma alone will be compensation enough. Consequently, I have had agreements with therapists that have chosen to go ‘on their own’, and harbor no ill will. I bought out my previous employer and worked hard to expand the business, but I have no problem referring clients out when I cannot accommodate their requests. Just my two cents.

  4. Emmanuel

    If the business does the advertising, solicitation, processing of payments, etc. and the role of the therapist is to do massages, it’s not just karmically wrong for a therapist to solicit the client – it is, as you said, stealing. It takes long time and effort to locate clients, nurture relationships, attract them to come to your business, etc. Advertising is expensive, and so is the overhead of running the business, and so on.

    Clientele, mailing lists, email lists, telephone numbers, and many other things are assets. People pay big bucks for them. Sometimes companies buy other companies only so that they can have access to their accounts. It can be worth a lot to a business, so for someone to use them without permission is wrong.

    It may be different if the business owner functions more as a landlord and the therapists all have their own clients, book their own calls, make their own reminders, etc. Even in a situation where therapists are independent contractors, if client recruitment is done by the business the client list would still be considered a company asset.

    It is true that non-competes are, more often than not, non-enforceable but it is mostly because they are written in such a restrictive manner and nobody can prevent anyone from earning a living. To make non-compete work, employers need to make sure that the restrictions should be what it reasonably needs to protect the company’s legitimate interests.

    It’s gotten to the point where I think it’s a matter of time before an employer with deep pockets like Massage Envy makes an example of an employee or ex-employee who steals clientele. I saw it in the 90s with technology staffing firms who sued their staff because they were soliciting the company’s customers; it scared both the staff and even the customers who then thought twice about working with their vendors’ staff behind the vendors’ backs.

  5. CNW School of Massage

    Although I can see both sides of this issue I agree with you that you can’t force a client to stay with a business after their therapist has left. A client forms the relationship with the therapist not the business. As an LMT I can’t imagine being told NOT to connect with my clients…after all isn’t that part of our work as a therapist… to create a lasting relationship that can foster healing for our clients?!? Bottom line all ownership stays with the client and they will ultimately be the ones to decide where and who they want to work with! Thanks for the great article!

  6. Emmanuel

    Connecting with the client and having a lasting relationship that promotes healing (and return business) does not mean that you should be giving clients your personal business card, call them, or solicit in any other way – unless you have your employer’s permission.

    Sometimes the client may solicit a therapist (“can i see you somewhere where it’s not as expensive?” type of thing), and the therapist needs to make an ethical decision.

    If your employer spent money to bring clients in, paid the rent for your room, paid for your unemployment and workers compensation insurance, made the IRS deposits on your behalf, found you a client, why on earth would you as an “LMT” want to take the business away from your employer? This boggles my mind. I mean, if you did that to your employer, what else would you do? I see the perspective that after the the initial visit, the clients return to see *you* and not your employer, but that is part of why you get paid – to do a good job and have clients come back.

    There are certainly many ways to run a business and many different ways to act as employees; some ethical some less so. Some legal, some not so. Considering the profession is still developing, I think public figures and educators have a special burden in shaping professional ethics. I am afraid that telling LMTs that it’s okay to take clients from your employers in the context of connecting with the client gives the wrong idea.

  7. Nicole

    I agree with Laura. I moved to a new town a few years ago. I found a hair stylist that I really liked right away. Now I found her via the website of the salon. The stylist rented a chair in the salon. I only had contact with the owner. She would not allow the stylist to have the clients contact info. Well eventually the stylist left. When I called to schedule with my stylist I was told she left and would I like to try the NEW stylist. I did not want a new stylist. I wanted MY stylist. I did not want to cultivate another relationship. But the owner of company had totally ingnored my wants. It was very clear that it was about money and not customer service. That left a bad taste in my mouth and I eventually tracked down my old stylist. Not too long after I noticed that the salon went out of business. However, I still went to my orginal stylist at another location.

    Yes the owner of the business dedicates money, time etc. in getting clients in the door. But your staff keeps them there. You have no business without the therapist. A therapist can massage in various settings. So they will have the skills to move on.

    Instead of treating the client like property, treat them like you CARE because in the end that what matters the most. Kudos to you Laura for GETTING it. Most business owners have a “lack” mentality. There is plenty to go around.

  8. Patrick

    as a massage therapist that has left a few practices in my career I can tell you that this is a real issue. In every case I have left my place of business do to poor treatment by the owner of the practice. I must stress that I have only ever been an IC.

    I have always felt that it was more important that the business owner try to make the therapist want to stay with their business rather then making sure that holding clients information as a trade secret, but the reality is that most of them are in business to make money. So instead of keeping a seasoned therapist that has put there time in the reality is to get young blood that will except less money for their work, and with massage schools pumping out some times two classes a year there is no shortage of those young and hungry therapist.

    There is not allot of support for independent contractors out there in the world which means that business owners can do what they want (legal or not) and unless we are willing to go to court, then there is really NOTHING that one can do about it. I call for more support for IC out there that can hold these business owners more accountable for their actions, in turn making the therapist feel more confident in the business that they decide to work with.

    That being said if you are an independent contractor i encourage (if possible) you to get involved in contacting your clients directly b/c like it or not the business owner does NOT own your clients information and if they would like more control then the reality is they may want to change their business to employee/employer relationship.

  9. Keri

    Thank you Laura for a well put together article. I appreciate that you provide facts and not just your opinion.

    In reference to Emmanuel’s comment “Considering the profession is still developing” I would like to point out that most basic massage texts state, “earliest recorded history of massage is with the Chinese, 3000 BC.” Hardly a developing profession in my opinion. Nor do I believe the issue discussed (client ownership) is new. Anybody besides me remember the kindergarten fight centering around, “She’s my friend.” “No she’s my friend.”

    Life experience tells me that there are both moral/ethical and immoral/unethical “people” at both ends of the business.

    The lengths a business owner goes to claim client ownership rights speaks volumes about that persons character as do the lengths a therapists will go to “take” a client with them.

    Patrick-I have worked both as an employee and independent contractor. In both situations you really need to understand the interview process. In particular do not forget that part of interviewing is to find out if this is someone you want to work for as an employee or work with as an independent contractor. Consider asking question such as, What is the therapist turnover rate? How long have your current therapists been working here? If renting space ask, How long has the room been empty? Who rented the room last? How long were they here? Why did they leave? You will find that checking THEM out in the interview will make YOU your biggest support.

    It can be said that since the beginning of time, We All Have Lessons To Learn In Life. I make it a point to only get hit in the head once by the same brick.

    Live well my friends

  10. Emmanuel

    @Keri, massage goes back thousands of years indeed, but it is still developing as a profession, rather than a trade.

    It’s interesting to see the different perspectives. Everyone has a perspective, then there is business ethics (vague depending on where you are coming from), then there is contract law, federal and local labor law, and Federal privacy acts as Laura mentioned.

    I have been an employee, IC, and owner. I have also rented space from someone years ago. There are good and bad employers as they are good and bad employees. If you choose to stay employed with a bad employer and offer that as justification for contacting your their clients, I don’t consider that optimal either. If you are mistreated by your boss, you need to contact your closest dept. of labor office. If you “take” business from your boss, you are also taking business from your coworkers as the business losses will hurt everyone there – not only the boss. I do agree it’s a choice though, just like it’s a choice how to conduct any aspect of one’s life.

    At my current business I offer employees a sheet when they start, where they can write the names of their existing clients. Those are their clients, they have been and they will be if they ever decide to leave the business. Same with my school, if someone has publications, ideas, prior work, I have no rights to that. But I do have the right to what I have paid for, because I paid for it. My expectation is that the clients that I spend thousands of years bringing to the business, and who were not affiliated with the therapists previously will be the clients of the business. If an employee thinks differently it’s a good idea to say it upfront so that nobody time is wasted.

    @Nicole, hairstylists work differently than many massage therapists nowadays. Most hairstylists rent chairs – in the U.S. we now have record numbers of MTs working as employees (because of chains like Massage Envy, but also IRS’ crackdowns on misclassifying employees as independents). As I said above, it’s different when it’s a landlord/tenant scenario.

  11. Emmanuel

    “thousands of years” should have read “thousands of dollars and many years”. Thank you Bill for catching it. I am old, but not that old 🙂

  12. Keri

    Emmanuel,

    Whether it’s “still developing as a profession, rather than a trade.” might be considered splitting hairs. I my point was missed. Thanks for providing an opportunity to explain.

    The massage profession/trade has been around a very long time.
    The fight over ownership has been around a very long time. (even pre-dates my kindergarten class and I am old) People fight the ownership battle over many things including massage. Fighting is a natural part of human beings. Observing the lengths a person will go to to win a battle gives us an opportunity to “judge” the participants as moral/immoral or ethical/unethical.

    After spending thousands of dollars bringing new clients to your business I can understand your perception of ownership. How do your new clients feel about being owned?

    It’s a great idea to “offer employees a sheet when they start, where they can write the names of existing clients.” Massage Envy does the same thing. Have you ever been in a position to write down the names of all your clients? What happens if (as a therapist) you run into a client at your employers business that you did not write down?

    How do you distinguish between new clients that you advertise/pay for and new clients that come as a referral for a specific therapist because of that particular therapist’s skill level? Without a distinction and full disclosure somebody will most likely end up feeling cheated unless of course you don’t encourage client referrral.

    As far as landlord/tenant scenarios go it is my experience that the same issues exist. Business owners, more often than not, will attempt to keep ownership of clients seeking hair, nail, or massage services even when the service provider rents/leases the space.

    Been there done that.
    Keri

  13. Conan Owen

    A couple of observations.

    1) Employee situations are often substantially different than IC situations, but both can be structured to protect the business interests accordingly

    2) The client information may belong to the client, but access to the client CONTACT information belongs to the business. It is the contact information that is proprietary, not the operating strategy of Jane’s Massage Clinic, that is protected

    3) non-competes and non-solicitations and non-disclosures are 3 different things, often referred to interchangeably incorrectly so. Non-competes are rarely enforceable, especially in this industry for being written too broadly, but narrowly defined ones are and have been upheld. Non-soliciitations/confidentiality agreements regarding client information ARE 100% viable and a good idea.

    4) The client may have “freedom” to choose where they go, but to often whenever I read that line of reasoning it mistakenly leads down the path that somehow the therapist has the right to give THEIR contact information to the client or get the client’s contact information to solicit them to exercise that freedom of choice. Yes, humans have freedom of choice, but the business is under no moral or legal obligation to assist them in exercising it to their own detriment.

    5) interesting contradiction in Laura’s experience, I often hear echoed by others. “Clients have relationships with/the right to follow therapists to greener pastures” vs “I don’t restrict access to client info, because I rarely see clients leave my business to follow a therapist”. So which is it — the client loves the practice or the client loves the therapist?

    6) Repeat clients due to a therapist’s skill — does not mean squat. A) the establishment was the one who found the therapist and gave them a job (I’ve never met an establishment owner that was “tipped” by a client for finding such a great staff and creating such a great experience) B) if our therapists do not have X% of retention, they don’t last. It’s part of their job.

  14. Emmanuel

    Keri, it is true that conflict is not a new thing and certainly not unique to massage therapy. The concepts of ownership, possession (different from ownership), confidentiality, intellectual property, and competition are old concepts. Societies have established guidelines of conduct (ethics) and laws to govern those concepts and to protect people from being harmed.

    There are laws that protect businesses, employees, consumers, etc. Laws do evolve, but they are not as fluid as they seem by looking at some of the online posts surrounding massage business.

    I think the fact that in massage therapy we are still arguing the basics, such as ownership of clients’ contact information or, as I saw on another forum, whether you should pay a referral fee to a physician (illegal) is because massage therapy is still developing as a profession. A large number of therapists are not versed in contract law, employment law, or have even discussed this type of topics before, so they rely on second-hand information from other professions to determine how it’s done.

    That is why I wrote of the special burden that educators and public figures play in shaping ethics. As the profession matures, I would think these topics such as competition and client ownership will be included in massage therapy training programs under the topic of running an ethical (and legal) practice.

    Regarding how the clients feel about being “owned”, the question is misleading because clients (as in “human beings”) are not owned. How would clients feel if I told them that I will share their personal information with all my staff so that the staff can contact them when they want to?

    To answer your remark that I feel this way because I have invested thousands of dollars, I will share a personal story to make my point. Twenty years ago I was working as consultant for a big company through another firm. I was an independent contractor, but the company I was subbing through had identified the client and it was their account.

    The customer for whom I was performing the work liked my work, but they were going to stop working with my firm because of budget cuts. He asked if I could stay on and work directly with them. Understanding that my relationship was not direct but through my employer, I approached my boss and explained the situation. We worked out a deal where I paid a 10% agent’s fee to my employer for a year. The 10% was on all my earnings from that particular client in return for waiving the non-compete I had signed. During that year I brought four other people to work with me on my project. I paid 10% of their earnings to my former boss as well. The former employer made over 100K in a year from the arrangement, my client was happy, and I was certainly happy to be running my own ship and billing directly the client. I ended up staying an additional three years there running several projects, so it worked really well for me too in the long run.

    My point is that the right thing to do does not depend on which side of the situation you find yourself in, but on the understanding that engaging in good business involves dealing in fairness. There is always a fair way to resolve things, but I know not all employers or employees feel that way. If it goes as far as “did I include this client on the sheet, did I get this client through a referral of my own client”, then the whole point is missed. The business relationship is long gone if it gets to that point.

    There will be a day where these discussions will not be taking place. We will all know what to do, because we have been taught that in school. We will trust that engaging in business is the only way that people can overcome their shortcomings and create value with limited resources. Not by fighting over ownership, but by collaborating.

  15. Conan Owen

    “How would clients feel if I told them that I will share their personal information with all my staff so that the staff can contact them when they want to? ”

    Brilliant point! There is an entire segment of society that would jump to sue any medical entity, on-line retailer, Fortune 500 company or other entity not protecting their contact information.

  16. Kate

    What about when you refer clients to your boss” business and they come occasionally to that business? I have been solicited to treat two of my clients at my present spa. One of them does not entirely count since, mobile massage is something my spa does not have an interest in doing; the second client was also a student of the college, and you could argue that she was approaching in that capacity since she approached me outside the spa itself after conducintg student business. My intentions are fair, yet strictly speaking I have indeed behaved unethically, even though in both cases it is my services and not the environment that was important to those clients. Often, especially in a spa, the spa environment is very important part of the experience, and that is why on occasion I have referred people and even my own friends to the spa; in other words three times as many people as I have decided to treat in my own practice (both of whom, incidentally continue to go occasionally, albeit less regularly than before to the spa).

    I agree that a business not only gets clients in the door, but gets them used to coming to a particular place. If they find a massage therapist they click with that’s icing on the cake, because it could just as easily be another therapist. However, sometimes the client is not so attached to the place but more so to the therapist. My experience is that the more ethical and fair an employer is, the more likely they are to employee employees who have their best interests at heart.The more mistrustful and guarded they are about client information, the more likely they, as employers, are to behave dishonourably in a number of different ways.

  17. Conan Owen

    [pretty strong bias against employers in your post

    “My experience is that the more ethical and fair an employer is, the more likely they are to employee employees who have their best interests at heart.”

    What about the ethics and responsible attitude of the employee? Don’t they bring something to the table too, or is that just “earned” by the employer?

    “The more mistrustful and guarded they are about client information, the more likely they, as employers, are to behave dishonourably in a number of different ways.”
    Same is true of the employees. Those who steal client info — even if they don’t use it right away — or if they steal time, or overuse products, or giveaway aromatherapy upgrades to get better tips…. all of these are “gateway” behaviors to dishonorable employees.

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  20. frank huang

    Yes the clients can decide which business and which therapist wants to go with or follow. I own a massage business and I hires all my therapists as employees. I don’t have any issue when a client come in and ask where can he/she find the therapist who no longer works here. I will call and find out and all them back so they can follow that therapist. I understand all of this, BUT I do have issue with therapists actively solicit and giving out or calling clients to take them else where. To me that is stealing. We spend thousands of dollars a month doing advertising, groupons, providing all the supplies, rent, utilities and training to get the clients to come in and it is NOT FAIR and DISRESPECTFUL for a therapist to tell clients to go with them else where, because that clients probably has also been with other therapists at the same spa. So its also stealing from your co-workers. From a ethical point of view it is wrong and there is a saying Don’t bite the hands that feed you. Which business would like to hire someone if they knew they are going to do that? If you come in during your interview and say to me yes I intend to take those clients with me when I leave and I will offer them another place to go, giving them lower prices. Would you have hired that person? If that is the right thing to do, do you think the therapist would want to say that to your face? Probably not, why? Because it is wrong and shady. Anytime when you can’t speak the truth because you are afraid by telling that truth will not get you hired, you engaged in deception and manipulation.

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