Are you speaking about not contributing to your 401K any longer, or withdrawing contributions to date?
Depending on company policy at least once a year you can change the percentage that you contribute to your account but you can only do that on their open dates. If you are planning to withdrawl your money out of it, you will have to take a 10 percent penalty on the total amount which means you will owe the goverment 10 percent tax on the amount when you close the account.

Yes, you can still be employed.

You can withdraw from your 401k and have a check mailed to you , but
you will have to pay income tax (20% or more) plus a 10% penalty if
your under 55 1/2 years old, in some cases the 10% penalty may
not apply to hardship cases .
check with your 401k provider or human resources.
your will still retain your employment.(your job),

I would comment, that some employers make it mandatory to contribute. The can terminate a person for refusing to follow company rules, gidelines, policies. Terminating someone because they do not want to follow the company-wide policy is permissable. Some companies, the 401K or whatever retirement /investment plan they offer, is voluntary, with others it is not. You should inquire with the people in Human Relations at your comapny ask them if participation is mandatory. If it is, that means they might , and can, terminate you if you refude to participate.

I had no idea that you could be terminated for non-participation? How is that possible?

I guess I don't understand what you don't understand: )

When a person accepts a job with a "firm" a company , a businesss, there are conditions. If one of those conditions is that all employees particpate in a retirement plan, and that a certain percentage is with held for that retirment plan, the employee agrees to particpate by accepting employment. The same as if the "firm" explains you will work 4 , 10 hour days or must be in by 8 am. A refusal or violation of a (legal) condition of employment , is grounds for termination.

If the participation is voluntary, such a health insurance, then it is not a problem. Forinstance, many companies have profit sharing; all profit sharing programs I have seen require particiaption. You cannot opt out

Which brings us to termination, if you decide you donot want to participate , in spite of the fact it is mandatory, then the comapny could choose to terminate you.

The underpinning of this question is whether the retirement plan is voluntary or not. If it is voluntary, she has no problem. If it is required, then she has a problem.

Ther comes to mind a very large grocery chain in the midwest which does have a mandatory retirement plan. Yet the vast majority of their employees are part time. Teenagers especially are quite annoyed to have to participate. The plan doesn't become vested for 5 years, and the"kids" do gettheir money back when they terminate. But they cannot accept employment and opt out.