Ethics Case Project

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Example Ethics Case Solutions

USE OF ALLEGED HAZARDOUS MATERIAL

IN A PROCESSING FACILITY

Case 11 Facts:

Engineer A is a graduate engineer in a company’s manufacturing facility that uses toxic chemicals in its processing operations. Engineer A’s job has nothing to do with the use and control of these materials.

A chemical called "MegaX" is used at the site. Recent stories in the news have reported alleged immediate and long-term human genetic hazards from inhalation of or other contact with MegaX. The news items are based on findings from laboratory experiments, which were done on mice, by a graduate student at a well-respected university’s physiology department. Other scientists have neither confirmed nor refuted the experimental findings. Federal and local governments have not made official pronouncements on the subject.

Several colleagues outside of the company have approached Engineer A on the subject and ask Engineer A to "do something" to eliminate the use of MegaX at the processing facility. Engineer A mentions this concern to her manager who tells Engineer A, "Don't worry, we have an Industrial Safety Specialist who handles that."

Two months elapse and MegaX is still used in the factory. The controversy in the press continues, but since there is no further scientific evidence pro or con in the matter, the issues remain unresolved. The use of the chemical in the processing facility has increased and now more workers are exposed daily to the substance than was the case two months ago. Question:

Does Engineer A have an obligation to take further action under the facts and circumstances?

References:

Section II.1. - Code of Ethics: Engineers shall hold paramount the safety, health and welfare of the public.

Section II.1.a. - Code of Ethics: If engineers’ judgment is overruled under circumstances that endanger life or property, they shall notify their employer or client and such other authority as may be appropriate.

Section II.2. - Code of Ethics: Engineers shall perform services only in the areas of their competence.

Discussion:

The present case presents one of the most fundamental ethical issues that engineers sometimes face in their professional careers – how far is an engineer ethically required to go in order to comply with NSPE Code? This question involves a variety of competing concerns and interests relating to the engineers responsibilities to the public health and safety and the engineers obligations to his or her employer or clients.

The Board has had at least one opportunity to consider the responsibilities of an engineer in connection with hazardous material in the past. In Case 92-6, Technician A was a field technician employed by a consulting environmental engineering firm. At the direction of his supervisor Engineer B, Technician A sampled the contents of drums located on the property of a client. Based on Technician A's past experience, it was his opinion that analysis of the sample would most likely determine that the drum contents would be classified as hazardous waste. If the material is hazardous waste, Technician A knew that certain steps would legally have to be taken to transport and properly dispose of the drum, including notifying the proper federal and state authorities. Technician A asked his supervisor Engineer B what to do with the samples. Engineer B told Technician A only to document the existence of the samples. Technician A was then told by Engineer B that since the client does other business with the firm, Engineer B will tell the client where the drums are located but do nothing else. Thereafter, Engineer B informed the client of the presence of drums containing "questionable material" and suggests that they be removed. The client contacts another firm and has the material removed. In deciding that Engineer B’s actions were unethical, the Board noted that Engineer B's responsibility under the facts was to bring the matter of the drums possibly containing hazardous material to the attention of the client with a recommendation that the material be analyzed. To do less would be unethical. If analysis demonstrates that the material is indeed hazardous, the client would have the obligation of disposing of the material in accordance with applicable federal, state and local laws.

Under the fact in this case, the Board believes Engineer A did all that could be required of an engineer to comply with the requirements of the NSPE Code. Unlike Case 92-6, there is nothing to suggest any illegal or improper actions or conduct by Engineer A’s employer. While Engineer A may have had an obligation

to raise the issue with the employer, which Engineer A did when she mentioned the issue to her manager, to take further unspecified action, in light of the facts, would have been premature and also unreasonable under the circumstances. Engineer A was not directly involved in the use or control of the substance in question and therefore presumably had no actual experience with the substance. In addition, the concerns about the substance were raised to Engineer A by individuals outside of the company who may have had a bias. It is unclear whether such individuals’ comments were based upon scientific or engineering data or whether they were expressions of purely personal viewpoints. In addition, while there may have been news stories discussing the alleged dangers involved with the substance, scientific evidence was still in dispute and no governmental action had been taken to eliminate the use of the substance. On this basis, it is clear that any further actions taken by Engineer A would have been premature and could have easily jeopardized the interests of Engineer A’s employer.

Furthermore, it is entirely unclear what actions Engineer A could have taken under the circumstances. News and information about the substance were well publicized and the company indicated that it was taking appropriate steps to safeguard company employees. A vague and unsubstantiated concern about safety based upon conjecture and speculation is hardly a basis upon which to take action. However, should Engineer A become aware of facts which would change these conclusions, she should pursue the matter further.

Conclusion:

Engineer A has no obligation to take further action under the facts and circumstances.

BOARD OF ETHICAL REVIEW Lorry T. Bannes, P.E., NSPE E. Dave Dorchester, P.E., NSPE John W. Gregorits, P.E., NSPE Paul E. Pritzker, P.E., NSPE Richard Simberg, P.E., NSPE Harold E. Williamson, P.E., NSPE C. Allen Wortley, P.E., NSPE, Chair NOTE: The NSPE Board of Ethical Review (BER) considers ethical cases involving either real or hypothetical matters submitted to it from NSPE members, other engineers, public officials and members of the public. The BER reviews each case in the context of the NSPE Code and earlier BER opinions. The facts contained in each case do not necessarily represent all of the pertinent facts submitted to or reviewed by the BER.

Each opinion is intended as guidance to individual practicing engineers, students and the public. In regard to the question of application of the NSPE Code to

engineering organizations (e.g., corporations, partnerships, sole-proprietorships, government agencies, university engineering departments, etc.), the specific business form or type should not negate nor detract from the conformance of individuals to the NSPE Code. The NSPE Code deals with professional services -- which services must be performed by real persons. Real persons in turn establish and implement policies within business structures.

This opinion is for educational purposes only. It may be reprinted without further permission, provided that this statement is included before or after the text of the case and that appropriate attribution is provided to the National Society of Professional Engineers’ Board of Ethical Review.

Visit NSPE’s website (www.nspe.org) and learn how to obtain complete volumes that include all NSPE Opinions (or call 1-800-417-0348).

REVIEWING AND REDESIGNING THE WORK OF ANOTHER ENGINEER

Case No. 10

Facts:

Engineer A is retained by Client E, a local board of education, to investigate a recently constructed building project that is expected to result in litigation due to alleged design defects by Engineer B and its sub-consultants. At Client E’s request, Engineer A prepares a deficiency evaluation report for Client E without contacting Engineer B, who has not been terminated, and Engineer A is paid for the report. The report advises Client E on how to reconstruct the alleged deficiencies that Engineer A alleges to have taken place. Engineer A is then requested by Client E to serve as an expert witness prior to and during the litigation against Engineer B and its sub-consultants. Later, Client E requests Engineer A to submit a proposal for the correction of the alleged design defects by Engineer B. Engineer A agrees to submit a proposal.

Questions:

1. Was it ethical for Engineer A, without notifying Engineer B, to submit the design deficiency report?

2. Was it ethical for Engineer A to then submit a proposal to correct the alleged design defects by Engineer B? References:

Section II.4.a. - Code of Ethics: Engineers shall disclose all known or potential conflicts of interest which could influence or appear to influence their judgment or the quality of their services.

Section III.6.a. - Code of Ethics: Engineers shall not request, propose, or accept a commission on a contingent basis under circumstances in which their judgment may be compromised.

Section III.7.a. - Code of Ethics: Engineers in private practice shall not review the work of another engineer for the same client, except with the knowledge of such engineer, or unless the connection of such engineer with the work has been terminated.

Discussion:

The Board has considered cases involving reviewing the work of another engineer and liability issues in the past. BER Case No. 91-2 involved a Client, a non-engineer who retained Engineer A (a consulting engineer) to perform certain design services in connection with a wastewater treatment facility. Engineer A performed the design services, and the Client reviewed the documents prepared by Engineer A. Following review, Client made the judgment that the documents prepared by Engineer A contained errors and omissions. Client terminated his relationship with Engineer A. Client then contacted Engineer B and proposed an arrangement whereby Engineer B would review the work prepared by Engineer A and identify errors and omissions contained in the documents in contemplation of a suit for breach of contract. Engineer B's fee was dependent upon the ultimate court judgment or settlement made with Engineer A. Engineer B accepted the assignment under the terms proposed by Client. The Board of Ethical Review followed the reasoning in early BER Case Nos. 65-4 and 66-11 and ruled that the actions were not ethical. The Board concluded that Engineer B was being placed in a position of identifying errors and omissions in Engineer A's work in order to pressure Engineer A into a settlement which would result in a fee for Engineer B. By finding no errors and omissions in Engineer A's work, there would be no fee. These circumstances appear to be just the very factors for which NSPE Code Section III.7.a. was intended to guard against. The Board noted that it would be difficult to imagine a clearer set of circumstances involving a contingent fee arrangement, in which an engineer's professional judgment could risk becoming compromised.

While the facts and circumstances in the present case are somewhat different than those in the earlier cited cases, the Board is not entirely comfortable with the sequence of events and the actions of Engineer A in connection with Engineer A’s preparation of the deficiency report relating to the project, as well as follow-up services to Client E. As a general rule, engineers should not review the work of another engineer for the same client, except with the knowledge of such engineer, or unless the connection of such engineer with the work has been terminated. NSPE Code Section III.7.a. is intended to protect the interests of Client E and other similarly situated clients by requiring the subsequent engineer (Engineer A) to make contact with the original engineer (Engineer B) and inquire the reasoning and rationale for original engineer’s design decisions in connection

with the project. This provision is designed to stimulate discussion in pursuit of the best solution for the client, encourage greater cooperation and mutual respect among engineering peers, and avoid the quick move toward an adversarial posture among the parties. In some cases the subsequent engineer may find that the original engineer may be reluctant to communicate his reasoning and rationale to the subsequent engineer, particularly in view of the possibility or in this case the probability of litigation. Nevertheless, the subsequent engineer has an affirmative obligation under the NSPE Code to, at a minimum, provide appropriate notice to the original engineer of the subsequent engineer’s review of the work. On that basis, it is the Board’s view that Engineer A had an obligation to at least communicate with Engineer B prior to submitting the deficiency report to Client E.

Regarding Engineer A’s submitting a proposal to correct the alleged design defects by Engineer B, we believe the analysis of this issue is much the same as the analysis of Engineer A preparing the deficiency evaluation report. Having not provided adequate notice to Engineer B, Engineer A did not have the benefit of the input from Engineer B concerning the original design. While it may have appeared clear to Engineer A that defects existed and that additional design work would be necessary for the benefit of the client, there may have been additional approaches that might have surfaced in Engineer A’s discussion with Engineer B that could have benefited Client E. For example, in light of the possibility of litigation, Engineer B might have been willing to provide a portion of the corrected work under Engineer A’s review in exchange for an agreement on the part of Client E not to pursue a lawsuit against Engineer B and his subconsultants. However, by taking the actions he did, Engineer A may have effectively foreclosed the possibility of a mutually beneficial resolution of this matter.

Conclusions:

1. It was not ethical for Engineer A to submit the design deficiency report without notifying Engineer B who had not been terminated.

2. Since Engineer A did not notify Engineer B, it was not ethical for Engineer A to submit a proposal to correct the alleged design defects by

Engineer B.

CONFLICT OF INTEREST

SPECIFYING EQUIPMENT -- WITH OWNERSHIP INTEREST

Case No. 99-9

Facts:

Engineer A was requested by Client Z to prepare specifications for a curtain wall system. Engineer A immediately makes Client Z aware that he is a minority shareholder in a curtain wall manufacturing company and that if Client Z agreed, Engineer A would be pleased to prepare a set of generic specifications for a curtain wall system. Client Z agrees but silent on the point of having Engineer A’s firm submit a proposal. Later, Engineer A provides Client Z with the names of three manufacturers that prepare curtain wall systems for bidding purposes. Engineer A includes the name of his firm among the three manufacturers, but does not include the full specifications and other supporting material about Engineer A’s curtain wall manufacturing firm with the bidding material provided to the client. Engineer A’s reasoning is that he could answer any questions that Client Z might have about the curtain wall manufacturing system in his company. After evaluating the proposals solicited through documentation prepared by Engineer A, and upon Engineer A’s recommendation Client Z selects Engineer A’s company. Question:

Was it ethical for Engineer A to prepare bidding criteria, bid, evaluate bids, and recommend his company for owner selection?

References:

Section II.4.a. - NSPE Code: Engineers shall disclose all known or potential conflicts of interest which could influence or appear to influence their judgment or the quality of their services.

Section II.4.b. - NSPE Code: Engineers shall not accept compensation, financial or otherwise, from more than one party for services on the same project, or for services pertaining to the same project, unless the circumstances are fully disclosed and agreed to by all interested parties.

Section III.5.b. - NSPE Code: Engineers shall not accept commissions or allowances, directly or indirectly, from contractors or other parties dealing with clients or employers of the Engineer in connection with work for which the Engineer is responsible.

Discussion:

The Board considered at least one case with similar facts in recent years. In Case 98-11, Engineer A was asked by a firm to prepare specifications for an air compression system. Engineer A made the firm aware that she was the President (and major shareholder) of a company that manufactures and sells air compression systems and that she had no problem with preparing a set of

generic specifications. Engineer A also provided the firm with four other manufacturers that prepare air compression systems for bidding purposes, and Engineer A did not include her company as one of the four specified manufacturers. The Board ruled that, although Engineer A was the President and major shareholder in a company that manufactured and sold air compression systems, clearly Engineer took all necessary and reasonable steps to disclose all potential conflicts of interest in order to avoid any appearance of a conflict. By immediately disclosing the fact that she had a major interest in an air compression manufacturing company, by suggesting the name of four other alternative manufacturers, and by raising the issue before it surfaces as a result of possible appearances, Engineer A has acted consistently with the NSPE Code. The Board also noted that unlike the previous versions of the NSPE Code that required the engineer to "avoid" conflicts of interest, the current code acknowledge that conflicts do arise and imposes upon the engineer the responsibility to take all reasonable steps to notify and advise the client – leaving it up to the client whether to proceed with the services of the engineer. It was the Board’s view that Engineer A’s conduct was in keeping with NSPE Code provision that engineers must disclose all known conflicts of interest which could influence or appear to influence their judgment or the quality of their services.

Engineers are always cautioned by the NSPE Code to disclose all known or potential conflicts of interest by promptly informing clients of any business association, interest or other circumstances which could influence or appear to influence their judgment or the quality of their services. Under the facts of the current case, it is not entirely clear why and on what basis Client Z selected Engineer A to provide the curtain wall specifications on behalf of Client Z. It could be that in the rendering of consulting services, Engineer A performed professional services to the satisfaction of Client Z and this fact may have persuaded Client Z to select Engineer A’s curtain wall company to manufacture the required equipment. At the same time, the Board believes the early and complete disclosure by Engineer A, needs to be balanced against Engineer A’s later inclusion of his firm on the list of potential curtain wall manufacturers without the client’s prior affirmative approval. The Board believes this point is instructive because it demonstrated Engineer A’s recognition of the potential for a conflict of interest in connection with the services provided to Client Z and the actions he took in regard to that potential conflict. In this connection, the Board is somewhat troubled by Engineer A’s conduct and lack of initial full disclosure in the face of Client Z’s failure to expressly approve Engineer A’s actions.

Although the facts do not totally and completely detail Engineer A’s roles and functions, the Board was concerned that all interested parties, including other bidders, were aware of and voluntarily participated in this process knowing that Engineer A prepared the specs, bid the job, evaluated the bids, and recommended a selection to Client Z. The criteria for selection (i.e., cost or cost+time+quality) and handling of the bids (i.e., public opening or private with

results published) would also be appropriate data to share with all interested parties.

While it is difficult to speculate what Client Z’s thinking and considerations were in connection with its selection of Engineer A’s company, we do have a concern over Client Z’s selection of Engineer A’s curtain wall manufacturing company under the facts. The Board is also concerned that the decision to select Engineer A’s firm was made without Client Z affirmatively approving in the early stages Engineer’s A’s firm’s participation in the bidding process. The Board is of the opinion that Engineer A’s actions could be interpreted as being calculated to result in the selection of his firm from the beginning despite the fact that Engineer A provided early partial notice of the potential conflict of interest.

In addition, the Board is troubled that Engineer A did not provide Client Z with initial complete and appropriate information about the products available from Engineer A’s firm, the manufacturing process, services provided, warranty information, operation and maintenance, and other important issues. In this connection, the Board believes that once Engineer A made the decision to include his firm in the bidding process, Engineer A should have provided Client Z with the same information and under the same circumstances that Engineer A provided Client Z with the information about the two other competing firms so that Client Z would have complete information upon which to make a decision, review with other Client Z representatives and compare the information objectively with the other proposals. As a consultant to Client Z, Engineer A had the same obligations to Client Z with respect to his firm as Engineer A had with respect to the other two firms being considered by Client Z.

While there is nothing under the facts to indicate such, Engineer A also needs to be careful that his documentation soliciting proposals by the two other curtain wall manufacturing firms did not in any way cast the competing firms in a bad light that would cause Client Z not to select a qualified firm among the two other firms. An engineer that engages in such conduct would be in clear violation of the language and the intent of the NSPE Code.

Conclusion:

It was not ethical for Engineer A to prepare bidding criteria, bid, evaluate bids, and recommend his company for owner selection. Engineer A would have been better advised to avoid this conflict of interest.

INCOMPLETE PLANS AND SPECIFICATIONS –

ENGINEER, GOVERNMENT, AND CONTRACTOR RESPONSIBILITIES

Case No. 8 Facts:

Engineer A responds to an RFP from a small local public agency to build a new dam to be financed in part by a federal grant. Engineer A’s firm’s impressive brochure and personal interview results in the award of a contract for the design, drawings, and specifications.

The signed and sealed drawings and specifications are ultimately approved by Engineer B of the engineering staff of the federal agency funding the project, and the project is thereafter duly advertised for bids and a contract is awarded to the low bidder, Hi-Lo Construction. The local public agency does not have the in- house technical resources to review the drawings and specifications.

At the pre-construction conference, it is pointed out by Engineer C, owner of Hi- Lo Construction, that much of the design detail is lacking in the drawings and specifications and that Hi-Lo Construction declares that certain parts of the project are "unbuildable" without major changes. Engineer A generally agrees with Hi-Lo’s characterization, but in his defense responds that he felt pressured to deliver the drawings and specifications on a specified date, but did not inform anyone as to their incompleteness. While much of the information was missing from the drawings and specifications, Engineer A was confident that sufficient federal funds (and not local funding) would cover any potential increased costs. Questions:

1. Was it ethical for Engineer A to submit final drawings and specifications for review and approval that he knew were incomplete?

2. Was it ethical for Engineer B to approve a set of incomplete drawings on behalf of the Federal government for competitive bidding?

3. Was it ethical for Engineer C, owner of the Hi-Lo Construction firm, to submit a bid on a construction contract that he later characterized as "unbuildable" without major changes? References:

Section I.1. - Code of Ethics: Engineers, in the fulfillment of their professional duties, shall hold paramount the safety, health and welfare of the public.

Section II.3.a. - Code of Ethics: Engineers shall be objective and truthful in professional reports, statements or testimony. They shall include all relevant and pertinent information in such reports, statements or testimony, which should bear the date indicating when it was current.

Section II.5. - Code of Ethics: Engineers shall avoid deceptive acts.

Section III.1.b. - Code of Ethics: Engineers shall advise their clients or employers when they believe a project will not be successful.

Section III.2.b. - Code of Ethics: Engineers shall not complete, sign or seal plans and/or specifications that are not in conformity with applicable engineering standards. If the client or employer insists on such unprofessional conduct, they shall notify the proper authorities and withdraw from further service on the project.

Discussion:

The Board has considered cases involving similar situations in the past. In BER Case No. 82-5, where an engineer employed by a large defense industry firm documented and reported to his employer excessive costs and time delays by sub-contractors, the Board ruled that the engineer did not have an ethical obligation to continue his efforts to secure a change in the policy after his employer rejected his reports or to report his concerns to proper authority, but has an ethical right to do so as a matter of personal conscience. The Board noted that the case did not involve a danger to the public health or safety, but related to a claim of unsatisfactory plans and the unjustified expenditure of public funds. The Board indicated that it could dismiss the case on the narrow ground that the NSPE Code does not apply to a claim not involving public health and safety, but that was too narrow a reading of the ethical duties of engineers engaged in such activities. The Board also stated that if an engineer feels strongly that an employer's course of conduct is improper when related to public concerns, and if the engineer feels compelled to blow the whistle to expose facts as he sees them, he may well have to pay the price of loss of employment. In this type of situation, the Board felt that the ethical duty or right of the engineer becomes a matter of personal conscience, but the Board was unwilling to make a blanket statement that there is an ethical duty in these kinds of situations for the engineer to continue the campaign within the company and make the issue one for public discussion.

As in Case No. 82-5, the issue does not allege a danger to public health or safety, but is premised upon a claim of unsatisfactory plans and the unjustified expenditure of public funds. In Case No. 82-5, the Board found that, while the Code did not require disclosure, the engineer did have an ethical right to pursue the matter further, even to the point of public disclosure. Unlike Case No. 82-5, this case does not involve a conflict with the ethical requirement of confidentiality, but concerns the affirmative responsibility of engineers to complete plans in conformity with applicable engineering standards and avoid deceptive acts.

While the Board certainly hopes that the facts involved in this case are very unique and do not represent more than a small fraction of public design and

construction projects in the United States, it appears that the facts as presented in this case are, unfortunately, not as unique as one might hope.

It is clear that Engineer A had an obligation to provide a complete set of design drawings and specifications on the project in which Engineer A was engaged. Unlike what is required on some projects (e.g., design/build or construction contracts with specific design delegation clauses or provisions) where the engineer is expected to only design a certain percentage of the project prior to the selection of the contractor, here, Engineer A was fully required to provide the complete design on the project. Engineer A’s bold assertion that the work was incomplete, but that this was due to time pressures and his expectation that Federal funds would be awarded to complete the work is wholly unconvincing. Engineer A was selected for his expertise, which presumably included Engineer A’s ability to fully perform the work based on project time parameters. Engineer A’s comment about Federal funds borders on fraud and misrepresentation and is a clear violation of the NSPE Code.

Engineer B’s approval of Engineer A’s incomplete plans is troubling, although we do not know all of the facts and circumstances relating to the decision to approve. Engineers have an obligation to perform services within their area of competence. If Engineer B was not able to perform the necessary reviews of Engineer A’s work, Engineer B should have provided this information to a supervisor who would have assigned an appropriate engineer to perform the review. Not possessing adequate competency to perform a task is not in and of itself a violation of the NSPE Code, but the failure to recognize the lack of competency and take appropriate action to address the situation is a violation of the NSPE Code.

Finally, the Board believes that Engineer C’s actions in bidding on an "unbuildable" contract is also very troubling. Presumably, Engineer C had an opportunity to review the bidding documents which included appropriate engineering drawings, plans, and specifications. From such a review, Engineer C should have had a sense of what would be necessary to complete the project. If the engineering documents were incomplete or inadequate, then Engineer C’s bid should have reflected that fact and contained appropriate bid items for additional services required to complete the work for the benefit of the owner. In addition, Engineer C could have requested further clarification from the owner or Engineer A in order to better understand the engineering drawings. As an engineer and a contractor presumably, Engineer C had the necessary background and experience to carefully evaluate the engineering drawings as well as other aspects of the work in order to make an informed decision as to whether to bid on the project. Engineer C had no one to fault but himself for the problems Engineer C encountered in attempting to build the project. Engineer C submitted the low bid on the project, presumably knowing inadequacies of the documents as well as the obvious risks involved.

Conclusions:

1. It was not ethical for Engineer A to submit drawings and specifications for review and approval that he knew were incomplete.

2. It was not ethical for Engineer B to approve a set of incomplete drawings on behalf of the Federal government for competitive bidding.

3. It was not ethical for Engineer C, owner of the Hi-Lo Construction firm, to submit a bid on a construction contract that he later characterized as "unbuildable" without major changes.

DISCLOSURE – ADVISING CLIENT TO EXERCISE

JUDGMENT WHEN DISCLOSING INFORMATION TO ENGINEER

Case No. 7 Facts:

Engineer A is a consulting engineer and provides civil and environmental engineering services for public and private clients. Among the standard practices that Engineer A has incorporated when initially meeting with clients is to explain to the client that in an effort to fulfill his obligation as a faithful agent and trustee to the client, the client should be advised that should Engineer A discover a danger to the public health and safety, he (Engineer A) has an ethical obligation to report such violations of the law to the appropriate public authorities and, therefore, the client "should exercise judgment and discretion when providing information to him or making him aware of facts and circumstances that could involve a violation of the law." Question:

Was it ethical for Engineer A to advise the client in the manner described?

References:

Section I.1. - Code of Ethics: Engineers, in the fulfillment of their professional duties, shall hold paramount the safety, health and welfare of the public.

Section II.1.d. - Code of Ethics: Engineers shall not permit the use of their name or associate in business ventures with any person or firm which they believe is engaged in fraudulent or dishonest enterprise.

Section II.1.e. - Code of Ethics: Engineers having knowledge of any alleged violation of this Code shall report thereon to appropriate professional bodies and, when relevant, also to public authorities, and cooperate with the proper authorities in furnishing such information or assistance as may be required.

Section II.4. - Code of Ethics: Engineers shall act for each employer or client as faithful agents or trustees.

Section III.1.b. - Code of Ethics: Engineers shall advise their clients or employers when they believe a project will not be successful.

Over the years, the Board has considered cases relating to the duty of the engineer to report safety violations, report unrelated information observed during the rendering of services, and the duty to report unsafe conditions in the context of a client requesting secrecy. The Board has interpreted the language contained in NSPE Code Section II.4. in the context of the obligations of employed engineers to maintain the confidences of their employer particularly with regard to certain confidential information that might be made available to the engineer during the course of employment or on a consulting basis, as in BER Case No. 61-8. However, more recently, the Board has also interpreted this language in the context of the relationships owed by the engineer in private practice to the client and the public.

The facts in this case are somewhat different than those presented in BER Case No. 89-7. In that case, Engineer A was retained to investigate the structural integrity of a 60-year old occupied apartment building, which his client is planning to sell. Under the terms of the agreement with the client, the structural report written by Engineer A was to remain confidential. In addition, the client made it clear to Engineer A that the building was being sold "as is" and he was not planning to take any remedial action to repair or renovate any system within the building prior to its sale. Engineer A performed several structural tests on the building and determined that the building was structurally sound. However, during the course of providing services, the client confided in Engineer A and informed him that the building contained deficiencies in the electrical and mechanical systems, which violated applicable codes and standards. While Engineer A was not an electrical nor mechanical engineer, he did realize those deficiencies could cause injury to the occupants of the building and so informed the client. In his report, Engineer A made a brief mention of his conversation with

the client concerning the deficiencies; however, in view of the terms of the agreement, Engineer A did not report the safety violations to any third party.

In determining that it was not ethical for Engineer A not to report the safety violations to the appropriate public authorities, the Board first noted that the facts presented raised a conflict between two basic ethical obligations of an engineer: (1) the obligation of the engineer to be faithful to the client and not to disclose confidential information concerning the business affairs of a client without that client's consent, and (2) the obligation of the engineer to hold paramount the public health and safety. In its review, the Board noted that NSPE Code Section III.4 can be clearly understood to mean that an engineer has an ethical obligation not to disclose confidential information concerning the business affairs of any present client without the consent of that client. That provision makes no specific exception to the language. For example, the drafters of the NSPE Code could have provided exceptional circumstances, where such confidential information could be disclosed by the engineer; however, no such provisions have been included.

However, after noting the significance of NSPE Code Section III.4, the Board stated: "We believe under the facts, Code Section II.1.c. should be read in conjunction with Code Section II.1.a. The latter section refers to the primary obligation of the engineer to protect the safety, health, property, and welfare of the public. The obligation of the engineer to refrain from revealing confidential information, data, and facts concerning the business affairs of the client without consent of the client is a significant ethical obligation. We further believe that matters of public health and safety must take precedence. The NSPE Code is clear on this point. Code Section I.1. employs the word "paramount" to describe the obligation of the engineer with respect to the public health and safety."

In BER Case No. 88-6, Engineer A was employed as the City Engineer/Director of Public Works. She found that the municipal sewage plant lacks the capacity to handle the waste from several large industrial food processing plants. Engineer A revealed this to her supervisor, the City Administrator, who ordered Engineer A to discuss the problems only with him and warns her that her job was in danger if she disobeyed. She privately brings the problem up to other city officials. Engineer A was notified by the City Administrator that she was removed from responsibility for the entire sanitary system and the chain of command by a letter instructing Technician B that he was to take responsible charge of the sanitary system and report directly to City Administrator.

Although she had already gone beyond her immediate superior by discussing the matter with other city officials and had been relieved of responsibility for the operation, the Board maintained that Engineer A had a further responsibility to report a matter endangering the public safety and health to the proper authorities.

While the Board noted earlier that the NSPE Code makes no direct exception to the language contained in Code Section III.4. as the Board stated on numerous occasions, no section of the NSPE Code should be read in a vacuum or independent of the other provisions of the NSPE Code. Code Section II.1.c. provides additional guidance in this case, making it clear that the Engineer A has an ethical obligation to refrain from disclosing information that she acquires during the course of providing professional services to the client unless first obtaining the client's consent to disclose. Importantly, however, this section also includes a relevant exception that allows the engineer to disclose information acquired during the course of providing professional services to the client if such disclosure is authorized or required by law or by the NSPE Code. In other words, if the engineer has a legal or ethical responsibility to disclose the information in question, the engineer is released from the obligation to maintain confidentiality.

The facts in the present case take a different twist than earlier cases by the Board in this area. In the present case, the communication between the engineer and the engineer’s client is interesting in that it communicates and gives notice to the client of the engineer’s role in reporting violations of the law to such authorities as appropriate. Engineer A’s comments appear to also communicate something important. The implication of Engineer A’s comment appears on its face to be a communication to Engineer A’s client that the client should not make Engineer A privy to unnecessary or inappropriate information that the owner does not want reported. The Board believes Engineer A’s comments are reasonable and accurate. The Board is not convinced that the comment could be understood as constituting a "wink" to the client that if there is information that might involve possible violation, the client should keep it concealed and out of the Engineer A’s view.

While some might not understand such comments as prudent advice, the Board is comfortable with this approach and the atmosphere that such a comment would create in the engineer’s relations with clients. The Board rejects the notion that this type of comment indicates that the engineer is willing to freely associate with businesses that engage in illegal conduct so long as the facts and circumstances of the illegal conduct are not disclosed to the engineer. It is important to note that unlike an attorney or other similar professionals, no legal protection of confidentiality exists between Engineer A and his client. The Board is also not of the opinion that this type of atmosphere would interfere with Engineer A’s ability to serve the best interests of Engineer A’s client or meet all of Engineer A’s obligations under the NSPE Code. In sum, the Board believes the type of atmosphere that would be created by such comments do not in any way diminish the professional integrity of Engineer A or the engineering profession as a whole and would be consistent with the NSPE Code.

Conclusion:

It was ethical for Engineer A to advise the client in the manner described.

EMPLOYEE’S FAILURE TO INFORM EMPLOYER

OF NEW EMPLOYMENT WITH EMPOYER’S VENDOR

Case No. 6

Facts:

Engineer A, a member of NSPE, is employed by the FGH Construction Company and works closely with Engineer B who is an employee of LMN Supplies. LMN Supplies sells construction materials and supplies. Part of Engineer A’s responsibilities are to negotiate and approve bids by LMN Supplies that are submitted by Engineer B. LMN Supplies offers, and Engineer A accepts, an employment position with LMN Supplies. Engineer A submits his resignation and gives two weeks notice to FGH Construction Company and is not asked and does not mention that he will be employed by LMN Supplies. For the next two weeks before leaving FGH Construction Company, Engineer A continues to negotiate and approve bids submitted by LMN Supplies. Question:

Was it ethical for Engineer A to fail to mention to FGH Construction Company that he will be employed by its vendor LMN Supplies? References:

Preamble - Code of Ethics: Engineering is an important and learned profession. As members of this profession, engineers are expected to exhibit the highest standards of honesty and integrity. Engineering has a direct and vital impact on the quality of life for all people. Accordingly, the services provided by engineers require honesty, impartiality, fairness and equity, and must be dedicated to the protection of the public health, safety, and welfare. Engineers must perform under a standard of professional behavior that requires adherence to the highest principles of ethical conduct.

Section II.4.a. - Code of Ethics: Engineers shall disclose all known or potential conflicts of interest which could influence or appear to influence their judgment or the quality of their services.

Section III.3.a. - Code of Ethics: Engineers shall avoid the use of statements containing a material misrepresentation of fact or omitting a material fact.

Discussion:

It is not uncommon when an employee changes positions for conflicts of interest to arise in the performance of the engineer’s professional duties. The subject of conflict of interest has been considered by the NSPE Board of Ethical Review on a number of occasions. For example, BER Case No. 75-10 involved Engineer A who was employed on a full-time basis by a radio broadcast manufacturer as a sales representative. In addition, Engineer A performed consulting engineering services to organizations in the radio broadcast field, including analysis of their technical problems and, when required, recommendation of certain radio broadcast equipment as may be needed. Engineer A’s engineering reports to his client were prepared in form for filing with the appropriate governmental body having jurisdiction over radio broadcast facilities. In some cases, Engineer A’s engineering reports recommended the use of broadcast equipment manufactured by his employer. After reviewing previous BER cases relating to conflicts of interest (see BER Case Nos. 72-9 and 74-4), the Board concluded that Engineer A may ethically provide consulting services as described only if there is full disclosure of all the facts and circumstances to his client. In reaching its conclusion, the Board noted that it would have been preferable if the client could rely on the technical judgment and recommendations of an engineer without any financial interests in the equipment of any manufacturer, but it is understood that under some circumstances, the client may wish to retain the services of an engineer with an apparent conflict of interest. In the later instance, the client must have full knowledge of all the circumstances -- otherwise the client has been defrauded. The departure of an employee to an allied company can raise ethical concerns as can the situation when an employee moves over to a competing company. Although on the surface, the departure of the employee might provide both companies with benefits by allowing the two companies to strengthen their relationship and enhance communications between the two companies, there are also conflicts that can arise in the arrangement. The facts in this case identify a clear conflict, or at least the appearance of a potential conflict, faced by the employee involved in the transition.

Under the facts, Engineer A’s primary obligation was to FGH Construction and not to LMN Supplies during the two-week period prior to his departure to LMN Supplies. Engineer A had a basic obligation to not do anything that would unduly prejudice the interests of either FGH Construction or LMN Supplies. However, by failing to provide full disclosure to FGH Construction, Engineer A’s actions have the effect of prejudicing the interests of both FGH Construction and LMN Supplies.

By not informing FGH Construction, Engineer A’s actions will most probably raise some doubt in the minds of the supervisors and perhaps owners of FGH Construction about whether Engineer A’s continued negotiation and approval of bids submitted by LMN Supplies were somehow tainted and could have resulted in inflated costs to FGH Construction or other unearned competitive advantages for the benefit of Engineer A’s new employer, LMN Supplies. Also by failing to disclose the material conflict that exists concerning his new employment with LMN Supplies, Engineer A may have unwittingly planted "seeds of doubt" with FGH Construction and potentially damaged the goodwill that might have existed between FGH Construction and LMN Supplies. Based upon the facts as presented, FGH Construction might wrongly conclude that LMN Supplies somehow persuaded Engineer A not to disclose his new position with LMN Supplies during the two-week period in order to gain some advantages. Engineer A’s failure to fully disclose his new position with LMN Supplies, and to continue to negotiate and approve LMN Supplies’ bids to his current employer, was not in accordance with the spirit or the intent of the NSPE Code. His actions want for the highest standards of honesty and integrity expected of engineers, and were not circumspect.

Conclusion:

It was not ethical for Engineer A to fail to mention to FGH Construction Company that he will be employed by its vendor LMN Supplies.

EMPLOYMENT PRACTICES –

SOLICITING COMPETITOR’S EMPLOYEES

Case No. 5 Facts:

Engineer A’s firm is attempting to increase its staff capacity and after publishing a series of advertisements in local and national job classified publications, decides to send out recruitment postcards to engineers in the local and state engineering community. Using the state board registry of professional engineers, the firm sends the unsolicited postcards out to individual engineers at the address listed in the directory announcing Engineer A’s firm’s interest in recruiting new engineer employees. Such mailings are not prohibited by the state board. Many of the cards are sent to the individual engineers at their firm’s address. Question:

Was it ethical for Engineer A’s firm to send postcards out to individual engineers in the manner described?

References: Section III.3. - Code of Ethics: Engineers shall avoid all conduct or practice which deceives the public.

Section III.3.a. - Code of Ethics: Engineers shall avoid the use of statements containing a material misrepresentation of fact or omitting a material fact.

Section III.3.b. - Code of Ethics: Consistent with the foregoing, Engineers may advertise for recruitment of personnel.

Section III.7. - Code of Ethics: Engineers shall not attempt to injure, maliciously or falsely, directly or indirectly, the professional reputation, prospects, practice or employment of other engineers. Engineers who believe others are guilty of not ethical or illegal practice shall present such information to the proper authority for action.

Discussion:

In today’s employment environment, with employers of engineers scrambling to maintain a competent workforce, many employers are attempting more aggressive employment recruitment and retention approaches. As has been noted on numerous occasions, it appears that in times of heightened competition, whether for engineering services or for engineering employees, sometimes ethical considerations are minimized and even lost as firms attempt to do what is necessary to stay in business and prosper. However, failing to maintain reasonable standards of ethical conduct ultimately reflects poorly both on engineers who engage in such conduct, and also on the engineering profession as a whole.

The Board of Ethical Review has considered the issue of employment recruitment on numerous occasions. As early as BER Case No. 60-4, the Board noted that it was ethically proper for an engineer to discuss employment with another company, regardless of whether his company and the company are competitors, and to take such employment if in his professional interest. BER Case No. 60-4 involved a number of companies that required engineers for the design and development of their products and found it difficult in recent years to recruit a sufficient number of qualified engineers. As one means of contacting engineers interested in their type of work, these companies individually maintained temporary recruiting facilities in connection with various industrial exhibitions and meetings of professional and technical societies to interview those engineers in attendance who might be seeking employment or a change of employment.

Later in BER Case No. 68-4, Engineering Firm A sent to all engineers in Engineering Firm B a form letter reciting the history and policies of Firm A

concluding with a statement, "We enclose for your consideration a summary of the aims and objectives of our firm, as well as the various advantages offered those who join us. We hope you will read it and perhaps refer to us those individuals whose professional philosophy matches our own." The enclosure referred to a 20-page booklet covering the history, aims, benefits, and rules of Firm A. In reviewing the NSPE Code and the facts, the Board concluded that the recruitment of engineering personnel through this method was ethical. In reaching its result, the Board suggested that this type of direct unsolicited contact with large numbers or employees of other firms who have not indicated any interest or desire to change employment is not in keeping with desirable professional standards and the proper relationship between firms within the profession.

Over the past decades, the culture of employment has changed from steady progression within a single company or firm to one where young engineers must plan on a substantial number of employment changes in the course of their careers. Employers, in an age of increasing competition, increasingly rely on relatively short term hiring of professionals to meet changing market demands. Free and open communication of available positions is critical in meeting today’s market demands.

Reflecting this changing culture, since the 1970s, the Code has placed increasingly less emphasis on the style and methods of recruitment while steadfastly maintaining standards of integrity of recruitment statements. The facts in this case do not include any improprieties in the contents of the postcards. Instead, they center upon the method of distribution to prospective clients. Nevertheless the method used does raise at least two potential problems. By sending out a mass unsolicited mailing to an engineering licensure board list of professional engineers in the state, Engineer A would invariably be sending the solicitation in at least some cases to the business addresses of those professional engineers. The Board does not believe this type of solicitation crosses the line and employer should be expected to accept incoming correspondence from competing firms soliciting its employees for positions with that competing firm. Using company resources and time to process such material is a minor inconvenience which any employer can be expected to tolerate. This is much different than situations where employees use equipment, supplies, laboratory, or other office facilities of an employer to carry on an outside business. The Board does not believe the actions by Engineer A’s firm rises to the level which allows the employer’s place of business to be used as a "staging ground" for the "raiding" of its employees.

By sending unsolicited letters to firms of various sizes, Engineer A’s actions might have the unintended effect of causing unknowing employers in firms receiving the letters to conclude, without more information, that their employees are soliciting information or actively seeking employment elsewhere and doing so on company time. This could have the effect of straining relations within the firm

and cause misunderstanding and mistrust within the firm. However, the Board does not believe this issue rises to an ethical violation. Conclusion:

It was ethical for Engineer A’s firm to send postcards out to individual engineers in the manner described.

PROVIDING DESIGN TO CLIENT’S COMPETITOR

Case No. 4

Facts:

Engineer A is hired by Developer X to perform design and construction-phase services for a subdivision for Developer X. Per the agreement with Developer X, Engineer A is paid 30% of his fee by Developer X. Engineer A submits the design drawings and plans to the county authorities and permits are issued for the benefit of Developer X. Developer X cannot get financing for the project, and Developer X tells Engineer A that Engineer A should not disclose the contents of the drawings and plans to any unauthorized third party. Developer Y, a client of Engineer A and also a business competitor of Developer X, is interested in the subdivision project. Developer Y has secured financing for the project and approaches Engineer A, requesting that he perform the design on the project and requests that Engineer A provide the design documents for Developer Y’s review. Since Engineer A was not paid his entire fee for his completed project design by Developer X, Engineer A agrees to provide the design drawings and plans to Developer Y and agrees to charge Developer Y only for the changes to the original subdivision design drawings and plans.

Questions:

1. Was it ethical for Engineer A to provide a copy of the design drawings and plans to Developer Y?

2. Was it ethical for Engineer A to charge Developer Y for the changes to the original subdivision design drawings and plans?

References:

Section II.1.c. - Code of Ethics: Engineers shall not reveal facts, data or information without the prior consent of the client or employer except as authorized or required by law or this Code.

Section II.4. - Code of Ethics: Engineers shall act for each employer or client as faithful agents or trustees.

Section II.4.b. - Code of Ethics: Engineers shall not accept compensation, financial or otherwise, from more than one party for services on the same project, or for services pertaining to the same project, unless the circumstances are fully disclosed and agreed to by all interested parties.

Section III.4.a. - Code of Ethics: Engineers shall not, without the consent of all interested parties, promote or arrange for new employment or practice in connection with a specific project for which the Engineer has gained particular and specialized knowledge. Discussion:

The facts in this case raise a conflict between the obligations of an engineer not to disclose information that is considered confidential by the client and the right to be properly compensated for professional services.

Among the issues left unclear under the facts in this case is any indication of whether Engineer A and Developer X ever had a specific agreement that addressed the issue of ownership of the engineering drawings, plans, and specifications, and whether ownership and possession of those documents remains with the engineer, particularly where the owner fails to completely compensate the engineer for those documents.

In Case 67-3, Engineer X was retained by a municipality to prepare plans and specifications for a comprehensive sanitary sewer program. After approximately 80% of the total project was constructed in subsequent years, Engineer X's contract was terminated and he was paid in full for his services. Ten years later, the municipality retained another engineer to revise and update the plans and specifications prepared by Engineer X. The municipality requested Engineer X to provide it with originals or copies of the plans and specification which Engineer X had in his possession, offering to pay Engineer X the cost of reproduction. Engineer X refused to comply with the request. The original contract was silent as to ownership of the plans and specifications, but did contain a clause stating that: "If the City requires more than six complete sets of final plans, specifications and documents, the Engineers agree to provide any number of additional copies for no more that blueprinting, mimeographing and mailing costs." In finding that Engineer X was ethically obligated to provide the originals or copies of the plans to the municipality, the Board noted that as a general rule in the absence of a contract provision on ownership of plans, the plans and contract documents are the property of the client.

The Client’s ownership of plans in the absence of contrary contract provisions was reaffirmed in Case 88-4, where Engineer A was retained by an architect to provide mechanical engineering services in connection with the design of a small office building. Engineer A performed her services, but payment remained in dispute. Subsequently Engineer A refused to provide the owner a record set of

plans despite his offer to pay reproduction costs and mediate the dispute. The Board confirmed that the plans were the property of the developer. However they maintained that the owner had the status of a client and that: "It was unethical for Engineer A to refuse to provide the owner with the drawings and to decline owner's offer to attempt to mediate the dispute between Engineer A and the architect."

The obligation of engineers under II.1.c. to "…not reveal facts, data or information without the prior consent of the client.." was the subject of Case 82-2 where "an engineering consultant performed home inspection services for a prospective purchaser of a residence and thereafter disclosed the contents of the report to the real estate firm handling the sale of the residence without the client’s consent. The Board reaffirmed the principle of the right of confidentiality on behalf of the client in ruling that the engineer acted unethically.

Although Engineer A may have had some basis for thinking that he was not fully obligated to Developer X, since Developer X only compensated Engineer A for 30% of his professional and other services, we believe that Engineer A’s consideration of this issue was at least affected by his ongoing client relationship with Developer Y, a party with whom Engineer A may have felt a sense of loyalty. However, in view of the fact that Developer Y was a competitor of Developer X, Developer X would certainly be justified in believing that Engineer A’s actions were in conflict with Engineer A’s obligations to Developer X.

While it is true that Engineer A was entitled to full compensation for his design services for Developer X, that alone was not justification for Engineer A to provide the reviewed and approved design drawings to Developer Y. Weighing all of the facts, it is clear to the Board that the fee dispute and Engineer A providing the design drawings to Developer Y are separate and distinct issues that should not have been linked in Engineer A’s decision to provide the plans to Developer Y.

It is clear from all of the Code references cited that, without Developer X’s consent, Engineer A should not share the plans with another client. The Code is silent about failure of clients to provide agreed compensation and how that would affect their status as clients.

It is the Board’s view that before providing the plans to a third party, Engineer A should have made every reasonable effort to resolve his situation with Developer X. In those negotiations, Engineer A could link a settlement of the issue of his fee on the project and consent to use the project plans for other clients.

Given the conclusion that Engineer A should not have taken the action of providing the project drawings to Developer Y, the Board concludes that Engineer A should not have charged Developer Y for the changes made to the drawings. At the same time, the Board notes that had Engineer A been able to

negotiate an agreement with Developer X under which Engineer A would be able transfer rights of use to Developer Y, the Board would not be troubled by Engineer A charging Developer Y for the changes made to the project drawings. Presumably, those changes would involve time and effort on the part of Engineer A for which he would be entitled to compensation by Developer Y.

Conclusions:

1. It was not ethical for Engineer A to provide a copy of the design drawings and plans to Developer Y.

2. It was not ethical for Engineer A to charge Developer Y for the changes to the original subdivision design drawings and plans. However, had Engineer A successfully negotiated an agreement with Developer X on the questions of ownership and possession of the design drawings, it would have been ethical for Engineer A to charge Developer Y for changes to the original subdivision design drawings and plans.

EMPLOYMENT – FAILURE TO DISCLOSE DETAILS OF OUTSIDE BUSINESS

Case No. 3 Facts:

Engineer A is employed by Company X and as part of her job, Engineer A organizes continuing education seminars (i.e., contacting speakers, making meeting arrangements, etc.) for Company X. Company Y, a company that competes for business with Company X, is aware of Engineer A’s track record in organizing effective and well-received continuing education seminars and requests that Engineer A organize a continuing education seminar for Company Y’s architects, engineers, and surveyors, whereby Company Y would pay Engineer A for such services. Engineer A agrees to provide the services to Company Y. Engineer A tells her supervisor about establishing the continuing education business but does not mention that the services will be provided to Company Y, a competitor of Company X. Her employer, Company X, does not object. Question:

Was it ethical for Engineer A to agree to provide continuing education seminar services to Company Y? References:

Section II.4. - Code of Ethics: Engineers shall act for each employer or client as faithful agents or trustees.

Section III.1.c. - Code of Ethics: Engineers shall not accept outside employment to the detriment of their regular work or interest. Before accepting any outside engineering employment, they will notify their employers.

Section III.3.a. - Code of Ethics: Engineers shall avoid the use of statements containing a material misrepresentation of fact or omitting a material fact.

Section III.6.b. - Code of Ethics: Engineers in salaried positions shall accept part- time engineering work only to the extent consistent with policies of the employer and in accordance with ethical considerations.

Discussion:

The question of an employee accepting outside employment to the detriment of an employer has not directly confronted the Board of Ethical Review. The most recent case involving similar facts was BER Case No. 97-1. There, Engineer A was a licensed professional engineer and land surveyor in State A. Engineer A was associated with a firm, XYZ Engineering and Surveying (which offers professional engineering and surveying), as the licensed professional engineer in charge under the state’s certificate of authorization requirement. The firm had not performed any work outside of State A. Engineer A’s understanding of the law of State A was that a licensed professional engineer is to be in "responsible charge" of engineering and a person licensed as a professional land surveyor is to be in "responsible charge" of land surveying. These persons in responsible charge could be a principal of the firm or an employee of the firm under the state’s laws. The agreement Engineer A has with XYZ Engineering and Surveying was that XYZ grants Engineer A 10% share of the stock in the firm as compensation for his engineering services and 5% of the gross billings for engineering work for which the seal of a licensed engineer in responsible charge of engineering was required. This agreement was contingent on the understanding that if any one of the three principals of XYZ Engineering and Surveying becomes licensed as a professional engineer in State A, the agreement would become void and the 10% stock would be returned to XYZ Engineering and Surveying. In addition to working with XYZ, Engineer A had a full-time engineering position for a state governmental agency. This work required no engineering license. Engineer A worked 35 hours per week on a flex-time basis and provided about 20 hours per week supervising engineering services at the firm, plus an additional 12 hours of work on the weekends. Engineer A did not normally go into the field for XYZ Engineering and Surveying but was available for consultation, 24 hours a day. In concluding that it was ethical for Engineer A to function in both capacities, the Board noted that both the state governmental agency and the engineering firm were aware of Engineer A’s activities as a dual employee and did not object to these activities. However, the Board noted that should a conflict of interest arise (e.g., where Engineer A or the firm’s activities conflict with the governmental employer’s activities or interests) Engineer A will need to carefully address those

activities consistent with NSPE Code Sections III.6.b., II.4.d., II.4.e., and other applicable provisions of the NSPE Code.

There is clearly merit in having engineers work to promote and expand engineering education opportunities for engineers and other design professionals. With the increasing interest in continuing professional competency, life-long learning, and other educational programs, there will undoubtedly be a great need for knowledgeable and experienced engineers and others to provide services for the benefit of the engineering profession. Certainly the efforts of engineers such as Engineer A should generally be encouraged in order to meet the needs of all elements of the engineering profession.

At the same time, the Board is somewhat concerned about aspects of and the manner in which Engineer A pursued her activities in this area. The NSPE Code makes clear that before accepting outside employment, an engineer has an obligation to notify the engineer’s employer. This was an important aspect in the Board reaching its decision in Case No. 97-2. This obligation is intended, among other reasons, to permit the employer to evaluate whether the added burden of outside employment will have adverse consequences on the engineer’s ability to perform her employment on the employer’s behalf, but it is also intended to allow the employer the opportunity to assess whether the employee’s outside employment will be in conflict or adverse to the interests of the employer.

While it is true that under the facts, Engineer A did notify her employer that fact that she was establishing a continuing education business, Engineer A failed to fully disclose that she would be working for the benefit of a competitor of her employer. Her failure to provide this critical information did not permit her employer with the opportunity to make an informed decision concerning her outside employment. In passing, the Board would note that Engineer A’s firm, Company X, will most probably learn that Engineer A is providing services to Company Y and in view of her failure to inform Company X, of this fact when informing the company of her decision to establish a continuing education business, the consequences to Engineer A may be severe.

Over time, the NSPE Code and the Board of Ethical Review have moderated to the point of recognizing that certain types of conflicts of interest are difficult, if not impossible, to avoid and that the more realistic approach for individual engineers faced with this type of ethical conflict is to fully disclose the nature and extent of the conflict to the appropriate parties involved or impacted by the conflict. This is based upon the view that the parties that are most affected by the conflict and who have the most at stake (e.g., clients, employers, other engineering firms, etc.) are in the best position to determine whether their interests will be compromised by the conflict. While sometimes perceived conflicts of interest are resolved by the parties as a result of full disclosure, in other instances, the conflicts are deeper and require the engineer to disassociate from a specific project.

The Board was not certain of all of the facts and details involved in Engineer A’s decision not to inform her employer of her relationship with Company Y. It may have been as simple as the fact that Engineer A believed that Company X would have objected to this relationship and Engineer A, therefore, decided not to fully disclose this fact to Company X since she wanted to pursue the opportunity. Or, Engineer A might have had plans to depart from Company X and establish her own business and decided to let her ties to Company X gradually diminish. Whatever her motivation, the Board believes that her actions were not consistent with the NSPE Code. Conclusion:

It was not ethical for Engineer A to agree to provide continuing education seminar services to the competing Company Y without the knowledge and

consent of her employer.

CONFLICT OF INTEREST –

FAILURE TO DISCLOSE OTHER BUSINESS INTEREST

Case No. 2

Facts:

Engineer A, a mining engineer, is retained by a company that owns land upon which coal mines are located. Engineer A provides engineering services and surveys to determine the location of coal veins in the mine, assigns coal contractors to the locations in the mine, and performs other engineering services as required.

Engineer A also owns a laboratory that evaluates the quality of coal mined by coal contractors that contract with the coal mine owner. The quality and cost of mining the coal may vary. Although Engineer A mentioned that he owns a laboratory, Engineer A never informs the coal mine owner about the size and the extent of his laboratory, which is substantial and employs several other engineers and technicians, nor about his clients who are mining the owner’s coal.

Question:

Was it ethical for Engineer A to not fully disclose the size and extent of his laboratory and his clients to the coal mine owner?

References:

Section II.4.a. - Code of Ethics: Engineers shall disclose all known or potential conflicts of interest which could influence or appear to influence their judgment or the quality of their services.

Section III.3.a. - Code of Ethics: Engineers shall avoid the use of statements containing a material misrepresentation of fact or omitting a material fact.

Discussion:

Conflicts of interest are among the most prevalent ethical concerns facing engineering practitioners. Over the years, the Board of Ethical Review has considered numerous cases dealing with the multifaceted issues involved in situations where engineers are faced with conflicts involving clients, employees, or other engineers. At one time, the NSPE Code specifically prohibited engineers from becoming involved in cases or situations where a conflict of interest was present. This was based upon the view that professional engineers must at all times be above reproach and avoid any situation that could be perceived as compromising their professional judgment and integrity as independent professionals. (See BER Case Nos. 59-3, 60-5, 62-7, and 63-5 for examples of cases where the Board expressed the view that engineers had a strict obligation to avoid conflicts of interest).

In recent years, the Board has considered the issue of conflicts of interest in various contexts. In BER Case No. 76-3, an engineer principal under retainer for many years with a county for services on a water project was then retained by a developer with the approval of county officials. The developer filed a petition with the county zoning board to rezone a substantial area of the county for commercial purposes.

The county department of public works filed several engineering reports adverse to the zoning petition recommending denial of the rezoning because the proposed construction would overload available water and sewer facilities. The development company called the engineer as an expert witness at the zoning hearing. The engineer testified in support of the rezoning petition.

In concluding that the engineer was not ethical in appearing for the development company while serving as engineering consultant to the county, the Board noted that when the engineer was approached by the developer, while still on retainer to the county, it should have been quite clear to him that a conflict of interest was inevitable. "It would seem," said the Board, "that a little interrogation of the development company concerning its plans would have revealed the conflict of interest." The Board went further, stating that "it would be incorrect to accept the engineer's role as an expert witness in the ordinary sense of that kind of professional service arrangement." "The engineer," continued the Board, "was doing more than offering his expertise in engineering matters as an aid to a fuller understanding by the zoning board -- he was in fact a paid advocate of a private interest in open conflict with the engineering opinions of the county engineers."

In BER Case No. 82-6, an engineer was retained by the U.S. Government to study the causes of a dam failure. Later, the engineer was retained by the contractor on the dam project who had filed a claim against the U.S. Government for additional compensation. In concluding that it was not ethical for the engineer to be retained as an expert witness for the contractor under these circumstances, the Board noted that the facts were similar to those in BER Case No. 76-3, with one exception. In BER Case No. 82-6, the engineer was paid in full for his services to the government and was free to oppose its position on behalf of an adverse party, while in BER Case No. 76-3, the engineer had an ongoing contractual relationship with the county client. However, we noted that since rendering the opinion in BER Case No. 76-3, the language in the NSPE Code had become more restrictive and therefore prohibited the engineer's actions in BER Case No. 82-6 because the engineer had failed to obtain the consent of his former client before serving as an expert on behalf of the contractor.

Finally, in BER Case No. 85-4, a forensic engineer was hired as a consultant by an attorney to provide an engineering and safety analysis report and courtroom testimony in support of a plaintiff in a personal injury case. Following the engineer's review and analysis, the engineer determined that he could not provide an analysis favorable to the plaintiff because the results of the report would have to suggest that the plaintiff and not the defendant was at fault in the case. After the engineer's services were terminated and his fee paid in full, an attorney representing the defendant in the case sought to retain the engineer to provide an independent and separate engineering and safety analysis report. The engineer agreed to provide the report.

In concluding that it was not ethical for the engineer to agree to provide a separate engineering and safety analysis report, the Board noted that the mere fact that the engineer ceased performing services for the first attorney would not be an adequate solution to the ethical dilemma at hand. The Board stated that the engineer, throughout his first analysis, had access to information, documents, etc. that were made available to him by the attorney in a cooperative and mutually beneficial manner. The Board rejected the proposition that following the termination of a relationship with the attorney, the engineer would "blot out" all of that information from his mind and start from "square one" in performing his engineering and safety analysis report. The Board commented that, in their view, the real reason for the attorney's hiring of the engineer was his belief that the engineer would provide a report that would be favorable.

Most of the cases cited herein are clear-cut examples of conflicts of interest and suggest circumstances in which the engineer's judgment could be compromised and the quality of the engineer's services may be affected. At the very least, these examples raise the appearance of a conflict of interest.

Under the facts there is nothing that would prevent an engineer from operating two separate businesses per se. The Board, however, is concerned about the appearance and the relationship between Engineer A’s mining engineering consulting practice and his laboratory practice. A potential conflict of interest could appear to influence the quality of his services.

Under the facts, among the responsibilities and obligations the mine owner has given to Engineer A, is the assignment of coal veins to contractors who are then responsible for performing the coal mining operation. While the assignment of coal veins to the mining contractors by the engineer is dependent upon identifiable factors such as the competencies of the contractors and their experience, the engineer will exercise independent judgment and discretion. In view of Engineer A’s independent laboratory practice, Engineer A could be accused by contractors or even by the owner of basing his decision to assign higher quality coal veins upon unrelated factors such as whether the mining contractor uses Engineer A’s laboratory or whether the mining contractor is a better customer in Engineer A’s laboratory than other mining contractors.

In view of these factors, the Board believes Engineer A had an obligation to fully disclose the nature and extent of his laboratory practice to the mine owner in order for the mine owner to fully understand the implications of the relationship between the two activities. The mine owner’s business practices could be called into question by virtue of unknowingly permitting Engineer A to engage in such activities in connection with his mines. Therefore, Engineer A should have been much more forthcoming with the information. The Board believes having not provided the information is a violation of the NSPE Code.

Conclusion:

It was not ethical for Engineer A to not fully disclose the size and extent of his laboratory and his clients to the coal mine owner.

DUTY TO REPORT UNSAFE CONDITIONS/

CLIENT REQUEST FOR SECRECY

Case No. 9

Facts:

Engineer A, a structural designer of a large commercial building, incorporates new and innovative design concepts. After construction is complete and the building is occupied, he finds an omission in his calculations that could result in its collapse under severe, but not unusual wind conditions. The collapse would not only jeopardize the occupants and their immediate surroundings but could possibly cause a "domino" effect threatening a much larger area.

Engineer A advises the architect and client of the problem. After consultation with the architect, the client, and the city engineer, all agree upon remedial construction, which can be accomplished over the next few months. A storm monitoring system and contingency evacuation plan for the building and surrounding neighborhood are developed for the time before construction is complete.

Both the client and architect strongly agree that the situation should be kept secret, with construction accomplished during the evening hours when the building is unoccupied. Engineer A is confident that the construction will completely rectify any structural concerns and that the evacuation plan has a reasonable chance of success.

Engineer B, the city engineer, has concern for the public, especially the office workers in the building and their right to know, but the architect and the client maintain that right is superseded by the consequences of a possible public panic resulting from any notification.

Questions:

1. Is it ethical for Engineer A, the structural engineer, to comply with the client's and the architect's desire for secrecy?

2. Is it ethical for Engineer B, the city engineer, to maintain the secrecy?

References:

Section I.1. - Code of Ethics: Engineers, in the fulfillment of their professional duties, shall hold paramount the safety, health and welfare of the public.

Section II.1.a. - Code of Ethics: Engineers shall hold paramount the safety, health and welfare of the public. If engineers’ judgment is overruled under circumstances that endanger life or property, they shall notify their employer or client and such other authority as may be appropriate.

Section II.1.c. - Code of Ethics: Engineers shall not reveal facts, data or information without the prior consent of the client or employer except as authorized or required by law or this Code.

Section II.4. - Code of Ethics: Engineers shall act for each employer or client as faithful agents or trustees.

Section III.4. - Code of Ethics: Engineers shall not disclose, without consent, confidential information concerning the business affairs or technical processes of any present or former client or employer, or public body on which they serve.

Discussion:

The Board has interpreted the language contained in Sections II.4. and III.4. in the context of the obligations of employed engineers to maintain the confidences of their employer particularly with regard to certain confidential information that might be made available to the engineer during the course of employment, as in Case 61-8. However, more recently, the Board has also interpreted this language in the context of the relationships owed by the engineer in private practice to the client and the public.

The facts in this case are somewhat similar to those presented in Case 89-7. In that case, Engineer A was retained to investigate the structural integrity of a 60-year old occupied apartment building, which his client is planning to sell. Under the terms of the agreement with the client, the structural report written by Engineer A was to remain confidential. In addition, the client made it clear to Engineer A that the building was being sold "as is" and he was not planning to take any remedial action to repair or renovate any system within the building prior to its sale. Engineer A performed several structural tests on the building and determined that the building was structurally sound. However, during the course of providing services, the client confided in Engineer A and informed him that the building contained deficiencies in the electrical and mechanical systems, which violated applicable codes and standards. While Engineer A was not an electrical nor mechanical engineer, he did realize those deficiencies could cause injury to the occupants of the building and so informed the client. In his report, Engineer A made a brief mention of his conversation with the client concerning the deficiencies; however, in view of the terms of the agreement, Engineer A did not report the safety violations to any third party.

In determining that it was unethical for Engineer A not to report the safety violations to the appropriate public authorities, the Board of Ethical Review first noted that the facts presented raised a conflict between two basic ethical obligations of an engineer: The obligation of the engineer to be faithful to the client and not to disclose confidential information concerning the business affairs of a client without that client's consent, and the obligation of the engineer to hold paramount the public health and safety. In its review, the Board noted that Code Section III.4 can be clearly understood to mean that an engineer has an ethical obligation not to disclose confidential information concerning the business affairs of any present client without the consent of that client. That provision makes no specific exception to the language. For example, the drafters of the Code could have provided exceptional circumstances, where such confidential information could be disclosed by the engineer; however, no such provisions have been included.

However, after noting the significance of III.4, the Board stated: "We believe under the facts, Section II.1.c. should be read in conjunction with Section II.1.a. The latter section refers to the primary obligation of the engineer to protect the safety, health, property and welfare of the public. The obligation of the engineer to refrain from revealing confidential information, data, facts concerning the business affairs of the client without consent of the client is a significant ethical obligation. We further believe that matters of public health and safety must take precedence. The NSPE Code of Ethics is clear on this point. Section I.1. employs the word ‘paramount’ to describe the obligation of the engineer with respect to the public health and safety."

"We believe Engineer A could have taken other steps to address the situation, not the least of which was his paramount professional obligation to notify the appropriate authority if his professional judgment is overruled under circumstances where the safety of the public is endangered. Instead, Engineer A, like the engineer in BER Case 84-5, 'went along' and proceeded with the work on behalf of the client. In that case, the engineer recommended to a client that a full-time, on-site project representative be hired for the project because of the potentially dangerous nature of implementing the design during the construction phase. When the client indicated to the engineer that the project would be too costly if such a representative were hired, the engineer acceded to the client's wishes and proceeded with the work. This was not ethical under the NSPE code.”

In Case 88-6, Engineer A is employed as the City Engineer/Director of Public Works. She finds that the municipal sewage plant lacks the capacity to handle the waste from several large industrial food processing plants. Engineer A reveals this to her supervisor, the City Administrator, who orders Engineer A to discuss the

problems only with him and warns her that her job is in danger if she disobeys. She privately brings the problem up to other city officials. Engineer A is notified by the Administrator that she is removed from responsibility for the entire sanitary system and the chain of command by a letter instructing Technician B that he is to take responsible charge of the sanitary system and report directly to City Administrator.

While the Board noted earlier that the Code makes no direct exception to the language contained in Section III.4., as we have stated on numerous occasions, no section of the Code should be read in a vacuum or independent of the other provisions of the Code. Section II.1.c. provides additional guidance in this case making it clear that the Engineer A has an ethical obligation to refrain from disclosing information which she acquires during the course of providing professional services to the client unless first obtaining the client's consent to disclose. Importantly, however, this section also includes a relevant exception that allows the engineer to disclose information acquired during the course of providing professional services to the client if such disclosure is authorized or required by law or by the Code. In other words, if the engineer has a legal or ethical responsibility to disclose the information in question, the engineer is released from the obligation to maintain confidentiality.

Much of the same reasoning applies in the present case. Under the reasoning of BER Case 88-6, the engineer had an obligation to go further. As earlier stated, we believe under the facts, Section II.1.c. should be read in conjunction with Section II.1.a. The latter section refers to the primary obligation of the engineer to protect the safety, health, property and welfare of the public. The obligation of the engineer to refrain from revealing confidential information, data, facts concerning the business affairs of the client without consent of the client is a significant ethical obligation. We further believe that matters of public health and safety must take precedence. Again, the Code of Ethics is clear on this point -- Section I.1. employs the word "paramount" to describe the obligation of the engineer with respect to the public health and safety.

Engineer A’s actions in promptly reporting his findings to the client and providing a corrective design were both ethical and commendable. Nevertheless, the necessary repairs require months before the building’s stability could be ensured. During that time, the building’s occupants along with a large area of the city, remained in jeopardy, with only an untested evacuation plan protecting them from possible disaster.

The desire to avoid public panic is certainly a legitimate factor in deciding upon a course of action. However, withholding critical information from thousands of individuals whose safety is compromised over a significant period of time is not a valid alternative for the conditions presented.

It would seem that Engineer A should have informed the client and the architect that, while he has an obligation of confidentiality to them as clients, he has this ultimate, paramount obligation to see that the public is protected. He should have let them know that he must inform the appropriate authorities unless they immediately develop and carry out a plan to do so. Such a plan, developed in consultation with a public relations firm and legal advice, could have avoided panic and sensational media hype, while protecting the public.”

The argument can be made that the Engineer B, the city engineer, could be considered an “appropriate authority.” However, given the magnitude of the situation, it was incumbent for Engineer A, as well as Engineer B, to vigorously advocate actions necessary for public protection and notification to higher authorities. By not doing so, both engineers failed to hold paramount the obligation for public safety.

Engineer A could have taken other steps to address the situation, not the least of which was his paramount professional obligation to notify the appropriate authority if his professional judgment is overruled under circumstances where the safety of the public is endangered. This responsibility is outlined in Code Section II.1.e. Instead, Engineer A "went along" and proceeded with the work on behalf of the client. His conduct cannot be condoned under the Code.

Conclusions:

1. It was not ethical for the structural engineer to comply with the client's and the architect's desire for secrecy.

2. It was not ethical for the Engineer B, the city engineer, to maintain the secrecy.