In Class Cases & Verdicts

Case 97-10
Payment of Referral Fee For Being Selected By Engineer

Code Citations: [II.2.c] [II.5.b] [III.5.b]
Case Citations: [86-1] [92-3]
Facts:
Engineer A is a licensed professional engineer and owner of a corporation providing
engineering services under the laws of the engineer's state. The engineering
corporation performs building inspection services for a variety of clients in the public
and private sector. The services provided by the engineering corporation generally
include the coordination of engineering services involving more than one engineering
specialty.
Engineer A is asked by a client to coordinate multidisciplinary services to be provided
by several engineering firms. Engineer A proposes to bill the client for the
coordination services and Engineer A will also charge each of the engineering firms a
"referral fee" for selecting the firms on behalf of the client. Engineer A's coordination
and referral charges will be outlined in his agreements with the client and the
engineering firms. The agreements will also assign professional liability insurance
responsibility to the specific engineering firm providing the services. Engineer A is
not providing any services directly to the other engineering firms other than the
opportunity to perform the services for the client under the coordination of Engineer
A.
Question:
Was it ethical for Engineer A to charge the other engineering firms a "referral fee"
under the circumstances described?
References:
Code II.2.c
Engineers may accept assignments and assume responsibility for coordination
of an entire project and sign and seal the engineering documents for the entire
project, provided that each technical segment is signed and sealed only by the
qualified engineers who prepared the segment.
Code II.5.b
Engineers shall not offer, give, solicit or receive, either directly or indirectly,
any contribution to influence the award of a contract by public authority, or
which may be reasonably construed by the public as having the effect or intent
of influencing the awarding of a contract. They shall not offer any gift, or other
valuable consideration in order to secure work. They shall not pay a
commission, percentage or brokerage fee in order to secure work, except to a
bona fide employee or bona fide established commercial or marketing agencies
retained by them.
Code III.5.b
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:
Engineers provide a multitude of professional services and in a variety of ways. In
addition to their vast technical expertise, professional engineers are frequently called
upon by their clients to offer project management, construction management, and
other coordination and scheduling services as part of the design, renovation, and
maintenance of constructed facilities (see Code II.2.c.). The education and experience
of engineers make them uniquely qualified to perform these and other services for the
benefit of their clients. However, it is important to distinguish the arrangements for
the coordination of professional and other services for the benefit of a client and
arrangements made between the engineering firm and the firms selected to perform
the services being coordinated by the engineer.
The subject of a "referral fee" has been considered by the Board on other occasions. In
BER Case No. 86-1, the Board considered two separate factual situations involving
the solicitation of work by a business consortium consisting of an engineering firm,
architectural firm, construction firm, and financial firm. In one case, to defray
consortium expenses for promotion, publicity, overhead, etc., each firm was required
to pay to the consortium an entrance fee plus a percentage of income derived from
business successfully generated from referrals by other consortium members. In the
other case, each firm was required to pay the entrance fee plus a referral fee directly to
the consortium firm member which "found" the new business client. In finding the
first arrangement to be proper but the second improper, the Board noted that both
consortiums were being formed primarily for marketing purposes and represent, in
effect, a "pooling" of individual firm marketing capabilities and efforts through an
umbrella approach. In this sense, the consortium is quite similar to the joint ventures
where one firm learns of a potential project and forms liaisons with other firms having
expertise complementary to the others. Marketing efforts are combined to secure the
business and fee arrangements are agreed to by all joint venture participants. The first
consortium represented a relatively unique approach to marketing. The second
consortium involved a referral fee, a portion of which was exchanged between
consortium firm members, which constituted a payment for valuable consideration in
order to secure work, prohibited by Code II.5.b.
Later, in BER Case No. 92-3, Engineer A, who performed building inspection
services, was contacted by IJK, Inc., a firm that referred companies to professional
engineers that perform building inspection services. IJK, Inc. and similar companies
were involved in assisting relocating employees in the sale and purchase of
residences. Typically IJK, Inc. made contact with the client, took an order for a job,
and passed the order on to the professional engineer available in the geographic area.
Engineer A performed the services, prepared a report, and submitted the report to IJK,
Inc. Engineer A invoiced IJK, Inc. for his services at half what he would normally
charge to another client for the same services. IJK, Inc. invoiced the client for its
services, twice the amount that is charged by Engineer A, a fact later learned by
Engineer A. IJK, Inc. had no exclusive contractual or business relationship with
Engineer A, and IJK, Inc. possessed no engineering expertise.
In determining that it was unethical for Engineer A to continue association with the
referral firm after learning that IJK, Inc. was indicating a fee for Engineer A's services
to the IJK, Inc. client that was different from the fee charged by Engineer A, the Board
noted that the fact that IJK, Inc. typically makes contact with the employer, takes an
order for a job, and passes the order on to the professional engineer available in the
geographic area suggests that IJK, Inc. was acting purely as a broker under the facts,
and that Engineer A's forbearance of his full fee constitutes payment for valuable
consideration in order to secure work, prohibited by Code II.5.b.
In addition, under the facts, it was clear that Engineer A performed all necessary
services and prepared the report for the actual client. IJK, Inc. provided no benefit to
the client other than simply passing the professional report prepared by Engineer A to
the client. IJK, Inc. appeared to be acting purely as a "go-between" and did not appear
to be adding any value to the services purchased by clients even though such clients
are paying a significant fee for the involvement of IJK, Inc. The Board was
particularly disturbed by Engineer A's continued association with IJK, Inc. after
learning that IJK, Inc. had indicated a fee for Engineer A's services on the IJK, Inc.
invoice to its client that was different from the fee charged by Engineer A. On the face
of it, IJK's practice misrepresented Engineer A's actual fee and was judged a deceptive
practice.
Turning to the facts of this case, while there are similarities between this case and
Case Nos. 86-1 and 92-3, there also are some differences. For example, unlike the
situation in Case No. 92-3, in the present case, Engineer A is providing a service coordination of services -- for the benefit of the client. In Case No. 92-3, it is clear
that IJK acted purely as a "go-between" and did not appear to be adding any value to
the services purchased by clients.
Nonetheless, a key point in the present case is that Engineer A appears to be creating
an arrangement that would force the other engineering firms to violate Code II.5.b. by
requiring those firms to pay a "referral fee," thereby paying what amounts to a
commission and offering valuable consideration in order to secure work. It is clear
that Engineer A is not a "bona fide employee or bona fide established commercial or
marketing agency retained by those firms," but instead is acting as the coordinating
engineer for the benefit of a client. Engineer A is being compensated directly for the
coordination service by the client and the Board can see no basis to justify Engineer
A's requirement of a "referral fee" to be paid by the other engineering firms. There is
nothing to indicate any basis for such a payment to Engineer A. In addition to being a
violation of Code II.5.b., Engineer A's actions create the appearance of an engineer
exerting undue pressure on other engineers in order for the engineers to gain access to
work. There also appears to be a not so subtle message being conveyed to the other
engineers: Future work for your firm is based upon an understanding that you will pay
a referral fee to me." We believe that this amounts to a "kickback," is unethical, and
cannot be condoned under the language of the NSPE Code of Ethics.
Conclusion:
It was not ethical for Engineer A to charge the other engineering firms a "referral fee"
under the circumstances described.
BOARD OF ETHICAL REVIEW
James G. Fuller, P.E.; William E. Norris, P.E.; Paul E. Pritzker, P.E.; Richard Simberg,
P.E.; Jimmy H. Smith, P.E., Ph.D.; C. Allen Wortley, P.E.; Donald L. Hiatte, P.E.,
Chairman
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 of Ethics 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 of Ethics 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 the "Ethics Button" on NSPE's website (www.nspe.org) and learn how to obtain
complete volumes that include all NSPE Opinions (or call 1-800-417-0348).
[Disclaimer]
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Case 97-11
Duty to Disclose Disciplinary Complaint to Client
Code Citations: [II.3.a] [II.4.a] [II.5.a] [III.3.a]
Facts:
Engineer A is retained by Client B to perform design services and provide a Critical
Path Method (CPM) schedule for a manufacturing facility. Engineer A prepares the
plans and specifications and the CPM schedule.
During the rendering of services to Client B on this project, the state board of
professional engineers contacts Engineer A regarding an ethics complaint filed against
Engineer A by Client C relating to services provided on a project for Client C that are
similar to the services being performed for Client B. Client C alleges that Engineer A
lacked the competence to perform the services in question. Engineer A does not
believe it is necessary to notify Client B of the pending complaint. Later, through
another party, Client B learns of the ethics complaint filed against Engineer A and tells
Engineer A that he is upset by the allegations and that Engineer A should have brought
the matter to Client B's attention.
Question:
Was it unethical for Engineer A to not report to Client B the ethics complaint filed
against Engineer A by Client C?
References:
Code II.3.a
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.
Code II.4.a
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.
Code II.5.a
Engineers shall not falsify their qualifications or permit misrepresentation of

their, or their associates' qualifications. They shall not misrepresent or
exaggerate their responsibility in or for the subject matter of prior assignments.
Brochures or other presentations incident to the solicitation of employment
shall not misrepresent pertinent facts concerning employers, employees,
associates, joint venturers or past accomplishments.
Code III.3.a
Engineers shall avoid the use of statements containing a material
misrepresentation of fact or omitting a material fact.
Discussion:
The obligation of the engineer to be honest and truthful and to avoid acts that might be
viewed as misleading and deceptive is clearly stated in various sections of the NSPE
Code of Ethics (See Code II.3.a.,Code II.4.a, Code II.5.a. and Code III.3.a.). These
include the obligations to be truthful in public statements, act as a faithful agent and
trustee in dealings with clients, not falsify or misrepresent their professional
qualifications, and avoid the use of statements containing a material misrepresentation
of fact.
The Board has reviewed a number of factual situations over the years relating to the
question of misleading clients through the misrepresentation of professional
qualifications. For example, in Case No. 83-1, Engineer A worked for Engineer B.
Engineer B notified Engineer A that Engineer B was going to terminate Engineer A
because of lack of work. Engineer A continued to work for Engineer B for several
additional months after the termination notice. During that period, Engineer B
distributed a previously printed brochure listing Engineer A as one of Engineer B's
key employees, and continued to use the previously printed brochure with Engineer
A's name in it well after Engineer B did in fact terminate Engineer A.
The Board ruled that it was not unethical for Engineer B to distribute a previously
printed brochure listing Engineer A as a key employee, providing Engineer B apprised
the prospective client, during negotiation, of Engineer A's pending termination. The
Board also ruled that it was unethical for Engineer B to distribute a brochure listing
Engineer A as a key employee after Engineer A's actual termination. Interpreting the
meaning of Code II.5.a, we noted that the words "pertinent facts" are those facts that
have a clear and decisive relevance to a matter at hand. Another way to characterize
pertinent facts is as those that are "relevant and highly significant." We determined
whether (1) Engineer B in fact misrepresented "pertinent facts" and (2) whether it was
the intent and purpose of Engineer B to "enhance the firm's qualifications and work."
We noted that both factors must be present for a violation of Code II.5.a to exist. The
Board noted that it is not unusual for an engineering firm that seeks to promote itself
for business reasons to include in such a brochure a statement of the firm's experience,
its history, and its qualifications, as well as the names and qualifications of the
members of the firm. We said that the names of the firm's members are often quite
significant to the client selecting the firm. The client may be familiar with an
individual member of the firm as represented in the brochure. We concluded that the
inclusion of the name of Engineer A in the firm's brochure constituted a
misrepresentation of "pertinent facts."
In Case No. 83-1, a second point we considered was whether it was the "intent and
purpose" of Engineer B to "enhance the firm's qualifications and work" by including
Engineer A's name in the promotional brochure after Engineer A left the firm. The
facts presented in the case demonstrated that Engineer B acted with "intent and
purpose" in distributing the misleading brochure. Engineer B was well aware of the
impending termination of Engineer A, as Engineer B was the very person who
terminated Engineer A. Engineer B distributed the brochure while Engineer A was still
employed but had been given a notice of termination. The Board noted that this could
easily mislead potential clients into believing that Engineer A, noted as a key
employee, would be available in the firm for consultation on future projects.
Moreover, Engineer B distributed the brochure after Engineer A had left the firm. The
Board concluded that this would be a clear misrepresentation of a pertinent fact with
the intent to enhance the firm's qualifications, and, as such, constituted a violation of
the NSPE Code.
In Case No. 90-4, Engineer X was employed by Firm Y, a medium-sized engineering
consulting firm controlled by Engineer Z. Engineer X is one of the few engineers in
Firm Y with expertise in hydrology, but the firm's work in the field of hydrology did
not constitute a significant percentage of the firm's work. Engineer X, an associate
with the firm, gave two weeks notice of her intent to move to another firm. Thereafter,
Engineer Z, a principal in Firm Y, continued to distribute a brochure identifying
Engineer X as an employee of the firm and list Engineer X on the firm resume. After
reviewing the facts, the Board concluded that it was not unethical for Engineer Z to
continue to represent Engineer X as an employee of Firm Y under the circumstances
described. Considering the earlier cases, the Board noted that the facts in Case No. 904, while similar, are different in one important area. In Case No. 83-1, Engineer A was
highlighted in the firm's promotional brochure as a "key employee." Under the totality
of the facts and circumstances of the case, it was apparent that Engineer B's continued
inclusion of Engineer A's name in the brochure constituted an overt misrepresentation
of an important fact concerning the overall makeup of the firm.
The facts in the present case are somewhat different than those involved in BER Case
Nos. 83-1 and 90-4, because the earlier cases involved efforts by an engineering firm
to enhance the firm's credentials by implying that the firm had a higher level of
expertise than it actually had. In contrast, the present case involves a situation that
could reflect negatively on Engineer A and his firm. However, the Board does not
believe the nature of the information -- whether positive or negative -- is at issue. The
issue of greatest importance in each of these cases appears not to be whether a client
would be pleased or disappointed with the information, but whether the information
communicated (or in the present case not communicated) amounts to an act that
misleads or deceives the client.
The Board is of the opinion that while an engineer clearly has an ethical obligation to
act as a faithful agent and trustee for the benefit of a client, avoid deceptive acts, be
objective and truthful, avoid conflicts, etc., such obligations would not compel an
engineer to automatically disclose that a complaint had been filed against the engineer
with the state engineering licensure board. A complaint is a mere allegation and does
not amount to a finding of fact or conclusion of law. No engineer should be compelled
to disclose potentially damaging allegations about his professional practice -allegations that could be false, baseless, and motivated by some malicious intent.
Instead, Engineer A should weigh all factors and, depending upon the nature and
seriousness of the charges, take prudent action, which might include providing Client
B with appropriate background information.
On this last point, while the Board is not suggesting that Engineer A had an ethical
obligation to report to Client B the ethics complaint filed against him by Client C, the
Board believes Engineer A should have weighed providing Client B with some limited
background information in a dispassionate and nonprejudicial matter for the benefit of
all concerned. By doing so, Engineer A would be providing Client B with early notice
of the pending matter so that Client B will be able to respond to comments or
questions by third parties and would be demonstrating to Client B that Engineer A is
acting in a professional and responsible manner and has nothing to hide or fear
concerning the complaint.
Conclusion:
It was ethical for Engineer A not to report to Client B the ethics complaint filed
against Engineer A by Client C.
Chairman
[Disclaimer]
Case 97-12
Copyright - Duty to Report Violation of Copyright Licensing Agreement
Code Citations: [II.1.c] [II.1.e] [II.4] [III.10]
Facts:
Engineer A is employed by SPQ Engineering, an engineering firm in private practice
involved in the design of bridges and other structures. As part of its services, SPQ
Engineering uses a CAD software design product under a licensing agreement with a
vendor. Although under the terms of the licensing agreement, SPQ Engineering is not
permitted to use the software at more than one workstation without paying a higher
licensing fee, SPQ Engineering ignores this restriction and uses the software at a
number of employee workstations. Engineer A becomes aware of this practice and
calls a "hotline" publicized in a technical publication and reports his employer's
activities.
Question:
Was it ethical for Engineer A to report his employer's apparent violation of the
licensing agreement on the "hotline" without first discussing his concerns with his
employer?
References:
Code II.1.c
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.
Code II.1.e
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.
Code II.4
Engineers shall act for each employer or client as faithful agents or trustees.
Code III.10
Engineers shall give credit for engineering work to those to whom credit is due,
and will recognize the proprietary interests of others.
Discussion:
The facts and circumstances involved in this case are probably most analogous to
earlier Board of Ethical Review cases dealing with the issue of whistleblowing.
Over the years, the Board has considered two cases relating to the issue of
whistleblowing. The first, BER Case No. 82-5, involved the issue of whether an
engineer had an ethical obligation or an ethical right to continue his efforts to secure
change in the policy of his employer or to report his concerns to the proper authority.
The case related to an engineer, employed by a large industrial employer, who, after
observing that certain subcontractor plan submissions were inadequate, notified his
employer of the problem. Following several notifications to the employer, which were
ignored, the engineer became insistent regarding the problem, with the result that the
employer placed a critical memo in the engineer's file and ultimately placed the
engineer on probation and at risk for possible termination. After reviewing earlier
BER cases and appropriate NSPE Code provisions, the Board noted that the facts
before it did not relate to a danger to the public health and safety, but were premised
upon a claim of unsatisfactory plans and the unjustified expenditure of public funds.
The Board concluded that, in the type of situation presented in Case No. 82-5, the
ethical duty or right of the engineer becomes a matter of personal conscience. The
Board was not willing to make a blanket statement that there is an ethical duty in these
kinds of situations for the engineer to continue his campaign within the company and
make the issue one for public discussion. Said the Board, "the NSPE Code only
requires that the engineer withdraw from a project and report to proper authorities
when the circumstances involve endangerment of the public, health, safety, and
welfare."
More recently, in Case No. 88-6, which involved a city engineer who learned of
wastewater ponds overflowing into a river, the Board, in reviewing the reasoning in
Case No. 82-5, concluded that the facts involved a danger "to the public health and
safety - the contamination of a community water supply." On that basis, the Board,
tracing its rationale in Case No. 82-5, noted that where an engineer determines that a
case may involve a danger to the public safety, the engineer has not merely an "ethical
right" but has an "ethical obligation" to report the matter to the proper authorities and
withdraw from further service on the project. Importantly, the Board acknowledged
that it is difficult to say exactly at what point the engineer should have reported her
concerns to the appropriate authorities. However, it was suggested that such reporting
could have occurred when the engineer was reasonably certain that no action would
be taken concerning her recommendations and that, in her professional judgment, a

probable danger to the public health and safety existed.
We believe these two cases are instructive and relevant to the matter presently before
the Board, for at least two significant reasons. First, the two cases draw a clear
distinction between those matters that involve possible apparent improprieties and
those that involve a probable or imminent danger to the public health and safety.
Although not stated directly in either earlier case, adding further support to this basic
principle is the fact that the language in Code II.1.e. is within the Rule of Practice
section specifically relating to the engineer's paramount obligation to protect the
public health and safety.
Second, the circumstances involved in both BER Case Nos. 82-5 and 88-6 appear to
involve situations where the engineers have at least made an effort to exhaust all
internal mechanisms before contemplating taking action by reporting the dangers to
the proper authorities.
Under the facts in the present case, the Board concludes that the facts and
circumstance are not of a character that involve any danger -- direct or indirect -- to
the public health and safety. Instead, the facts and circumstances relate to matters of a
legal nature and do not relate to engineering judgment or expertise. Code II.4 places a
basic obligation on engineers to be faithful agents and trustees in professional matters
with their employers. It is the Board's opinion that Engineer A's actions in reporting
his employer's apparent violation was directly in conflict with the NSPE Code of
Ethics. We are troubled that Engineer A did not consider other less adversarial and
surreptitious alternatives. For example, Engineer A could have first discussed this
matter with his employer, pointing out the possible damages that the violation posed
to SPQ Engineering, and suggesting that SPQ Engineering confer with its legal
counsel before continuing its current actions. Instead, Engineer A took a course of
action that could cause significant damage to SPQ Engineering and ultimately to
Engineer A himself. One is inclined to wonder about the motivation for Engineer A's
actions without his first exploring other less adversarial and surreptitious alternatives,
in view of the lack of any direct danger to the public health and safety. While, in the
context of the facts of this case, we cannot conclude that this provision compels
Engineer A to ignore an apparent violation of the law and the NSPE Code (See Code
III.10), by the same token, Engineer A could have easily exercised far greater
judgment and professional discretion before taking action.
Conclusion:
It was not ethical for Engineer A to report his employer's apparent violation of the
licensing agreement on the "hotline" without first discussing his concerns with his
employer.
Chairman
[Disclaimer]
Case 97-13
Duty To Report Unrelated Information Observed During Rendering of Services
Code Citations: [II.1.c] [II.3.a] [III.1.a] [III.2.b]
Facts:
A public agency retains the services of VWX Architects and Engineers to perform a
major scheduled overhaul of a bridge. VWX Architects and Engineers retains the
services of Engineer A, a civil engineer, as its subconsultant to perform bridge
inspection services on the bridge. Engineer A's scope of work is solely to identify any
pavement damage on the bridge and report the damage to VWX for further review and
repair.
Three months prior to the beginning of the scheduled overhaul of the bridge, while
traveling across the bridge, Police Officer B loses control of his patrol car. The vehicle
crashed into the bridge wall. The wall failed to restrain the vehicle, which fell to the
river below, killing Police Officer B.
While conducting the bridge inspection, and although not part of the scope of services
for which he was retained, Engineer A notices an apparent pre-existing defective
condition in the wall close to where the accident involving Police Officer B occurred.
Engineer A surmises that the defective condition may have been a contributing factor
in the wall failure and notes this in his engineering notes. Engineer A verbally reports
this information to his client, which then verbally reports the information to the public
agency. The public agency contacts VWX Architects and Engineers which then
contacts Engineer A and asks Engineer A not to include this additional information in
his final report since it was not part of his scope of work. Engineer A states that he
will retain the information from his engineering notes but not include it in the final
report, as requested. Engineer A does not report this information to any other public
agency or authority.
Question:
1. Was it ethical for Engineer A to retain the information in his engineering notes but
not include it in the final report as requested?
2. Was it ethical for Engineer A not to report this information to any other public
agency or authority?
References:
Code II.1.c
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.
Code II.3.a
reports, statements or testimony, which should bear the date indicating when it
was current.
Code III.1.a
Engineers shall acknowledge their errors and shall not distort or alter the facts.
Code III.2.b
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:
Engineers play a vital role in society in providing a higher degree of assurance that the
products, systems, facilities, and structures used by the public are safe and effective.
Engineers are frequently placed in situations where they must balance the extent of
their obligations to their employer or client with their obligations to protect the public
health and safety.
An example of this basic ethical dichotomy was considered by the NSPE Board of
Ethical Review in Case No. 89-7 (which the Board also applied in Case No. 97-5). In
that case, an engineer, Engineer A, was retained to investigate the structural integrity
of a 60-year-old occupied apartment building, which his client was 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 clear to Engineer
A that the building was being sold "as is" and that the client 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 inform him that the building contained
deficiencies in the electrical and mechanical systems, which violated applicable codes
and standards. While Engineer A is not an electrical or mechanical engineer, he does

realize those deficiencies could cause injury to the occupants of the building and so
informs the client. Specifically, 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 deciding it was unethical for Engineer A not to report the safety violations to the
appropriate public authorities, the Board noted that the facts presented in the case
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.
As noted in Case No. 89-7, there are various rationales for the nondisclosure language
contained in the NSPE Code. Engineers, in the performance of their professional
services, act as "agents" or "trustees" to their clients. They are privy to a great deal of
information and background concerning the business affairs of their client. The
disclosure of confidential information could be quite detrimental to the interests of
their client and, therefore, engineers as "agents" or "trustees" are expected to maintain
the confidential nature of the information revealed to them in the course of rendering
their professional services.
Turning to the facts in this case, it is the Board's position that the facts and
circumstances in Case No. 89-7, while somewhat similar in nature, are significantly
different than the facts in the present case. First, it is clear that, unlike Case No. 89-7,
which involved facts and circumstances that were openly conveyed directly to
Engineer A from a client, in the present case, the circumstances bearing on the public
safety were revealed to the engineer as part of the engineer's inspection and
professional observations. Presumably, the manner in which information is conveyed
to an engineer will have some bearing on the client's expectation of the engineer's
maintaining the confidentiality of the particular information. In the present case, it is
difficult for this Board to conclude that the client or the public agency could have had
a genuine expectation of confidentiality, since nothing of a confidential nature was
directly conveyed by the client or the public agency to Engineer A.
Another difference between the two cases is that in Case No. 89-7, there was a
specific agreement between the engineer and the client to maintain the confidentiality
of the information contained in the engineer's report. In contrast, in the present case,
there is nothing to indicate under the facts that an agreement exists between any of the
parties to maintain the confidentiality of all or part of any reports prepared by the
engineer.
Also in Case No. 89-7, there was the possibility of a dangerous condition developing
at some point in the future, while in the present case, loss of life had already occurred.
Importantly however, this circumstance needs to be contrasted with the circumstances
in Case No. 89-7, where the client had essentially admitted serious code violations,
while, in the present case, the possibility of a defect is merely a matter of speculation
and surmise.
It is on this last point that the Board believes this case must hinge. Looking at the facts
and circumstances in their totality, the Board is convinced that Engineer A acted
reasonably under the circumstances by properly balancing the obligation of the
engineer to be faithful to the client and not to disclose what might be considered by
the client to be 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.
The Board says this because there is nothing under the facts to indicate anything more
than Engineer A's general surmise and speculation about the cause of the structural
failure of the wall. Engineer A's observation appears to be based upon a visual
inspection without anything more. There is nothing noted in the facts to indicate that
Engineer A had expertise in structural engineering. While it may be appropriate for
Engineer A to note such information in his field notes, to place this information in a
final report would not be responsible and could unnecessarily inflame the situation.
However, under no circumstance would it be appropriate for Engineer A to alter his
field notes.
Also, while it might be appropriate for Engineer A to verbally report this information
to Engineer A's client, and for the client to report this information to the public
agency, it is clear that Engineer A was retained to perform a specific task for which he
was presumably competent. Clearly the prime consultant, which has overall
responsibility for the project, is in a far better position than Engineer A to understand
the interrelationships between various elements of the projects, including the history
of previous work performed on the bridge, prior consultants, contractors, etc., in order
to make an informed evaluation.
Therefore, the Board concludes that Engineer A did the appropriate thing in coming
forward to his client with the information and also by documenting the information
for possible future reference as appropriate. Under the circumstances it would have
been improper for Engineer A to include reference to the information in his final
report, particularly since it would have been based upon mere speculation and not
careful testing or evaluation by a competent individual or firm. At the same time, the
Board is of the opinion that Engineer A has an obligation to follow through to see that
correct follow-up action is taken by the public agency. Only if the public agency does
not take corrective action should Engineer A consider alternatives. Finally, for
Engineer A to have reported this information to a public authority under the
circumstances as outlined in the facts, before determining whether corrective action is
taken, would have been an overreaction and could easily have risked jeopardizing the
professional reputations of his client and the public agency.
Conclusion:
1. It was ethical for Engineer A to retain the information in his engineering notes but
not include it in the final written report as requested.
2. It was ethical for Engineer A not to report this information to any other public
agency or authority as long as corrective action is taken by the public agency within a
relatively short period of time.
P.E.; Jimmy H. Smith, P.E., Ph.D.; C. Allen Wortley, P.E.;Donald L. Hiatte, P.E.,
Chairman
[Disclaimer]
Case 98-1
Serving as design engineer and general contractor
Code Citations: [III.4.a] [III.9.a]
Facts:
Engineer A, a principal in a local consulting engineering firm practicing as a
professional corporation, who also is a principal owner in a construction contracting
firm, prepared plans and specifications for the design and construction of a
conventional/non-proprietary roof structure for a municipal wastewater treatment
facility. The scope of his services were limited to this project only. The municipality
engaged a second firm, Engineer B, to administer the bidding and construction, using
the plans and specifications prepared by Engineer A. The project was advertised for
public bidding, and bids were received and opened. One of the bidders was Engineer
A's construction contractor firm.
Question:
Was it ethical for Engineer A to bid as the general contractor on a project Engineer A
designed?
References:
Code III.4.a
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.
Code III.9.a
Engineers shall conform with state licensure laws in the practice of
engineering.
Discussion:
The Board has had an opportunity to discuss the question of conflicts of interest in
connection with so-called "Turnkey Procedures" on at least one other occasion. In
BER Case 76-9, Engineer Jones was retained by a public agency to develop technical
guidelines for an incinerator facility at a major government installation. Following

submission, approval and payment to Jones for the technical guidelines, the public
agency owner decided it wanted to proceed with the design and construction by a
"turnkey" method of one entity providing both the design and construction. The owner
requested Jones to participate in this approach through a joint venture arrangement
with a construction contractor, or preferably, by performing the design function as a
subcontractor to the construction contractor; or if he preferred, to bid the complete
"turnkey" contract and subcontract the construction to a construction company. In any
of these arrangements, the owner proposes to secure bids for the design and
construction. In concluding that Jones may ethically participate in the enterprise
through any of the design/construction procedures stated, the Board, addressing the
question of conflict of interest noted, that it could find nothing in the Code that stands
for the proposition that engineers may not engage in design/construct or "turnkey"
procedures. The Board cited that the conflict of interest provisions in the Code are not
controlling by its terms because the owner not only has knowledge of the possibility
of a conflict through a business relationship of the parties, but is in fact the moving
party desiring the design/construct method.
In BER Case 76-9, the Board proceeded to note that there was no apparent basis under
the facts to be concerned about the business relationship influencing the judgment or
the quality of services of the engineer because he will jointly with the contractor have
the duty to provide the owner with quality engineering services, which are basic to
sound construction.
While there are obvious differences in the facts, in some respects, there are basic
similarities between BER Case 76-9 and Case 98-1. In both cases, the engineers were
involved in either the development of technical design guidelines or plans and
specifications for a client on a specific project and later were offered the opportunity
to lead the construction effort on the same project.
From the facts of this case, it is clear that Engineer A, by being involved in the design
of the roof structure for the municipal utility system has become thoroughly
knowledgeable about the plans, specifications, drawings, and financing of the project
and will have a material and arguably unfair competitive advantage over other
contractors who submit bids on the project. Also, although there is nothing in the facts
to suggest this possibility, Engineer A could potentially be exposed to criticism that
his firm designed a roof structure system that either specified or contained
performance criteria that was coordinated with a potential proposal by Engineer A's
construction contracting firm.
Finally, while not stated in the facts, there appears to be a possible implication based
upon a reading of the facts that among the reasons why Engineer A may have been
engaged for design services only was the fact that the laws of the jurisdiction in which
the work is being performed precluded Engineer A from performing the work under a
"design/build" arrangement and that Engineer A's "limited engagement" effectively
permitted Engineer A to bid the work as the contractor through a de facto design/build
arrangement (See Code III.9.a.). If the purpose of this arrangement was merely to
serve as a subterfuge to allow Engineer A the opportunity to evade a legal restriction
on design/build and provide Engineer A with a competitive advantage, the Board of
Ethical Review would have serious concerns about this arrangement, since it is clear
that such an arrangement would undermine procedures at least arguably intended for
the protection of the public.
On the other hand, the Board would not be less concerned if the laws of the
jurisdiction permitted a design/build contracting arrangement. While design/build has
become an accepted and established project delivery system that identifies singlepoint responsibility for design and construction services, and most of the ethical
objections to design/build concerning the engineer's obligation to the client have been
clarified, strict adherence to federal, state and local design/build procedures are
critical to assure the protection of the public and the administration of fair and
reasonable practices for designers and contractors. In this conclusion, the Board
would note that many of the issues relating to conflicting loyalties and independent
judgment addressed in the NSPE Board of Ethical Review decisions noted above can
be addressed through full disclosure and the establishment of clear lines of
communication and authority between and among the parties involved in the
design/build process (See BER Case No. 95-1).
Moreover, engaging the services of an separate engineer, Engineer B, to administer
the bidding and construction phase, will presumably establish a degree of objectivity
and impartiality over the process and result in a ongoing independent review of the
plans and specifications for the benefit of the client. Gaining the benefit of the design
engineer's thorough knowledge and understanding of the plans and specifications as
part of the construction team is an option a client should be able to consider.
Conclusion:
It is ethical for Engineer A to bid as the general contractor on a project Engineer A
designed under the facts presented, as long as the process followed was not a
subterfuge to evade the requirements of state and local procurement, licensure laws,
and disclosures or consent of all interested parties contained.
Lorry T. Bannes, P.E., James G. Fuller, P.E., Donald L. Hiatte, P.E., Joe Paul Jones,
P.E., Paul E. Pritzker, P.E., Richard Simberg, P.E., C. Allen Wortley, P.E., Chairman
This opinion is for educational purposes only. It may be reprinted without further
[Disclaimer]
Case 98-3
Use of CD-ROM for Highway Design
Code Citations: [II.2] [II.2.a] [II.2.b] [II.2.c] [III.2.b]
Case Citations: [71-2] [78-5] [94-8]
Facts:
Engineer A, a chemical engineer with no facilities design and construction experience,
receives a solicitation in the mail with the following information:
"Engineers today cannot afford to pass up a single job that comes by - including
construction projects that may be new or unfamiliar.
Now - - thanks to a revolutionary new CD-ROM - specifying, designing and costing
out any construction project is as easy as pointing and clicking your mouse - no matter
your design experience. For instance, never designed a highway before? No problem.
Just point to the 'Highways' window and click.
Simply sign and return this letter today and you'll be among the first engineers to see
how this full-featured interactive library of standard design can help you work faster
than ever and increase your firm's profits."
Engineer A orders the CD-ROM and begins to offer facilities design and construction
services.
Question:
Was it ethical for Engineer A to offer facilities design and construction services under
the facts presented?
References:
Code II.2
Engineers shall perform services only in the areas of their competence.
Code II.2.a
Engineers shall undertake assignments only when qualified by education or
experience in the specific technical fields involved.
Code II.2.b
Engineers shall not affix their signatures to any plans or documents dealing
with subject matter in which they lack competence, nor to any plan or
document not prepared under their direction and control.
Code II.2.c
Engineers may accept assignments and assume responsibility for coordination
of an entire project and sign and seal the engineering documents for the entire
project, provided that each technical segment is signed and sealed only by the
qualified engineers who prepared the segment.
Code III.2.b
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 issue of whether an engineer possesses the appropriate level of competence to
perform specified services is one of most basic professional and ethical issues faced
by practitioners (See Code II.2.a.). NSPE has been supportive of the concept that a
qualified individual engineer, regardless of his or her particular area of technical
discipline, should be licensed as a "professional engineer". However, this position
should not be understood to suggest that all engineers are free to practice without
restriction in any and all areas within the practice of engineering. Instead, all
engineers are implored to exercise careful professional judgment and discretion and
practice solely within his or her area(s) of competency.
Over the years, the Board of Ethical Review has examined the issue of professional
competency on numerous occasions under a variety of factual situations. For example,
in Case 94-8, Engineer A, a professional engineer, worked with a construction
contractor on a design/build project for the construction of an industrial facility.
During the construction of the project, the construction contractor separately retained
the services of a Engineer B, a professional engineer to design structural footings as
part of the facility. Engineer B's degree and background was in chemical engineering.
Engineer A had been unable to establish that Engineer B had any apparent subsequent
training in foundation design, and Engineer A had reservations concerning the
competence of Engineer B to design the structural footings and reported his concerns
to the contractor. The Board decided that it would be unethical for Engineer B to
perform the design of the structural footings as part of the facility and that Engineer A
had an ethical responsibility to question Engineer B's competency and report his
concerns to the contractor.
In BER Case 71-2, a case involving the brokerage of engineering services by two
firms competing for government work and the question of professional competence,
the Board recognized "the propriety and value of the prime professional or client
retaining the services of experts and specialists in the interests of the project" and
noted that a prime professional will be expected to retain or recommend the retention
of experts and specialists in situations in which the prime professional is performing
substantial services on the project. Likewise, BER Case 78-5 involved an effort by a
consulting firm under consideration to perform services to a public utility, in which
the firm sought to alter its qualifications following its interview with the public utility
in order to improve its position to secure the contract. The Board affirmed its decision
rendered in BER Case 71-2 that in the field of consulting practice, engineers have an
ethical obligation to seek work only in areas where they possess educational
background and experience or to retain individuals who possess the necessary
educational background and experience to perform the work.
It is clear that Engineer A, a chemical engineer, has no apparent substantive
background or experience in the area of facilities design and construction. A CDROM that permits virtually anyone to "specify, design and cost out" a project clearly
is not an appropriate basis upon which an individual can obtain professional
competency to perform facilities design and construction services. An individual
seeking to obtain an acceptable level of competency in the basic elements of facilities
design and construction (e.g., civil, structural, mechanical, electrical engineering)
should seek and be able to demonstrate appropriate engineering and related education
and experience). Relying on a "how to" CD-ROM appears to show a general disregard
for the fundamental role that professional engineers play in protecting the public
health and safety and minimizes the high level of knowledge and expertise necessary
to perform these critical responsibilities. Professional engineering cannot be reduced
to an activity whereby practitioners rely upon computers and technical information
instead of time-tested professional experience and engineering judgment.
In a sense, the direct mail product described under the facts is not unlike mail order
certifications offered by so called "diploma mills" whereby individuals "self certify"
their competency based upon a perfunctory review process that rarely involves
comprehensive study, examination, or practice. By ordering and using the CD-ROM,
Engineer A in a sense was "self-certifying" his competency to perform facilities
design and construction services without obtaining the substantive education,
experience, and qualifications to perform those services in a competent and
professional manner. The Board considers such activities completely contrary to the
basic ethical principles established in the Code of Ethics.
In closing, the Board's decision should not be understood as a wholesale rejection of
the use of computers, CD-ROMs and other technological advances. Rather, it is the
Board's position that technology has an important place in the practice of engineering,
but it must never be a replacement of a substitute for engineering judgment.
Conclusion:
It was not ethical for Engineer A to offer facilities design and construction services
under the facts presented.
[Disclaimer]
Case 98-5
Public Health and Safety -- Code Enforcement
Code Citations: [I.1] [II.1.b] [II.3.b] [III.1.b]
Case Citations: [65-12] [82-5] [88-6] [92-4]
Facts:
Engineer A serves as a director of a building department in a major city. Engineer A
has been concerned that as a result of a series of budget cutbacks and more rigid code
enforcement requirements, the city has been unable to provide a sufficient number of
qualified individuals to perform adequate and timely building inspections. Each code
official member of Engineer A's staff is often required to make as many as 60 code
inspections per day. Engineer A believes that there is no way even the most
conscientious code official can make 60 adequate, much less thorough, inspections in
one day, particularly under the newer, more rigid code requirements for the city. These
new code requirements greatly enhance and protect the public's health and safety. The
code officials are caught between the responsibility to be thorough in their inspections
and the city's desire to hold down costs and generate revenue from inspection fees.
Engineer A is required to sign off on all final inspection reports.
Engineer A meets with the chairman of the local city council to discuss his concerns.
The chairman indicates that he is quite sympathetic to Engineer A's concerns and
would be willing to issue an order to permit the hiring of additional code officials for
the building department. At the same time, the chairman notes that the city is seeking
to encourage more businesses to relocate into the city in order to provide more jobs
and a strengthened tax base. In this connection, the chairman seeks Engineer A's
concurrence on a city ordinance that would permit certain specified buildings under
construction to be "grandfathered" under the older existing enforcement requirements
and not the newer, more rigid requirements now in effect. Engineer A agrees to concur
with the chairman's proposal, and the chairman issues the order to permit the hiring of
additional code officials for the building department, which Engineer A believes the
city desperately needs.
Question:
Was it ethical for Engineer A to agree to concur with the chairman's proposal under
the facts?
References:
Code I.1
Engineers, in the fulfillment of their professional duties, shall hold paramount
the safety, health and welfare of the public.
Code II.1.b
Engineers shall approve only those engineering documents which are in
conformity with applicable standards.
Code II.3.b
Engineers may express publicly technical opinions that are founded upon
knowledge of the facts and competence in the subject matter.
Code III.1.b
Engineers shall advise their clients or employers when they believe a project
will not be successful.
Discussion:
The duty to hold paramount the public health, safety, and welfare is among the most
basic and fundamental obligations to which an engineer is required to adhere. While
in many instances, the obligation is often clear and obvious, in other instances, there
could be an obligation on the part of the engineer to balance competing or concurrent
obligations or responsibilities to protect the public health and safety. The facts of this
case are in many ways a classic ethical dilemma faced by many engineers in their
professional lives. Engineers have a fundamental obligation to hold paramount the
safety, health, and welfare of the public in the performance of their professional duties
(See Code I.1). Moreover, the Code provides guidance to engineers who are
confronted with circumstances where their professional reputations are at stake.
Sometimes engineers are asked by employers or clients to sign off on documents
about which they may have reservations or concerns (See Code II.1.b.).
The Board has addressed public health and safety issues in the code and approval
process on numerous occasions. In BER Case 92-4, Engineer A, an environmental
engineer employed by the state environmental protection division, was ordered to
draw up a construction permit for construction of a power plant at a manufacturing
facility. He was told by a superior to move expeditiously on the permit and "avoid any
hang-ups" with respect to technical issues. Engineer A believed the plans as drafted
were inadequate to meet the regulation requirements and that outside scrubbers to
reduce sulfur dioxide emissions were necessary and without them the issuance of the
permit would violate certain air pollution standards as mandated under the 1990 Clean
Air Act. His superior believed that the plans, which involved limestone mixed with
coal in a fluidized boiler process that would remove 90% of the sulfur dioxide, will
meet the regulatory requirements. Engineer A contacted the state engineering

licensure board and was informed, based upon the limited information provided to the
board, that suspension or revocation of his engineering license was a possibility if he
prepared a permit that violated environmental regulations. Engineer A refused to issue
the permit and submitted his findings to his superior. The department authorized the
issuance of the permit. The Board concluded that (a) it would not have been ethical
for Engineer A to withdraw from further work in this case, (b) it would not have been
ethical for Engineer A to issue the permit and (c ) it would be ethical for Engineer A to
refuse to issue the permit. Specifically, the Board determined that it would not have
been ethical for Engineer A to withdraw from further work on the project, because
Engineer A had an obligation to stand by his position consistent with his obligation to
protect the public, health, safety, and welfare and refuse to issue the permit. Said the
Board, "Engineers have an essential role as technically-qualified professionals to 'stick
to their guns' and represent the public interest under the circumstances where they
believe the public health and safety is at stake."
As early as BER Case 65-12, the Board dealt with a situation in which a group of
engineers believed that a product was unsafe. The Board then determined that as long
as the engineers held to that view, they were ethically justified in refusing to
participate in the processing or production of the product in question. The Board
recognized that such action by the engineers would likely lead to loss of employment.
In BER Case 82-5, where an engineer employed by a large defense industry firm
documented and reported to his employer excessive costs and time delays by subcontractors, 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 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.
More recently, in BER Case 88-6, an engineer was employed as the city
engineer/director of public works with responsibility for disposal plants and beds and
reported to a city administrator. After (1) noticing problems with overflow capacity,
which are required to be reported to the state water pollution control authorities, (2)
discussing the problem privately with members of the city council, (3) being warned
by the city administrator to report the problem only to him, (4) discussing the problem
again informally with the city council, and (5) being relieved by the city administrator
of responsibility for the disposal plants and beds, the engineer continued to work in
the capacity as city engineer/director of public works. In ruling that the engineer failed
to fulfill her ethical obligations by informing the city administrator and certain
members of the city council of her concern, the Board found that the engineer was
aware of a pattern of ongoing disregard for the law by her immediate supervisor, as
well as by members of the city council. After several attempts to modify the views of
her superiors, the engineer knew, or should have known, that "proper authorities" were
not the city officials, but more probably, state officials. The Board could not find it
credible that a city engineer/director of public works for a medium-sized town would
not be aware of this basic obligation. The Board said that the engineer's inaction
permitted a serious violation of the law to continue and made the engineer an
"accessory" to the actions of the city administrator and others.
Turning to the facts of the present case, Engineer A is faced with a predicament with a
variety of options and alternatives. First, Engineer A could interpret the situation
presented as one involving "trade-offs," in which Engineer A must weigh one "public
good" (a better building inspection process) against a competing or concurrent "public
good" (a consistent code enforcement process). In such a situation, Engineer A could
arguably rationalize a decision to permit the inconsistent application of a building
code in order to accomplish the larger objective of obtaining the necessary resources
to hire a sufficient number of code enforcement officials to provide proper protection
to the public health and safety. On the other hand, Engineer A's decision to permit
developers to avoid compliance with the newer, updated building code enforcement
requirements might potentially cause a real danger to the public health and safety if
the a new facility causes harm to the public because of its failure to comply with the
more updated code requirements. In addition, agreeing to the chairman's arrangement
has the appearance of compromising the public health and safety for political gain.
While this case presents a difficult dilemma for Engineer A, on balance, the Board
believes that previous BER cases provide sufficient guidance for Engineer A. Each of
the earlier cases discussed present a constant theme that the engineer must hold the
public health and safety paramount and that the engineer has an responsibility to
insist, however strongly and vociferously, that public officials and decision-makers
take steps and corrective steps if necessary to see that this obligation is fulfilled. The
Code of Ethics makes it clear that engineers have an obligation to advise their clients
or employers when they believe a project will not be successful. In this case, Engineer
A should make it plain and clear to the chairman that "righting a wrong with another
wrong," does grave damage to the public health and safety (See Code III.1.b.).
Engineer A should insist that the public will be seriously damaged in either case and
that if the integrity of the building code enforcement process is undermined for shortterm gain, the city, its citizens, and its businesses will be harmed in the long term.
Conclusion:
It was not ethical for Engineer A to agree to concur with the chairman's proposal
under the facts. Additionally, it was not ethical for Engineer A to sign inadequate
inspection reports. (See Section II.1.b.).
[Disclaimer]
Case 94-11
Conflict of Interest - Disclosure & Participation as Government Official on Work
Related to Former Firm
Code Citations: [8(a)] [8] [II.4] [II.4.a] [II.4.d] [III.3] [III.5] [Preamble]
Facts:
Engineer A is a principal in a consulting engineering firm. He is appointed by the
governor of a state to serve as secretary of commerce and resigns from the
engineering firm. While Engineer A was a principal in the engineering firm, the firm
had performed work for a major developer that is planning to build a major project in
the state. As secretary of commerce, the governor has asked Engineer A to spearhead
the state's campaign to bring the major development project to the state. The project
has been the subject of controversy due to its potential environmental impact and the
effect it could have on historic areas of the state.
Although Engineer A resigned from the engineering firm, he maintained a $250,000
retirement fund administered by the engineering firm, which includes an insubstantial
amount of stock in the consulting firm. The firm has recently indicated that it might be
interested in pursuing additional engineering work for the developer that would be
part of the major development project. Engineer A has also indicated to members of
the media that upon the conclusion of his services as secretary of commerce, there is a
genuine possibility that he would return to his consulting engineering firm. Engineer
A has fully disclosed all pertinent information to the state.
Questions:
1. Was it ethical for Engineer A to maintain a retirement fund administered by his
former engineering firm while serving as secretary of commerce under the facts
described?
2. Was it ethical for Engineer A, as secretary of commerce, to participate in
consideration of issues relating to the major development project?
References:
Code Preamble
Engineering is an important and learned profession. The members of the

profession recognize that their work 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. In the practice of their
profession, engineers must perform under a standard of professional behavior
which requires adherence to the highest principles of ethical conduct on behalf
of the public, clients, employers and the profession.
Code II.4
Engineers shall act in professional matters for each employer or client as
faithful agents or trustees.
Code II.4.a
Engineers shall disclose all known or potential conflicts of interest to their
employers or clients by promptly informing them of any business association,
interest, or other circumstances which could influence or appear to influence
their judgement or the quality of their services.
Code II.4.d
Engineers in public service as members, advisors or employees of a
governmental or quasi-governmental body or department shall not participate
in decisions with respect to professional services solicited or provided by them
or their organizations in private or public engineering practice.
Code III.3
Engineers shall avoid all conduct or practice which is likely to discredit the
profession or deceive the public.
Code III.5
Engineers shall not be influenced in their professional duties by conflicting
interests.
Discussion:
Over the years, the Board has considered a number of cases relating to the conflict of
interests that could arise in connection with the activities in which the engineer may
be involved and the impact that such activities could appear to have on the personal
economic interests of the engineer. As the Board has noted on numerous occasions,
the basic ethical duty of the engineer in areas of conflict of interest is to inform the
client of those business connections or interests that may influence the judgment and
quality of the engineering services. Those decisions have been consistent with the
provisions of Code II.4.a. of the NSPE Code of Ethics.
As we noted in BER Case 85-6, while that provision of the Code has been interpreted
many times over the years, it is, as are all Code provisions, subject to constant
examination and reinterpretation. For any code of ethics to have meaning, it must be a
living, breathing document which responds to situations that evolve and develop.
This Board has generally interpreted that code provisions relating to conflicts of
interest in a strict manner. In BER Case 69-13, the Board reviewed a situation where
an engineer was an officer in an incorporated engineering consulting firm that was
engaged primarily in civil engineering projects for clients. Early in the engineer's life,
he had acquired a tract of land by inheritance, which was in an area being developed
for residential and industrial use. The engineer's firm had been retained to study and
recommend a water and sewer system in the general area of his land interest. The
question faced by the Board under those facts was, "May the engineer ethically design
a water and sewer system in the general area of his land interest?"
The Board ruled that the engineer could not ethically design the system under those
circumstances. The Board acknowledged that the question was a difficult one to
resolve, pointing to the fact that there was no conflict of interest when the engineer
entered his practice but that the conflict developed in the normal course of his practice
when it became apparent that his study and recommendation could lead to the location
of a water and sewer system that might cause a considerable appreciation in the value
of his land depending upon the exact location of certain system elements in proximity
to his land. The Board stated that while the engineer must make full disclosure of his
personal interest to his client before proceeding with the project, such disclosure was
not enough under the Code.
Said the Board, "He can avoid such a conflict under these facts either by disposing of
his land holdings prior to undertaking the commission or by declining to perform the
services if it is not feasible or desirable for him to dispose of his land at the particular
time." The Board concluded by saying: "This is a harsh result, but so long as men are
in their motivations somewhat 'lower than angels', it is a necessary conclusion to
achieve compliance with both the letter and the spirit of the Code of Ethics. The real
test of ethical conduct is not when compliance with the Code comports with the
interests of those it is intended to govern, but when compliance is adverse to personal
interests."
We agree with much of what was stated in BER Case 69-13 considering the Code then
in effect. In its reading of the Code of Ethics, the Board took a strict view of the
meaning of the Code provisions then in force, which stated: "8. The Engineer will
endeavor to avoid a conflict of interest with his employer or client, but when
unavoidable, the Engineer shall fully disclose the circumstances to his employer or
client." "8.(a) The Engineer will inform his client or employer of any business
connections, interests, or circumstances which may be deemed as influencing his
judgment or the quality of his services to his client or employer."
It is clear from a reading of BER Case 69-13 that the Board focused its attention on
the first clause of Code 8 stating that "The engineer will endeavor to avoid a conflict
of interest with his employer or client." Undoubtedly, the Board reasoned that this was
the basic obligation of the engineer in this context, and that any qualification of that
obligation would dilute the essential meaning and intent of that obligation. Therefore,
the Board did not choose to rely upon the remaining provisions contained in Code
8 and Code 8(a) in reaching its decision. Instead, the Board determined that under the
facts it would not be sufficient for the engineer to make full disclosure of his personal
interest to the client in order to properly address the potential conflict-of-interest
question.
Later in BER Case 85-6, an engineer was retained by the state to perform certain
feasibility studies relating to a possible highway spur. The state was considering the
possibility of constructing the highway spur through an area that was adjacent to a
residential community in which the engineer's residence was located. After learning of
the proposed location for the spur, the engineer disclosed to the state the fact that his
residential property may be affected by the new spur and fully disclosed the potential
conflict with the state. The state did not object to the engineer performing the work.
The engineer proceeded with his feasibility study and ultimately recommended that
the spur be constructed. The highway spur was constructed.
In analyzing the case, the Board noted that since the earlier decision of BER Case 6913, the Code of Ethics had been altered and the phrase "engineer will endeavor to
avoid a conflict of interest with his employer or client" was no longer contained in the
applicable Code provision. The Board went on to note that the reason for that deletion
was certainly not out of a lack of desire within the engineering profession for an
ethical proscription relating to conflicts of interest. Truly, ethical dilemmas relating to
conflicts of interest are some of the most significant issues facing the engineering
profession. Nevertheless, the provision in the Code relating to conflicts of interest was
amended and those changes impact upon the manner in which the Board regards BER
Case 69-13 as well as the manner in which the Board interprets the Code. It is evident
that had Code II.4 and Code II.4.a. been in effect at the time the Board decided BER
Case 69-13, the Board may well have reached a different result.
As we noted in BER Case 85-6, it is not our role to speculate upon the intent of this
significant change in the NSPE Code of Ethics since BER Case 69-13 was rendered,
however, we do think that some expression by this Board in that regard would assist
readers in understanding the basis for the change. In no sense should this change be
interpreted in any way to suggest a retreat by this Board or the Code of Ethics from a
deep concern for dilemmas relating to conflicts of interest. Rather, it is our view that
the modifications in the Code reflect recognition of the fact that conflicts of interest
emerge in a multitude of degrees and circumstances and that a blanket, unqualified
expression prohibiting engineers to avoid all activities that raise the shadow of a
conflict of interest is not a workable approach.
It is often a question of degree as to what does and does not constitute a significant
conflict of interest. Obvious and significant conflicts of interest are easily identifiable
and should always be avoided. These difficult, multifaceted situations require
discussion and consideration as they are complex and sometimes irreconcilable. A
code should address and provide guidance for these kinds of conflicts of interest. We
believe the new Code provisions sought to establish the ethical obligation to engage in
dialogue with a client or employer on the difficult questions relating to conflicts of
interest. We think that it was for this reason that the Code provisions were altered.
Turning to the facts of the instant case, we decline to adopt the reasoning of the Board
in BER Case 85-6 and are of the view that the ethical obligations contained in Code
II.4.a. do not require the engineer to "avoid" any and all situations that may or may
not raise the specter of a conflict of interest. Such an interpretation of the Code leaves
engineers with a real understanding of the ethical issues and clear guidance as to how
to deal with the problem. The basic purpose of a code of ethics is to provide the
engineering profession with a better awareness and understanding of ethical issues
that impact upon the public. Only through interacting with the public and clients will
engineers be able to comprehend the true dimensions of ethical issues.
Unlike BER Case 85-6, we are of the view that the engineer's disclosure of the facts
and circumstance of his relationship with his engineering firm constituted a disclosure
of the possible conflict of interest but did not come within the ethical guidelines of the
Code and was not a proper course to take in dealing with the or appearance of
conflict. We are willing to state as we did in BER Case 69-13 that the engineer can
only avoid such a conflict either by "disposing of his land and holdings prior to
undertaking the commission or by declining to perform the services if it is not feasible
or desirable for him to dispose of his land at the particular time," in this case a
minimum amount of stock in his former employer's firm. Such an approach could not
constitute an unfair and unreasonable financial hardship to the engineer and would not
go beyond the requirements of the Code of Ethics.
Finally, we believe that Engineer A's relationship to the developer as a principal in the
consulting firm should require that he as secretary of commerce remove himself from
consideration of issues relating to the development project because of the many issues
specifically and directly relate to the professional services provided by his former
engineering firm. His role as secretary of commerce presumably involves a broad
range of commercial, business and related issues involving the financial well-being of
the state and Engineer A's judgment and knowledge to the issues that are presented to
him. He presumably would be influenced by his ongoing relationship with the firm.
Finally, the Board feels it is important to point out that the mere disclosure of a
potential conflict of interest to a client or employer does not in and of itself eliminate
the conflict of interest issue (contrast Code of Ethics Code II.4.a. with Code III.5). A
greater level of ethical commitment is required of engineers.
Conclusion:
1. It was unethical for Engineer A to maintain a retirement fund administered by his
former engineering firm while serving as secretary of commerce under the facts
described.
2. It was ethical for Engineer A, as secretary of commerce, to participate in
consideration of issues relating to the major development project, except where such
consideration specifically and directly relate to the professional services provided by
his former engineering firm.
James G. Fuller, P.E., Donald L. Hiatte, P.E., William W. Middleton, P.E., Robert L.
Nichols, P.E., William E. Norris, P.E., Jimmy H. Smith, P.E., William A. Cox, Jr., P.E.,
Chairman
Note: The Board of Ethical Review operates on an "ad hoc" educational basis, and
does not engage in resolving disputes of fact between parties in actual cases. That
function is left to the state society if members are involved in judging whether a
member has violated the Code of Ethics. Being solely educational, the function of the
Board is to take the submission of "facts" as the basis for analysis and opinion without
attempting to obtain rebuttal or comment from other parties. On that basis, the reader
of the opinions should always recognize that the Board of Ethical Review is not an
adjudicatory body, and unless indicated otherwise, its opinions are not binding upon
the National Society of Professional Engineers, any state engineering society or any
individual. Instead, the opinions represent the opinions of licensed engineers as to the
reasonable standards of practice within the engineering profession. Board of Ethical
Review opinions are intended to provide guidance in actual cases only to the extent of
the "facts", stated in the case. Cases may be reproduced for educational purposes as
long as the material reproduced provides appropriate attribution to NSPE and the
Board of Ethical Review.
[Disclaimer]
Case 94-6
Signing & Sealing Another Engineer's Plan
Code Citations: [14(a)] [14] [III.1] [III.10] [III.10.a] [III.3] [III.6] [III.7] [Preamble]
Facts:
Engineer A is retained by Client X to prepare plans and specifications in connection
with a commercial facility to be constructed. Engineer A prepares the plans and
specifications for Client X and delivers them to Client X who submits them to the
public building authority for approval. Client X fails to pay Engineer A for the work
performed. Thereafter, Client X sells the land upon which the commercial facility is to
be constructed to Purchaser Y. Purchaser Y obtains a copy of the plans and drawings
from the public building authority and then asks Engineer B to review, re-seal and
resubmit the plans and drawings prepared by Engineer A for review and approval by
the public building authority. Engineer B is aware that Engineer A was never paid for
his services, but agrees to review, re-seal and resubmit the plans and drawings
prepared by Engineer A for review and approval by the public building authority.
Question:
Was it ethical for Engineer B to agree to review, re-seal and resubmit the plans and
drawings prepared by Engineer A for review and approval by the public building
authority?
References:
Code Preamble
Code III.1
Engineers shall be guided in all their professional relations by the highest

standards of integrity.
Code III.3
Engineers shall avoid all conduct or practice which is likely to discredit the
profession or deceive the public.
Code III.6
Engineers shall uphold the principle of appropriate and adequate compensation
for those engaged in engineering work.
Code III.7
Engineers shall not attempt to obtain employment or advancement or
professional engagements by untruthfully criticizing other engineers, or by
other improper or questionable methods.
Code III.10
Engineers shall give credit for engineering work to those to whom credit is due,
and will recognize the proprietary interests of others.
Discussion:
This case presents a series of facts, some of which may be addressed by the Board,
others that may not. It appears from the facts that certain wrongdoings were
committed by a non-engineer. However, the Board of Ethical Review does not review
the conduct of non-engineers with respect to the Code of Ethics. As we have noted in
the past, non-engineers are not covered by the Code and therefore it would be a
meaningless act for this Board to review the conduct of Client X or Purchaser Y in the
facts presented above. Instead, it is the duty of the Board to focus upon the actions of
Engineer B.
In BER Case 64-7, the Board interpreted Code III.10.a. (then Code 14 and Code
14(a)) to mean that individual accomplishments and the assumption of responsibility
by individual engineers should be recognized by other engineers. "This principle",
said the Board, "is not only fair and in the best interests of the profession, but it also
recognizes that the professional engineer must assume personal responsibility for
decisions and actions." Although the facts of that case were somewhat different from
those in the case at hand, BER Case 64-7 reflects the view that each individual
engineer has an ethical obligation to recognize and give credit to the creative products
of other engineers. At a bare minimum, that ethical obligation includes securing the
consent of that engineer, indicating on any reproduction of that creation the identity of
the engineer and in some cases providing the engineer with remuneration for his work
depending upon the surrounding circumstances. Each case must be decided upon its
individual facts, as no two cases are alike. However, certain basic obligations exist
that must be recognized in all cases.
Similarly, BER Case 83-3 involved Engineer B who submitted a proposal to a county
council following an interview concerning a project. The proposal included technical
information and data that the council requested as a basis for the selection. Smith, a
staff member of the council, made Engineer B's proposal available to Engineer A.
Engineer A used Engineer B's proposal without Engineer B's consent in developing
another proposal, which was subsequently submitted to the council. The extent to
which Engineer A used Engineer B's information and data was in dispute between the
parties. In determining that it was unethical for Engineer A to use Engineer B's
proposal without Engineer B's consent in order for Engineer A to develop a proposal
which Engineer A subsequently submitted to the council, the Board indicated that at a
bare minimum, ethical obligation includes securing the consent of that engineer,
indicating on any reproduction of that creation the identity of the engineer responsible
for the work performed.
In the present case, Engineer B agreed to review, re-seal and resubmit the plans and
authority knowing that Engineer A had not been paid either by Client X or Purchaser
Y for the service rendered. The plans and drawings included technical information and
data that was not prepared by Engineer B. There does not appear to be any question or
dispute as to the extent to which Engineer B used Engineer A's information.
However, the fact that Engineer B used the information in the manner that he did
suggests a violation of Code III.10.a. of the Code of Ethics. Although it may be
argued that the Code provision is meant to address those situations where a
supervising engineer fails to give credit to an employee responsible for a particular
design, and not under the facts of the present case, we are convinced that the Code
may properly be read to imply use and thus proscribe the conduct of Engineer B.
Engineer B had an obligation to (1) seek and obtain Engineer A's consent before using
the plans as a basis for one's own services; (2) if granted consent, identify Engineer B
in all cases of use of Engineer A's work; and (3) negotiate and pay Engineer A "fair
and reasonable" compensation for using the work. By failing to fulfill any of those
obligations, Engineer B clearly violated Code III.10 and Code III.10.a..
Fundamental precepts of the Code of Ethics, embodies in its Preamble, include
"...services provided by engineers require... fairness and equity..." One must questions
whether the use by Engineer B of Engineer A;s work product under the stated
circumstances can be deemed either fair or equitable.
Code III.1 states that Engineers shall be guided ... by the highest standards of
integrity. Integrity includes "soundness of moral principles, as firm adherence to a
code of moral values (Black's and Webster New Collegiate). Can being a
knowledgeable party to such an unfair use of another's work be morally acceptable?
Code III.3 states that "Engineers shall avoid all conduct or practice that is likely to
discredit the profession..." Engineer B's part in such an unsavory business cannot help
but reflect most unfavorably upon the profession.
Code III.6 states that Engineers shall uphold the principle of appropriate and adequate
compensation for those engaged in engineering work. Engineer B's rate here
exemplifies the antithesis of this principle.
The actions of Engineer B suggest conduct unbecoming of a professional engineer.
When offered the contents of Engineer A's work by Purchaser Y, Engineer B had an
ethical obligation to refuse to accept the plans. Instead, Engineer B accepted and also
used the material. Because of the decision to actually use the plans, we must further
conclude that Engineer B violated Code III.7 by competing unfairly with Engineer A
by attempting to "obtain advancement by improper or questionable methods."
Although that Code provision is broad and leaves a good deal of room for
interpretation, we are convinced that the use of the plans constituted unfair
competition by improper and questionable methods. Whether there would have been a
violation of Code III.7 had Engineer B not used Engineer A's plans but merely
reviewed it before developing a set of plans is a speculative point. However, this
Board is being asked to determine whether a violation occurred as a result of Engineer
B's use of Engineer A's plans. We think that Engineer B's use under the present facts
constitutes unfair competition by improper and questionable methods and hence a
violation of Code III.7.
Conclusion:
It was unethical for Engineer B to agree to review, re-seal and resubmit the plans and
authority.
James G. Fuller, P.E., Donald L. Hiatte, P.E., William W. Middleton, P.E., Robert L.
Nichols, P.E., William E. Norris, P.E., Jimmy H. Smith, P.E., William A. Cox, Jr., P.E.,
Chairman
[Disclaimer]
Case 94-1
Conflict of Interest - Engineer Retained by State

Code Citations: [II.1.c] [II.3.a] [II.4] [II.4.b]
Case Citations: [59-3] [60-5] [62-7] [63-5] [76-3] [82-6] [85-4]
Facts:
Engineer A is retained by a developer in the early stages of a project to perform site
and engineering studies in connection with a major development project. Later,
Engineer A is selected by the state's department of transportation to oversee numerous
subconsultants in the preliminary design work for the proposed widening of eight
miles of an interstate highway and proposed construction of a new interchange to
serve the major development project. That work would be incorporated into the
federal environmental impact statement analyzing the road project's effect on traffic
and air quality. Engineer A officially informs the state department of transportation of
his earlier work for the developer.
Question:
Was it unethical for Engineer A to accept the contract with the state's department of
transportation?
References:
Code II.1.c
Engineers shall not reveal facts, data or information obtained in a professional
capacity without the prior consent of the client or employer except as
authorized or required by law or this Code.
Code II.3.a
reports, statements or testimony.
Code II.4
Code II.4.b
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 to, and agreed to by,
all interested parties.
Discussion:
The issue of conflict of interests is one of 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 of Ethics for Engineers 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. As classic example
of the Board's view early BER Cases (e.g, 59-3, 60-5, 62-7, 63-5) where the Board
strictly viewed the obligation of engineers to avoid conflicts of interest.
Over time, the Code of Ethics 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.
In recent years, the Board has considered the issue of conflict of interests in various
contexts. In BER Case 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/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 unethical 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 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 unethical 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 76-3 with one exception. In BER Case 826 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 76-3, the
engineer had an ongoing contractual relationship with the county client. However, we
noted that since rendering the opinion in BER Case 76-3, the language in the Code
had become more restrictive and therefore prohibited the engineer's actions in BER
Case 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 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 unethical 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. We 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. We
commented that in our 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, those
examples raise the appearance of a conflict of interest. In the present case, we believe
that a sufficient distance does not exist between Engineer A's relationship with the
developer and Engineer A's relationship with the state department of transportation.
The work being performed by Engineer A for the developer was very specific in
nature and the work might have some impact on the services he performed for the
state. While Engineer A fully complied with his obligations under the Code of Ethics
by promptly informing the Department of Transportation of his prior business
association, we do not believe that the disclosure of a conflict of interest to all
interested parties absolves an engineer of ethical concerns that could arise. There may
be some circumstances where a conflict is so serious and the impact so great that
disclosure alone would not be sufficient to address all ethical questions involved.
Moreover, there may be situations where the conflict may not be viewed as serious to
the affected public agency but could raise questions of ethics in the mind of the
public. Engineers need to be mindful of the impact that such situations may have upon
the dignity and integrity of the profession.
Conclusion:
It was unethical for Engineer A to accept the contract with the state's department of
transportation.
James G. Fuller, P.E.; Donald L. Hiatte, P.E.; William W. Middleton, P.E.; Robert L.
Nichols, P.E.; William E. Norris, P.E.; Jimmy H. Smith, P.E.; William A. Cox, Jr., P.E.,
Chairman
[Disclaimer]
Case 93-6
Conflict of Interest - Providing Views on Feasibility of Project
Code Citations: [II.4.a] [II.4.d]
Case Citations: [74-2] [76-3] [87-3]
Facts:
Engineer A, a professional engineer in private practice, has been retained by
Edgetown as town engineer. The Edgetown Planning Board has under review the
approval of a project being proposed by ABC Development Enterprises. Engineer A is
also being retained by ABC Development Enterprises on a separate project but that
project is being constructed in Nearwood, a town in another part of the state. The
Nearwood project is unrelated to the project under consideration by Edgetown.
Engineer A is expected to offer his views in the capacity of town engineer to the
feasibility of ABC's Edgetown project to the Edgetown Planning Board.
Question:
Would it be ethical for Engineer A to develop and report his views on the feasibility
study of ABC's Edgetown project to the Edgetown Planning Board?
References:
Code II.4.a
Engineers shall disclose all known or potential conflicts of interest to their
employers or clients by promptly informing them of any business association,
interest, or other circumstances which could influence or appear to influence
their judgment or the quality of their services.
Code II.4.d
Engineers in public service as members, advisors or employees of a
governmental or quasi-governmental body or department shall not participate
in decisions with respect to professional services solicited or provided by them
or their organizations in private or public engineering practice.
Discussion:
The role of the engineer in private practice who also serves in a capacity as an advisor
or engineer to a town or municipality raises unique ethical questions. Among the
questions raised include the extent to which the engineer's judgment in his capacity as
advisor or town engineer may be affected by interests and concerns that are relate to
the engineer's private practice.
It has been argued by some that it is impossible for the engineer who attempts to serve
in both a public and private capacity to compartmentalize his interests and not be
influenced by factors that might affect his general business practice or the interests of
other clients. Some have suggested that if an engineer agrees to serve as an advisor or
city engineer, the engineer's firm must not perform any services either as a consultant
to the city itself or any client that performs services for the city.
The Board has over the years considered several case that have raised this issue and
involve an interpretation of Code II.4.d.. For example, BER Case 74-2 involved a
state law requiring that every municipality have a municipal engineer whose duties
and compensation were to be fixed by municipal ordinance. The duties of the
municipal engineer generally consisted of attending meetings of public bodies of the
municipality, providing general advice on engineering matters, maintaining tax maps,
reviewing site plans and subdivision maps, preparing cost estimates for proposed
facilities, handling complaints from citizens on engineering-related problems and
advising on the retention of consultants for project requirements. Many of the smaller
communities in the state did not have and could not afford full-time municipal
engineers or supporting staff personnel for a full-time office. In such instances the
smaller communities retained the services of a firm in private practice and appoint a
principal of the firm as municipal engineer. The municipal engineer is paid either on a
cost-plus basis or a flat monthly retainer, usually a relatively low amount. The Board
found that because the engineer was not a bona fide "employee" of the municipality
but a consultant called a "municipal engineer", it was not unethical for him to serve as
municipal engineer and also participate in the consulting firm and provide engineering
services to the same municipality. The Board was persuaded by a belief that the
public's interest in providing the most competent engineering services, compliance
with state, and continuity of municipal engineering services would be best served by
allowing this practice.
BER Case 76-3 involved an engineer who had been under a retainer with a county for
general advisory services. While on retainer, the engineer was retained by a developer
with approval of county officials. The developer filed a petition with the county board
to rezone a substantial area of the county as commercial. The county Department of
Public Works filed several engineering reports adverse to the zoning petition,
recommending denial of the rezoning because of potential overload to water/sewage
facilities. The developer called the engineer as an expert witness at the hearing and he
testified in support of the rezoning petition. In ruling that it was unethical for the
engineer to appear for the development company while serving as an engineering
consultant to the county, the Board noted that he 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 acting as a paid advocate of a private interest in open conflict
with the engineering opinions of the county engineers.
Later, in BER Case 87-3, the Board considered a case involving an engineer
contracted by a county to inspect a project developed by the engineer's client.
Although the engineer had not performed any services in connection with that specific
project, the engineer and client anticipated that they would continue to work together
in the future. In contract negotiations, the engineer disclosed his relationship with the
client to the county. The Board concluded that it would not be unethical for the
engineer to perform building inspection services for the county in connection with the
project developed by the client. Said the Board, "To prohibit the engineer from
providing the building inspection services would be an unrealistic intrusion into her
practice and would inhibit the county from utilizing a flexible method of delivering
services consistent with the public health and safety.
We believe that based upon the facts, earlier Board precedent, and a reading of the
Code of Ethics, there would not be an ethical violation by Engineer A if he discloses
his relationship with ABC Development Enterprises. Although the facts of this case
are distinguishable from earlier Board opinions, we believe that there are elements of
each that lead us to this result. Our position is based upon a belief that it is desirable to
encourage small towns and municipalities to have access to competent engineering
services at reasonable cost. In addition, unlike BER Case 76-3, there is nothing under
the facts to suggest that Engineer A's views on the Edgetown review will be directly
affected by his relationship with ABC Development on the unrelated Nearwood
project. Finally, except as is specifically prohibited by the Code of Ethics, as the
Board has suggested, it is wholly unrealistic to interpret the Code to encourage
engineers in private practice to perform in an advisory or other capacity to
governmental bodies and at the same time bar them from performing any services as a
consultant to that body. Such a narrow view would make engineer's in private practice
hesitant to accept advisory or other roles with public entities and deprive those entities
of needed technical expertise.
We agree, however, with the notion that under circumstances as the ones found in this
case, the engineer does have an obligation under Code II.4.a. to provide disclosure to
the client. Under the facts, without such disclosure, there is a very real possibility that
the Edgetown Planning Board would not have learned of Engineer A's relationship
with ABC Development Enterprises.
Conclusion:
It would not be ethical for Engineer A to develop and report his views on the
feasibility study of ABC's Edgetown project to the Edgetown Planning Board unless
Engineer A first discloses his relationship with ABC Development Enterprises to both
clients.
Donald L. Hiatte, P.E.; William W. Middleton, P.E.; Robert L. Nichols, P.E.; William
E. Norris, P.E.; William F. Rauch, Jr., P.E.; Jimmy H. Smith, P.E.; William A. Cox, Jr.,
P.E., Chairman
*Note-In regard to the question of application of the Code to corporations vis--vis
real persons, business form or type should not negate nor influence conformance of
individuals to the Code. The Code deals with professional services, which services
must be performed by real persons. Real persons in turn establish and implement
policies within business structures. The Code is clearly written to apply to the
Engineer and it is incumbent on a member of NSPE to endeavor to live up to its
provisions. This applies to all pertinent sections of the Code.
[Disclaimer]
Case 93-2
Registration Implying Registration In Another State
Code Citations: [I.4] [I.5] [II.4] [III.3.a] [III.9.a] [Preamble]
Case Citations: [90-3]
Facts:
Engineer A, a professional engineer with expertise in mechanical systems, is a sole
practitioner in a small consulting firm in State X and has a business card indicating
that he is a professional engineer. Engineer A is not licensed in State X but is licensed
in State Y. The bulk of Engineer A's work involves work to be constructed in State Y.
Client B contacts Engineer A to design a project that will be constructed in State X.
After completing the work, Client B learns that Engineer A is not licensed in State X
but is licensed in State Y. Engineer A had not obtained any authority to perform the
services in State X. Client B must now have another Engineer either redesign the
project or carefully review Engineer A's work before sealing it. As a result, Client B
will incur additional expenses and delay in the construction of his project.
Questions:
1. Was it ethical for Engineer A to imply that he was registered in State X?
2. Was it ethical for Engineer A to design the project for construction in State X?
References:
Code Preamble
Code I.4
Act in professional matters for each employer or client as faithful agents or
trustees.
Code I.5
Avoid deceptive acts in the solicitation of professional employment.
Code II.4
Code III.3.a
misrepresentation of fact or omitting a material fact necessary to keep
statements from being misleading or intended or likely to create an unjustified

expectation, or statements containing prediction of future success.
Code III.9.a
Engineers shall conform with state registration laws in the practice of
engineering.
Discussion:
In recent years, there has been a great deal of interest generated within the engineering
community regarding the manner in which engineers in this nation are licensed from
state to state. Part of the discussion has involved a desire to eliminate the "Byzantine"
comity and reciprocity procedures that often create irrational hurdles for engineers to
become licensed in more than one state. While some have justified these procedures
as a method to screen out incompetent practitioners and maintain standards of
practice, others have argued that these procedures merely are a provincial means of
protecting and preserving engineering markets for those already licensed within the
state. However, with the increasing trend toward free trade around the world, such
arcane procedures seem out of step with the changes and the challenges faced by the
engineering profession.
The Board has recently rendered an opinion interpreting sections of the Code of
Ethics that relate to conformance with the engineering registration laws in the practice
of engineering and the obligation of engineers to become registered at the earliest
date. In BER Case 90-3, the Board considered a case involving a prominent
consulting engineer who was registered in states 1, 2, and 3 and who had on other
occasion performed forensic engineering services in connection with accident
reconstruction. The engineer was retained by an attorney in state 4 to inspect an
accident for the purpose of determining the actual cause of the accident. The engineer
was also asked to express a professional opinion during a trial on matters relating to
the safety and design of equipment which may have failed, causing the accident. In
deciding it was not unethical for the engineer to offer testimony in the manner
described, the Board noted that engineers who engage in the practice of engineering or
who hold themselves out as engineers to the public have a legal as well as an ethical
obligation to make certain that they are professional engineers licensed in accordance
with the laws of the state. While the Board indicated that a determination of this issue
must find resolution within each state on a case-by-case basis, depending on the
nature of the services provided, the language contained in the state engineering
registration law and other considerations. With respect to the narrow issue of an
individual serving as a technical expert, the Board pointed out that as a general
proposition, it was generally acknowledged that an individual may be qualified as a
technical expert by a court without possessing the minimum legal recognition as

demonstrated by a professional license.
It was also noted that both state and federal courts adhere to this rule, and thus it
would appear that unless a particular state licensing law prohibited individuals from
performing services as an expert, there would not appear to be any legal or ethical
impediment to prevent an unlicensed individual from functioning as an expert.
While in BER Case 90-3, the Board did not specifically address the particular issues
involved in this case, the opinion is instructive in that it reinforces the basic and
fundamental proposition that engineers who engage in the practice of engineering or
who hold themselves out as engineers to the public have a legal as well as an ethical
obligation to make certain that they are professional engineers licensed and practicing
in accordance with the laws of the state. While the Board concluded in BER Case 903 that it was not unethical for an engineer unlicensed in a particular state to serve as
an expert witness in that state, we believe a different result is warranted under the
facts in this case for a number of reasons.
In BER Case 90-3, we can reasonably assume that the engineer informed the attorney
who retained him that he was not licensed in the state in which he is was expected to
serve as an expert witness. Therefore, the engineer in BER Case 90-3 appears to have
done nothing to have misrepresented his credentials or to have mislead his client
(Code III.3.a.) In addition, in BER Case 90-3, the law did not impose an obligation on
the engineer to be licensed in the state in which he was expected to testify. Finally, in
BER Case 90-3, the engineer's actions did not compromise or jeopardize the interests
of the client.
In contrast to the situation in BER Case 90-3, there is no indication that Engineer A
ever informed Client B concerning the fact that he was not licensed in State X. We
believe his failure to provide timely notice to Client B was a violation of Code III.3.a..
Moreover, under the facts, it appears that a legitimate question may exist as to whether
Engineer A's representation of himself as a professional engineer in State X may have
been a violation of the engineering registration laws in State X.
Since Client B will incur additional expenses and delay in the construction of his
project, Engineer A's actions did compromise or jeopardize the interests of the client
in violation of Code II.4.
Without expressing an opinion regarding the legality of Engineer A representing
himself as a professional engineer in State X, we believe that one possible solution
under the facts would have been for Engineer unambiguously indicate on his business
card, letterhead, and promotional material that he was not licensed in State X (e.g.,
"Engineer A, P.E. (not registered in State X"). While not the only method, we believe
this approach would have been one appropriate method of handling the situation.
Finally, we think Engineer A should have first explored the option of obtaining a
temporary permit from the State X licensing board. There is nothing to suggest that
Engineer A would not be eligible for registration in State X.
Conclusion:
1. Engineer A unethically implied that he was registered in State X.
2. Engineer A acted unethically by designing a project for construction in State X
without first obtaining a temporary permit from the state licensing board and other
appropriate permits.
Donald L. Hiatte, P.E. William W. Middleton, P.E. Robert L. Nichols, P.E. William E.
Norris, P.E. William F. Rauch, Jr., P.E. Jimmy H. Smith, P.E. William A. Cox, Jr., P.E.,
Chairman
*Note-In regard to the question of application of the Code to corporations vis--vis
real persons, business form or type should not negate nor influence conformance of
individuals to the Code. The Code deals with professional services, which services
must be performed by real persons. Real persons in turn establish and implement
policies within business structures. The Code is clearly written to apply to the
Engineer and it is incumbent on a member of NSPE to endeavor to live up to its
provisions. This applies to all pertinent sections of the Code.
[Disclaimer]
[Main Page] [Index to Reference Documents] [Index to All Case
Case 98-6
Use of Slogans in Political Campaigns, etc.
Code Citations: [II.5.a] [III.1] [III.1.f] [III.2.a] [III.3.a]
Case Citations: [61-1] [74-10] [94-8]
Facts:
Situation AEngineer A, a prominent professional engineer in her community, decides to run for a
political office in Smith County and uses as her slogan the following: "Engineer A:
Engineering A Better Smith County."
Situation BEngineer B, a sole practitioner, markets himself as "The Everything Engineer" in
advertising slogans and sales promotions.
Questions:
1. Was it ethical for Engineer A in Situation A to use the slogan "Engineer A:
Engineering A Better Smith County" when running for political office?
2. Was it ethical for Engineer B in Situation B to market himself as "The Everything
Engineer" in advertising slogans and sales promotions?
References:
Code II.5.a
Engineers shall not falsify their qualifications or permit misrepresentation of
their, or their associates' qualifications. They shall not misrepresent or
exaggerate their responsibility in or for the subject matter of prior assignments.
Brochures or other presentations incident to the solicitation of employment
shall not misrepresent pertinent facts concerning employers, employees,
associates, joint venturers or past accomplishments.
Code III.1
Engineers shall be guided in all their relations by the highest standards of
honesty and integrity.
Code III.1.f
Engineers shall not promote their own interest at the expense of the dignity and
integrity of the profession.
Code III.2.a
Engineers shall seek opportunities to participate in civic affairs; career
guidance for youths; and work for the advancement of the safety, health and
well-being of their community.
Code III.3.a

misrepresentation of fact or omitting a material fact.
Discussion:
The facts in the case presented combine several sections of the NSPE Code of Ethics:
the engineers' obligation to participate and be a constructive force in public affairs
(See Code III.2.a.), and the engineers' obligation to avoid statements that are
misleading, deceptive, and causing dishonor on the engineering profession (See Code
II.5.a., Code III.1, Code III.1.f., and Code III.3.a.).
The Board of Ethical Review has evaluated cases involving the political candidacy of
engineers on at least two occasions. In BER Case 74-10, the Board considered a case
involving engineer Richard Roe, a partner in an engineering firm. Roe became a
candidate for nomination to the state senate in a primary election and, in support of his
candidacy, issued a statement on the firm stationary. The name of the firm on the
letterhead was "Richard Roe Associates". The letterhead contained the usual type of
listing of partners, their society affiliations and addresses and telephone number. In
the basic statement, Roe recites his membership in several professional societies and
in a fraternal order, his previous involvement in political activities, and experience in
planning and design of various types of public works, including reference to one
particular major project. The statement alluded to his close contact with government
and the spending of public funds. The announcement also contained the following
statement: "He feels that his training and experience will be very helpful in unraveling
some of the glaring inequities in state laws relating to employment of professional
servicesThere are more iniquities in the laws than most realize." The Board
determined that the use of the engineering firm stationary in the manner indicated to
promote the political candidacy of a professional engineer was not ethically
permissible, but that an engineer could utilize his professional affiliations,
background, and experience in promoting his political candidacy in regular political
material. Citing earlier cases, the Board noted that it is both ethical and desirable that
professional engineers be involved in political causes and be candidates for public
office (See BER Case 61-1). In seeking public office, an engineer may properly utilize
his engineering competence and background (See BER Case 61-1).
A subsequent case involved engineer Roe in which Roe, who had previously been the
mayor of a town and decided to run again, published a political advertisement in a
local newspaper urging voters to vote for Roe and against Roe's opponent, the current
mayor. The advertisement charged that many thousands of tax dollars had been spent
on engineering and consulting fees by the current mayor and that during Roe's term
only a fraction of that amount had been spent on design and consulting fees. The
Board concluded that the political advertisement utilized by Roe was not ethically
permissible.
Turning to the facts of this particular case, the Board believes that engineers who are
involved in public affairs have a special obligation to promote the public's knowledge
and understanding of engineering and not engage in gimmickry and slick sloganeering
or promotions at the expense or dignity of the engineering profession. Engineers who
run for public office should make special efforts to provide the public - a public which
in survey after survey demonstrate an almost complete lack of any meaningful
understanding of the engineering profession - with a fuller understanding and
appreciation of the accomplishments of engineers to society.
While the Board can recognize that some might object to the use of the term
"engineering" in the first context because it might be viewed as a gimmick and cause
the public to be mislead or deceived in the context in which it is used, the Board is not
of the opinion that the use of the term goes beyond the bounds of ethics and therefore
considers Engineer A's actions ethical. Nevertheless, the Board is of the view that a
more preferable approach for Engineer A would have been to avoid the use of the
slogan and to explain in great detail how her skills as an engineer would be of benefit
to the public in her role as a public official. The Board believes that such an approach
would both serve the interests of public discourse on the benefits of engineering skill
and judgment among publicly elected officials and would raise the stature and the
image of the engineering profession among members of the public. The Board has
repeatedly encouraged engineers to become more active in civic affairs, and engineers
have an obligation to do so in a professional and dignified manner.
With regard to Engineer B's use of the reference "everything engineer" in advertising
slogans to promote his engineering practice, the Board is troubled by this type of
promotional activity. For one engineer to state or imply that the engineer can perform
all areas of engineering, all disciplines of engineering, in all contexts, is misleading
and deceptive. While most state engineering licensure laws do not restrict an
engineer's practice to one specific discipline and the engineer may practice in more
than one area of competency, for an engineer to imply, in a wholly unrestricted
manner, competency and qualifications in virtually all areas of engineering practice is
beyond the realm of reason. While NSPE has long advocated the preservation of
general licensing laws to permit the greatest level of flexibility for individual
practitioners, particularly in multidisciplinary practice areas, all professional and
technical groups should be fundamentally concerned when practitioners abuse basic
professional judgment in this manner. As the Board of Ethical Review noted in BER
Case 94-8, in which a chemical engineer was found to have acted unethically because
he had designed structural footings without possessing the requisite competence,
engineers have an ethical obligation to perform services only in areas where they
possess educational background and experience or to retain individuals who possess

the necessary educational background and experience to perform the work in question.
Conclusion:
1. It was ethical for Engineer A of Situation A to use the slogan "Engineer A:
Engineering A Better Smith County" when running for political office.
2. It was not ethical for Engineer B of Situation B to market himself as "The
Everything Engineer" in advertising slogans and sales promotions.
[Disclaimer]

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Case 97-10

Payment of Referral Fee For Being Selected By Engineer

Each opinion is intended as guidance to individual practicing engineers, students and

Engineers shall not falsify their qualifications or permit misrepresentation of

be taken concerning her recommendations and that, in her professional judgment, a

and standards. While Engineer A is not an electrical or mechanical engineer, he does

guidelines for an incinerator facility at a major government installation. Following

[Main Page] [Index to Reference Documents] [Index to All Cases]

meet the regulatory requirements. Engineer A contacted the state engineering

Engineering is an important and learned profession. The members of the

Engineers shall be guided in all their professional relations by the highest

[Main Page] [Index to Reference Documents] [Index to All Cases]

Conflict of Interest - Engineer Retained by State

statements from being misleading or intended or likely to create an unjustified

technical expert by a court without possessing the minimum legal recognition as

Engineers shall avoid the use of statements containing a material

possess educational background and experience or to retain individuals who possess

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In Class Cases &amp; Verdicts

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Case 97-10

Payment of Referral Fee For Being Selected By Engineer

Each opinion is intended as guidance to individual practicing engineers, students and

Engineers shall not falsify their qualifications or permit misrepresentation of

be taken concerning her recommendations and that, in her professional judgment, a

and standards. While Engineer A is not an electrical or mechanical engineer, he does

guidelines for an incinerator facility at a major government installation. Following

[Main Page] [Index to Reference Documents] [Index to All Cases]

meet the regulatory requirements. Engineer A contacted the state engineering

Engineering is an important and learned profession. The members of the

Engineers shall be guided in all their professional relations by the highest

[Main Page] [Index to Reference Documents] [Index to All Cases]

Conflict of Interest - Engineer Retained by State

statements from being misleading or intended or likely to create an unjustified

technical expert by a court without possessing the minimum legal recognition as

Engineers shall avoid the use of statements containing a material

possess educational background and experience or to retain individuals who possess

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In Class Cases & Verdicts

In Class Cases & Verdicts