By Tara Hoke
Situation
A small East Coast city retains an engineer to design a new municipal facility with the understanding that the design must lend itself to construction within the limits of the city's modest budget. The engineer prepares a design, but when the project is put out for bids the city is dismayed to find that the bids are almost twice the desired cost. Relations between the city and the engineer quickly sour, and the city demands a design that would cost less to build, whereas the engineer insists that the requested changes do not comply with existing codes. Ultimately, the city dismisses the engineer and hires a new firm to redesign the facility.
The bad blood between the city and the engineer is such that the dismissed engineer refuses to provide the new firm with an electronic copy of his drawings without a comprehensive waiver of claims from the city. In lieu of the requested files, an employee at the successor firm creates an electronic copy using the engineer's sealed documents, makes the requested revisions on this copy, and then sends the revised drawings out for bids, leaving the original engineer's seal on the amended documents.
When the original engineer learns that the successor firm has modified his drawings and sent them out under his professional seal, he files a complaint with the state licensing board, naming not only the employee who made the revisions but also that employee's supervising engineer and the firm as a whole.
What might seem to be a fairly straightforward complaint to the state licensing board, however, is complicated by the fact that one of the corporate officers of the firm in question is a member of the board. He discloses this conflict and recuses himself. The other members of the licensing board conduct a public hearing in which they vote unanimously in favor of tough sanctions: heavy fines for each of the parties named in the complaint and a one-year suspension for the supervising engineer.
Yet despite this public display of disapproval, the members of the licensing board are reluctant to impose heavy sanctions on their colleague's firm. The board chair convenes an "executive session" (a private meeting open only to members of the board and attended by all except for the member who recused himself), and after this meeting the board sends a letter to the parties involved informing them that it has revised its earlier decision. It reduces the supervising engineer's suspension to a six-month probation and reduces the fines to a fraction of their original amounts.
Furthermore, the board sends the complainant an administrative order noting that because he failed to cooperate with the city in handing over the project and attempted to "dodge responsibility" by seeking a blanket waiver of claims, the board felt that he violated the state's professional code of conduct. It informs him that he is being placed on probation pending payment of a small fine and attendance at a mandatory ethics workshop.
A dissenting member of the licensing board sends a letter to the state attorney general's office expressing his profound disagreement with the board's action. In the letter he professes his belief that the chair and other members "had placed friendships above enforcement of the law," that they had "no discernible reason" for reducing the sanctions against the firm or its employees, and that the action against the complainant was a "clear case of retaliation for [his] bringing forward the complaint." He sends a copy of this letter to the original complainant, who in turn files suit against the state board.
Reports of the dramatic series of events are published in local newspapers, and numerous engineers contact the state to demand the resignation of the board chair, who is an engineer and ASCE member. Copies of the newspaper accounts are forwarded to ASCE's Committee on Professional Conduct, which in turn opens an investigation.
Question
Did the chair of the state board violate ASCE's Code of Ethics through his actions in addressing the complaint?
Discussion
Canon 4 of the Code of Ethics reads as follows: "Engineers shall act in professional matters for each employer or client as faithful agents or trustees, and shall avoid conflicts of interest." While the language here refers only to clients and employers, this canon has commonly been understood to impose an ethical obligation of "faithfulness" in any professional relationship involving a close degree of trust. One such example arises when an engineer serves on a governing board of a public entity, a nonprofit organization, or a private corporation.
Membership on a board is said to create a fiduciary relationship in which the board member (as fiduciary) has a heightened degree of responsibility to the beneficiary, namely, the company, society, or constituency served by the board. Above all, this fiduciary role requires the board member to perform his or her duties in a good faith belief of acting in the best interests of the beneficiary. When a board member has a personal or professional interest that conflicts with the fulfillment of that role, he or she has an ethical obligation first to disclose that conflict to the board and second to remove himself of herself from deliberations that may be influenced by such conflict of interest.
Conflicts of interest most commonly arise when the professional has another direct financial or emotional tie, for example, when a board decision might harm his or her business or that of a close family member. In the case presented here, the most obvious conflict of interest was that involving the firm's principal, whose service to the board was clearly at odds with his interest in seeing that his firm was spared a costly fine or harsh penalty. As we have seen, the principal recused himself, and there is no direct evidence to suggest that he then attempted to influence his colleagues' decision or otherwise violated his obligation to the board.
Yet, as this case demonstrates, bonds of friendship or collegiality can also challenge a professional's ability to render faithful service to a board. If the board's chair had allowed his personal friendship with the principal to supersede his willingness to uphold the board's rules, then his actions probably would have been in violation of both his fiduciary duties and his ethical obligations under canon 4.
Although a number of legal irregularities were evident in the board's actions, including questions of compliance with the state's open meeting laws and the sufficiency of its process in deciding to sanction the complainant, the Committee on Professional Conduct still had only the dissenting board member's opinion to suggest that the chair was unduly influenced by his friendship with his colleague. Conversely, other news reports offered the chair's position that the reduced penalties were made not from improper motives but rather for numerous other reasons, including a review of penalties assessed in past cases and the recommendations of legal counsel regarding the severity of the ethical breach.
The Committee on Professional Conduct decided to table the case, hoping that the pending litigation would produce more evidence regarding the board member's conduct or the motives behind the board's decisions. However, it soon learned that the complainant's legal case had been hastily settled. As no further information was provided in the press or by any of the parties involved, the committee ultimately had little choice but to close the case without action.
Despite its inconclusive ending, this case offers a valuable lesson on the appearance of objectivity. Even if the board members did in fact render their decision in good faith, their questionable choices exposed the board to months of unfavorable attention and probably lessened its credibility in the eyes of its licensees and the public at large. Therefore, given the importance of board members' fiduciary and ethical responsibilities, it is essential for them to ensure that through transparency and consistency their actions not only serve but also are perceived as serving the interests of those who entrusted them with that role.
Tara Hoke is ASCE’s general counsel and a contributing editor to Civil Engineering.
© ASCE, ASCE News, October, 2016
