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September 2011

Ethical Merits Then and Now

Situation

An independent newspaper in a major U.S. city runs an advertisement for a local engineering firm. The newspaper is a free publication distributed on a weekly basis in public transportation facilities, street boxes, and retail areas throughout the city, and the firm’s advertisement is a spread at the center of the paper. The advertisement offers services for the planning, design, and construction of commercial and residential projects and provides a coupon that can be clipped offering a discount of $1,000 for any project valued at $50,000 or more.

The advertising spread also features a picture of the firm’s owner and a whimsical interview in which he shares his thoughts on a range of subjects from politics to marriage. Here are some examples:

  • “Ask not what good your country can do for you; ask what harm the lousy turkeys you vote for can do to you.”
  • “Behind every great man there are two great women. The first carries him around before he is born, and the second bosses him around after he is grown.”
  • “In order to show people how to be modest and humble, I never brag about being the biggest genius in America.”
  • “Without the engineer, this world would be but bare wilderness; while God is the Greater Engineer, the engineer is the smaller god.”

At the time these ads were placed, the firm’s owner was a professional engineer and an ASCE member, and copies of the newspaper were forwarded to ASCE’s Committee on Professional Conduct (CPC).

Question

Did the owner’s actions in placing this advertisement in a city newspaper violate ASCE’s Code of Ethics?

Decision

Ethical restrictions on advertising have often been a heated point of contention between such professional societies as ASCE and government agencies that enforce federal antitrust laws—that is, the Federal Trade Commission and the Department of Justice. This case, which was brought before the CPC some 30 years ago, presents an opportunity to examine the effects of antitrust law on professional ethics and to explore how past and present versions of ASCE’s Code of Ethics might treat the same set of facts differently.

At the time this case was decided, category (f) in the guidelines to practice for canon 5 read as follows: “Engineers may advertise professional services in a way that does not contain self-laudatory or misleading language or is in any manner derogatory to the dignity of the profession.” Category (a) for that canon stated that engineers “shall not give, solicit, or receive either directly or indirectly, any commission, political contribution, or a gift or other consideration in order to secure work.” Finally, category (e) in the guidelines to practice for canon 3 had this to say: “Engineers shall be dignified and modest in explaining their work and merit, and will avoid any act tending to promote their own interests at the expense of the integrity, honor, and dignity of the profession.”

The members of the CPC felt that the advertisement in question raised questions under each of these guidelines. In their opinion, the general tone of the advertisement might be described as “self-laudatory” or inconsistent with the “integrity, honor, and dignity of the profession” and thus would be in violation of canons 3 and 5. The members also believed that the $1,000 coupon could constitute a “gift or other consideration” to secure work, which was proscribed by category (a) in the guidelines to practice for canon 5. The CPC contacted the member to inform him that a case had been opened and invite him to submit a written response in his defense. Instead, the member advised the committee that he was surrendering his membership in the Society. ASCE’s bylaws provide that the resignation of a member who resigns following notice of a pending ethics investigation shall be accepted “with prejudice,” meaning that the member may not rejoin unless his or her application is approved by a two-thirds vote of the Executive Committee of ASCE’s Board of Direction.

If this case were brought before the CPC today, the assessment would probably differ in a number of respects. The decades since this case was opened have seen numerous administrative and judicial actions on the subject of advertising ethics and antitrust law, and these actions have led to changes in ASCE’s Code of Ethics and in the way it is enforced.

Early versions of ASCE’s Code of Ethics, as well as the codes of other societies in engineering, law, and medicine, reflected the opinion that competition for professional work should be based on the professional’s knowledge and qualifications for the particular task. These societies believed that advertisements attempting to attract work through, for example, price incentives, promotional ploys, or other “undignified” forms of marketing distracted consumers from the quality of the professional’s work and thus were inconsistent with the goal of serving the public good. As a result, many professional societies imposed ethical restrictions on the advertising activities of their members.

Conversely, federal agencies charged with enforcing antitrust law operate on the premise that price-based competition and the free flow of information in the marketplace are beneficial to consumers because they force vendors to compete for business by continually striving to offer new and better services. These agencies believe that freedom of advertising is an important element in support of market competition and that price information, promotional materials, discounts, and even “puffery” help consumers make informed choices and thus should not be subject to restriction other than the requirement that the advertising be free of false or misleading information.

Beginning in the late 1970s, the Federal Trade Commission and the Department of Justice took action against numerous professional societies on the grounds that their codes of ethics violated the Sherman Antitrust Act, which prohibits agreements “in restraint of trade or commerce.” The agencies contended that, by imposing ethical restrictions on the types of information a professional could include in advertising materials, the societies were compelling their members to agree to practices that made it difficult for consumers to avail themselves of professional services on the basis of price or other factors.

As a result of the increased activity by federal agencies in the area of advertising restrictions, ASCE made a few small but significant changes to its Code of Ethics in the early 1990s. Category (a) in the guidelines to practice for canon 5 was amended to replace the prohibition on “a gift or other consideration in order to secure work” with a prohibition only on “gratuities or unlawful consideration.” Category (f) in the guidelines for that canon was revised to strike all language prohibiting “self-laudatory” language and to place more emphasis on the accuracy and honesty of advertising language.

The effect of these changes was to make it clear that price incentives such as the member’s $1,000 coupon are not unethical under ASCE’s Code of Ethics. Moreover, an advertisement that reflected a “self-laudatory” tone would probably not be an ethics violation in and of itself. ASCE still strongly advocates qualifications-based selection of engineering services, and the current Code of Ethics still cautions that advertisements should not detract from the dignity of the profession. However, the CPC would probably consider advertisements of the type appearing in the newspaper spread in the context of federal antititrust law and the existing guidance about the importance of the “free flow of information.” Thus, if a case such as this were brought before the CPC today, it is likely that the committee’s decision on the ethical merits of the member’s conduct would depend on whether the advertisement was false or misleading.

Members who have an ethics question or would like to file a complaint with the Committee on Professional Conduct may call asce’s hotline at (703) 295-6061 or (800) 548-asce (2723), extension 6061. The attorneys staffing this line can provide advice on how to handle an ethics issue or file a complaint. Please note that individual facts and circumstances vary from case to case and that the general summary information contained in these case studies is not to be construed as a precedent binding upon the Society. 

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