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May 2013

Employers' Responsibility to Employees

Situation:

ASCE’s Committee on Professional Conduct receives a letter of complaint from five engineers, alleging ethical misconduct in connection with their recently terminated employment at a large design and construction firm. Past successes and a reputation for quality had enabled the firm to expand its operations to several offices in the New England area, but now a recent economic downturn had greatly diminished the firm’s business.

In response to the firm’s growing financial concerns, the firm’s principal—an ASCE member and professional engineer—decides to close one of the firm’s less-profitable offices. Most of the office’s support and technical staff is let go, and the remaining professionals are offered a transfer to the firm’s headquarters, some fifty miles away from their current location.

The firm’s employee handbook provides that, in cases of an involuntary transfer, the firm will provide a relocation allowance for impacted employees. Such involuntary transfers must be to a location a minimum of 35 miles from the employee’s residence, and the reassignment must be for a duration in excess of 12 months. The handbook also outlines a sliding scale of benefits extended to employees who are terminated due to a reduction in force. Based on the employees’ length of services, this scale provides for severance pay as well as continued life and medical insurance for the departing employee.

Despite the language of the company handbook, the firm announces that relocation expenses will not be provided to transferred employees. Instead, it offers to facilitate a van pool for employees traveling to the new location, which will be operated on an employee cost-share basis.

Displeased by the prospect of a significantly greater commute, and with no offer of relocation expenses on the table, five of the firm’s employees decline the transfer. As their departure is owing to an overall reduction in force, the departing employees expect to receive an offer of severance pay and benefits based on their length of service, which ranges from five to almost thirty years at the firm.

The firm disagrees. In a letter to the departing employees, the firm’s principal advises that the employees’ rejection of the new assignment has been deemed a voluntary resignation from the firm, and that they are therefore not entitled to any amount in severance pay or extended insurance coverage. 

Question:

Did the member’s actions in denying specified benefits to employees in connection with an office closure, in apparent conflict with the firm’s stated policies, violate the ASCE Code of Ethics?

Decision:

Perhaps the most little-used provision of the ASCE Code of Ethics, Fundamental Canon 7 states in part that “Engineers… shall provide opportunities for the professional development of those engineers under their supervision.” While most of this canon’s guidelines are aspirational in nature—engineers “should” encourage employees to attain professional licensure and to participate in technical societies—guideline d provides one mandatory provision: “Engineers shall uphold the principle of mutually satisfying relationships between employers and employees with respect to terms of employment including professional grade descriptions, salary ranges, and fringe benefits.”

The complaint submitted by the five departing employees represents an unusual chance for ASCE’s Committee on Professional Conduct (CPC) to explore the application of guideline 7(d).
While ethics complaints concerning employer conduct are not uncommon for the Committee, many are more readily addressed by other provisions of the Code. Claims of defamation, for example, are covered under Canon 5, guideline g’s prohibition on “maliciously or falsely” injuring an engineer’s practice or employment, while whistleblowers may seek redress through Canon 6’s language on fraudulent or corrupt behavior. Still other complaints of employer misconduct are more suited to resolution in a legal setting, where state and federal law has established procedures for addressing matters of employee wages, medical leave, and similar rights. Though the language of 7(d) makes it clear that employers have some ethical obligation of fair dealing with their employees, it is less clear at what point a failure to honor “mutually satisfying relationships” rises to the level of unethical behavior.

When contacted by the CPC, the firm’s principal is quick to note that the handbook’s language on relocation is described as a “procedural” document only, and that it is expressly stated that the document is not a contract. He further contends that the 35 mile requirement established in the document is only a “minimum” distance for consideration, and that it does not mean that all persons meeting that requirement will receive a relocation allowance. He further opines that the average commute times, which ranged from 50-60 minutes in the morning to 75-90 minutes during the evening hours, are not so substantial as to require relocation.

With regard to the subject of severance pay, the principal states that the reduction-in-force language of the handbook applied only to the employees who were not offered a transfer to the new location, and that all of those individuals received severance pay as outlined in the employee handbook. By contrast, he claims, not only had the firm been willing to continue the complainants’ employment, it had been harmed by their decision not to accept the transfer. He notes that the five departing engineers had been integral to the firm’s work on several long-term projects, and that work on these projects had suffered during the firm’s scramble to hire replacements.

Upon review of the statements and documentation provided by the parties, the CPC felt that the circumstances were too subjective to support a case against the employer. In their view, a strong indication of “bad faith” or “improper motive” on the employer’s part was necessary to sustain a violation of guideline 7(d), and absent such a finding, the issues in dispute were more legal than ethical in nature. Accordingly, the CPC voted unanimously to dismiss the complaint, noting in their letters to the party that their decision was intended to show neither approval nor disapproval of the employer’s conduct.

While the facts of this particular case did not support disciplinary action, it nevertheless serves as a reminder that an employer’s actions concerning his/her employees should be guided not only by legal requirements and restrictions but also by ethical principles. It is not only sound management but also a professional duty for engineer employers to provide a fair and equitable workplace, and to treat their employees with dignity and respect. Moreover, recognizing that the engineer’s fundamental obligation is to serve the benefit of humanity, engineers in an employer setting can most effectively advance that objective by making a positive contribution to the development and practice of the professionals in their employ.


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, that some details may have been altered for purposes of illustration or confidentiality, and that the general summary information contained in these case studies is not to be construed as a precedent binding upon the Society.

Tara Hoke is ASCE’s assistant general counsel and a contributing editor to Civil Engineering.

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