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Departing Employee Persuades Clients to Cancel Contracts with Employer

Situation

ASCE’s Committee on Professional Conduct (CPC) received a letter from the owner of a consulting engineering firm accusing a former employee of unethical conduct. The letter stated that the employee, a civil engineer and ASCE member, had recently left the owner’s consulting firm without notice and had persuaded several of the firm’s clients to terminate their contracts with the firm and retain him to finish the work. The owner alleged that the employee had actively solicited the firm’s clients to make this move while still employed at the consulting firm, actions that “set the stage” for his abrupt departure and move into private practice. Believing that the engineer had exerted “undue influence” on the firm’s clients, the owner requested that the CPC investigate the matter and noted that he had already filed a complaint with the state licensing board.

Question

Did the engineer’s actions in persuading clients of his employer’s firm to cancel their contracts with the firm and follow him to his private practice violate ASCE’s Code of Ethics? 

Discussion

The CPC considered this complaint in the light of canon 3 of the code, which at the time of the investigation dictated that no ASCE member was to “attempt to supplant another engineer in a particular engagement after definite steps [had] been taken toward his employment.” While this canon was subsequently removed from the code because of concerns that it might be seen as unlawfully prohibiting price competition (see  the March 2007 column for more information), it is interesting to note that the former employee’s conduct might still constitute an ethics violation under the code as it exists today.

Canon 4 of the code 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.” This canon underlines the engineer’s duty to be loyal to his or her employer, as well as an obligation to act in the best interests of the employer, without regard to personal interest.

When contacted by the CPC, the member denied having persuaded his former employer’s clients to cancel their contracts with the employer’s firm. He admitted that he had left the consulting firm without notice but contended that he had done so only because of the owner’s long-standing failure to fulfill a number of promises made to him as enticement to join the firm. The employee said that he had taken away only a small number of assignments in which he had been heavily involved and that the clients in each instance had expressly asked him to continue as their engineer until the work was completed.
A significant hurdle in the CPC’s investigation of this case was the absence of any disinterested sources of information. The majority of “evidence” submitted consisted of letters from the complaining party and the accused member, each replete with heated language and charges of unprofessional conduct. One of the clients involved in the controversy reconsidered its decision to give work to the employee and reestablished a contractual relationship with the consulting firm. Other clients supported the employee, citing his familiarity with the work and his availability as reasons for transferring their assignments to him.

After examining the available information at length, the CPC determined that it was unable to establish the truth of either party’s account of the circumstances. The members of the CPC felt that the evidence presented was insufficient to establish a finding that anyone had violated the Code of Ethics. The CPC voted to dismiss the complaint and to send a letter to both parties notifying them of its decision and stating its belief that neither party had acted in a way that was wholly appropriate.

Some employers attempt to address such issues as this at the very onset of an individual’s employment by means of a noncompete agreement. While many courts, citing a public policy against restricting a person’s future employment opportunities, are reluctant to enforce these agreements and while potential employees may be put off by the requirement to sign one, a well-written agreement can be useful in making it clear to both parties what is expected of the employee after the end of the employment relationship. The best noncompete agreement is one that is narrowly tailored to the company’s reasonable needs, both from the employee’s perspective, to prevent an agreement that could threaten his or her livelihood after employment, and from the employer’s perspective, to limit the possibility that a court of law may decline to enforce an agreement seen as overly broad.

In the absence of a noncompete agreement, engineers leaving a place of employment are encouraged to remember that their ethical obligations to their employers require proper treatment of the employers’ proprietary information and resources, along with disclosure of any conflicts of interest.

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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