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Departing Employee Recruits Employer’s Clients, Criticizes Employer

Situation

The president of an engineering consulting firm files a complaint with ASCE’s Committee on Professional Conduct (CPC), claiming that a departing employee abused his position with the firm in preparing to establish a private practice. The employer contends that the employee used company time and resources to prepare marketing materials and handle logistical details for the start of his business. Even more significant, the president alleges that the departing employee contacted several of the firm’s regular clients to inform them that he was leaving to start his own practice and to express his “grave concerns” about the firm’s financial viability and his belief that it would be unable to deliver an acceptable level of service to its clients after he left.

Question

Did the ASCE member’s actions in using company time to support his personal business interests and in making invidious comments to his employer’s clients about his employer violate ASCE’s Code of Ethics?

Decision

This case was brought before the CPC in the late 1960s, before a  comprehensive revision of the Code of Ethics expanded its focus from simply business ethics to a broader range of professional conduct. Because of the older code’s narrow focus on business practices, the conduct described by the employer touched on nearly every canon of the Code of Ethics. The CPC chose to focus its investigation on three canons. The first was canon 1, which at the time read as follows: “It shall be considered unprofessional and inconsistent with honorable and dignified conduct and contrary to the public interest for any member of the American Society of Civil Engineers to act for his client or for his employer otherwise than as a faithful agent or trustee”; the second was canon 5, which dealt with any “attempt to injure, falsely or maliciously, the professional reputation, business, or employment position of another engineer”; and the third was canon 8, which concerned itself with the “use [of] the advantages of a salaried position to compete unfairly with other engineers.”

The accused member flatly denied making use of company time or resources in preparing to establish his own practice. With respect to his contact with his employer’s clients, he stated that he had contacted only a few clients with whom he had worked closely in order to inform them of his departure. He claimed that he had not attempted to solicit work from his employer’s clients, that any concerns about the firm’s technical or financial capabilities had been raised by the clients, not by him, and that by giving his honest assessment of the firm he felt he was acting in the best interests of the clients.

The CPC reviewed written statements from the firm’s president and the accused member and conducted lengthy interviews with the parties as well as with other staff members and past and present clients of the firm. Based on their investigation, the committee members were not persuaded by the employee’s claim that he had acted without malice or improper motive. Believing that the member had abused his position and made false statements about his employer in the hope of soliciting work for his nascent practice, the CPC found that the member had violated canons 1, 5, and 8 of the code, and it recommended to the Board of Direction that he be expelled from the Society.

The board contacted the member to set a date for a hearing on the matter, but before the case could be heard the member filed a motion in state court for an injunction against the Society. Claiming that the proposed action would cause “irreparable harm” to his career, that the decision had been made arbitrarily, and that he had not been given proper notice or an opportunity to present a defense, the member asked the court to bar the Society from taking any further action in the matter. ASCE responded, arguing that the CPC’s activities had been conducted in accordance with procedures spelled out in the Society’s bylaws and that the entire process had been designed to ensure a fair, impartial hearing in response to an ethics complaint. After a lengthy debate, the court agreed, ruling to set aside the injunction. The Board of Direction proceeded to a hearing, upheld the CPC’s findings, and imposed a five-year suspension on the member.

While this case was disposed of at the injunction stage, a number of other professional societies have been called on to defend their enforcement of ethics provisions at trial. Courts have generally been reluctant to intervene in the disciplinary actions of voluntary societies, however, viewing ethics enforcement as part of a contractual arrangement that a member agrees to when joining a professional society. Moreover, as the U.S. Court of Appeals for the Seventh Circuit noted in 2001 in Austin v. AANS, courts believe that, in the absence of bad faith or prejudice by the professional society, “professional self-regulation rather furthers than impedes the cause of justice” and that professional societies have an interest in ensuring that an unethical person is unable to “use his membership to dazzle” an unsuspecting client or customer.


 

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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