Disclosure of Confidential Information from one Competitor to Another
Earlier this year, Texas Tech University’s National Institute for Engineering Ethics released an ethics dvd entitled Henry’s Daughters. This 32-minute film dramatizes a case study involving numerous ethical dilemmas and concerns and is supplemented by discussion questions and other training materials designed to make the dvd an effective educational tool. This month’s column focuses on one of the situations depicted in Henry’s Daughters and explores the questions it raises from the perspective of ASCE’s Code of Ethics.
A state department of transportation (DOT) has awarded two grants for the purpose of funding a yearlong “smart highway” research and development project. The project is organized as a competition between the two recipients; each is to prepare design specifications for an automated highway and car control system, and at the end of the year the DOT will award one recipient a $25-million contract to implement its design. To ensure the integrity of the competition and to protect each team’s intellectual property, the four DOT staff members assigned to this project are split equally between the grant recipients, each staff member providing help and input only to his or her team.
Laura, a licensed professional engineer, is the project manager for the DOT’s smart highway project; her responsibilities include overseeing the four staff members assigned to the grant recipients as well as making recommendations to the DOT commissioner regarding the final award. Her younger sister, Julie, has recently accepted an internship with OUTOCAR, a small start-up company that received one of the two state grants. The other grant recipient is guideme, a large, well-established design firm that is a major client of the sisters’ father, Henry, a semiretired lobbyist and engineer.
Laura and Julie are roommates, and during the yearlong project they frequently discuss their work. In one such conversation, Laura gives Julie a brief look at a computer program the guideme team has submitted for her review, a traffic flow modeling program intended for use with the guideme design system. In her comments, Laura makes it clear that she is impressed with the program’s functionality.
Although Julie’s team has been focusing exclusively on designing an autonomous car rather than a central server system, Julie tells her older sister that the outocar team is currently “working out the bugs” on a similar program of its own. Shortly thereafter, Julie begins work on outlining a comparable traffic modeling program for use with the OUTOCAR vehicles. She submits parameters for this model to outocar’s programming team, and the new program is completed and submitted as part of outocar’s final submission to the DOT.
Did Laura’s and Julie’s actions in connection with the guideme computer program violate ASCE’s Code of Ethics?
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.” Laura’s close family connection to an employee of one of the two grant recipients represents a potential conflict of interest. In a factual case such as this, Laura would have had an ethical obligation to disclose this conflict to her employer, and it is likely that she would not have been assigned authority over the project. Assuming, however, that Laura was permitted to serve as the DOT’s project manager, canon 4 would have imposed a further obligation on her to serve as a faithful agent for her employer despite that potential conflict of interest.
The DOT had designed this project as a competition between two entities and had taken steps to protect each team’s proprietary materials and to prevent intermingling of information. But instead of honoring her employer’s purposes in establishing the competitive process, Laura disclosed confidential information received from one competing entity to an employee of the other. Whether she consciously intended to favor a family member’s interest over her employer’s or was simply careless about preserving confidentiality, Laura failed to fulfill her ethical obligation to act as a faithful agent or trustee for her employer and thereby violated canon 4.
Furthermore, canon 5 of the code has this to say: “Engineers shall build their professional reputation on the merit of their services and shall not compete unfairly with others,” and category (e) in the guidelines to practice for this canon adds the following: “Engineers shall give proper credit for engineering work to those to whom credit is due, and shall recognize the proprietary interests of others.”
The development of the guideme design system involved proprietary information belonging to a competitor for the DOT contract, and this information was shared with Laura during the research project solely as a function of her role as the DOT project manager. Instead of protecting the company’s proprietary interest in this system, Laura shared the contents of the program with a person employed by guideme’s competitor, and that person then used the information in creating a competing product for her employer. Julie’s actions in using the unauthorized disclosure of proprietary information to gain an unfair competitive advantage may well have constituted a violation of canon 5. Indeed, the same can be said for the actions of both sisters in failing to respect the proprietary interests of the guideme system’s creators.
While the focus of this article is on ethical concerns, it is important to note that Laura’s and Julie’s actions could have significant legal consequences as well. A number of intellectual property and unfair competition laws exist at the federal and state levels to protect a party’s proprietary information, and actions such as Julie’s could give rise to civil liability under those laws. What is more, state employees such as Laura are likely to be subject to a number of statutory codes of conduct and regulations governing the procurement process, and Laura’s disclosure of confidential information received by virtue of her state employment may have violated one or more of those laws.
The questions raised by this scenario represent only a sample of the many legal and ethical issues highlighted in Henry’s Daughters. The dvd also covers improper payments, political contributions, workplace harassment, conflicts of interest, individual privacy rights, and lobbying. Those interested in learning more about this training program or obtaining a copy of the DVD and its related resources may contact the National Institute for Engineering Ethics by e-mail at firstname.lastname@example.org, by phone at (806) 742-3525, or by visiting its Web site: www.niee.org.
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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