By Tara Hoke
This hypothetical is based on a 2011 California court case, Oasis West Realty v. Goldman, 51 Cal. 4th 811. While the professional in that case was an attorney, the ethical issues raised can easily be applied to engineering practice and pose an interesting question about an engineer's ethical obligations to former employers and clients.
Situation
A real estate developer undertakes a project to redevelop a large parcel of land in one of Southern California's most affluent areas. The plan entails replacement of the aging hotel on the property with a new five-star facility and luxury condominiums. Projects of this nature require the city council to approve an environmental impact assessment, so the developer contracts with a local consulting firm to spearhead the report's creation.
The firm assigns the project to one of its senior employees, who is a civil engineer and an ASCE member. The engineer resides in a neighborhood near the project site and is active in local community affairs. He is well-known by members of the city council and local residents, and his past opinions on development projects have proved to be influential with both groups. Because of his experience and personal connections, the firm believes that the engineer will be invaluable in securing the necessary approvals from the city council.
But halfway through the preparation of the assessment, the senior engineer abruptly resigns. The task is assigned to another employee and ultimately submitted to the city council without issue. For the next two years, the consulting firm and the developer work with the city council as it reviews the copious studies included in the report, conducts a dozen public hearings, and receives commentary from hundreds of concerned citizens. Finally, the city council certifies the report and adopts a series of resolutions designed to advance the project toward final approval.
Upon notice of this action, local opponents of the project establish a political action committee and circulate a petition seeking a voter referendum to overturn the city council's decision. Among the leaders of this group is the consulting firm's former employee, who canvasses his neighborhood to collect signatures and distribute flyers opposing the project.
Bearing the engineer's name and contact information, the flyer expresses outrage that the project adds a 15-story hotel and two multistory condo towers to "one of the busiest intersections on the entire west side," and that the council had "even allowed the developer to remove one of the floors of parking they had previously agreed to add." It accuses the city council of being driven solely by the desire for more revenue and claims the council did not make plans to correct "the awful intersection and the lines of waiting traffic that will grow and grow." The flyer concludes by noting that the writer had signed a petition opposing the project and urging readers to do the same.
While the citizens' committee is successful in getting a referendum on the next ballot, a narrow margin of voters ultimately endorses the city council's decision. Incensed at the threat to the project and the unexpected costs spent to boost public support and defeat the referendum, the developer sues the engineer and his former employer, alleging professional negligence and breach of fiduciary duty.
The developer claims the engineer abused his status as a former consultant on the project and used confidential information obtained during his services to undermine the developer's plans and advance his personal interests. The engineer denies he used any confidential information in support of his efforts and says that at no time during the campaign had he even mentioned his service on the project. He asserts that his campaign work was undertaken purely in a personal capacity and invokes his First Amendment right of free speech.
Question
If this had been an actual case involving an ASCE member, would his actions violate the ASCE Code of Ethics?
Discussion
Fundamental Canon 4 of the ASCE Code of Ethics reads: "Engineers shall act in professional matters for each employer or client as faithful agents or trustees, and shall avoid conflicts of interest." While in most cases this obligation is deemed to apply only to current employers or clients, at least one important duty is likely to apply even to past employers or clients--the duty of confidentiality.
The successful delivery of engineering services is often dependent on an engineer's knowledge of sensitive information about a client's activities, and the trust needed to facilitate this exchange would not arise if an engineer could escape all duty of confidentiality simply by walking away from the engagement. While ASCE's express language on this issue is a bit narrow, banning the use of confidential information only "as a means of making personal profit," this provision should be more broadly construed as prohibiting engineers from making any harmful use of such information for personal benefit. As such, if the engineer had indeed used confidential information from a client to support a personal aim to defeat the project, it is likely this would violate his ethical obligations under Canon 4.
A second ethical question arises regarding conflicts of interest. Guideline a under Canon 4 says, "Engineers shall avoid all known or potential conflicts of interest with their employers or clients and shall promptly inform their employers or clients of any business association, interests, or circumstances which could influence their judgment or the quality of their services." In this case, the employer knew the engineer lived in an area likely to be impacted by the project, but it is questionable whether the engineer made clear to his employer or client the strength of his opposition to it. And while there is no indication that the quality of his work was impacted, full disclosure of his personal conflict might still have affected the employer's determination of his suitability for the work. If it was found that the engineer failed to make adequate disclosure of his personal conflict, this would support a second finding that he had violated Canon 4.
A third potential question reflects the truthfulness of the engineer's potentially contradictory statements. If the engineer, while employed by the firm, had prepared statements about the project's impact that the engineer himself did not support, this might raise questions about his compliance with Canon 3's requirement of "objective and truthful" professional reports. Conversely, if the engineer's truthful professional judgment was that the project did not pose undue impact to his neighborhood, his later statements could be deemed to be "maliciously or falsely" attacking his former employer's work, raising concerns under Canon 5.
Even assuming a set of facts most favorable to the engineer--i.e., he took the work in good faith, stepped down upon realizing he could not personally support the project, and betrayed no confidences--the engineer's actions do not entirely evade ethical scrutiny. Professional ethics is often as much about perception as reality. Given his involvement in the project, the engineer should have recognized the risk that the former client would interpret his public opposition as a breach of trust or confidentiality. Moreover, if members of the public had learned of his connection to the project, they too might have concluded that his opposition stemmed from insider knowledge gained during his employment. In either case, the appearance of a breach of confidential information could be every bit as harmful as an actual breach. For this reason, the most ethically sensible action would have been to avoid giving public voice to his personal criticisms of work on which he had performed professional services.
In the case on which this scenario is based, the accused attorney faced a slightly different test, because the ethical codes for attorneys include an express obligation to former clients: Attorneys may not represent any party who is adverse to a former client on the same matter for which the attorney once represented that client. While the attorney tried to defend his actions by noting that he was acting for himself and not representing another client, a California appeals court held that the ethical provision meant attorneys could not advance any argument that would "injuriously affect" a former client on the subject of the attorney's representation. The court found that the attorney's First Amendment rights did not trump this ethical obligation and remanded the case back to a lower court for trial. The parties later settled out of court.
Tara Hoke is ASCE’s general counsel and a contributing editor to Civil Engineering.
© ASCE, ASCE News, December,2019
