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Self-Regulation Is Not without Ethical Challenges

Dec 1, 2014


Situation

Engineers in a large western state submit complaints to the state's board of professional engineers about the poor quality of home inspections within the state, which does not have a licensure requirement for home inspectors. The board in this hypothetical case consists of seven licensed professional engineers and one nonengineer, all of whom are elected by a vote of the licensees to serve a three-year term on the board. In addition to their part-time service on the licensing board, each of the engineer members is the principal of a private engineering firm, and each of these firms derives a significant amount of revenue from home inspection services.


After reviewing the complaints, the members of the board issue an opinion that home inspection forms part of the practice of engineering. In support of this notion, they cite a section of the state code that describes engineering as including "consultation, investigation, evaluation, or review of material and completed phases of work in a structure or building." Accordingly, the board rules that all home inspections within the state must be undertaken by a licensed professional engineer, and it sends more than 100 letters to unlicensed home inspectors in the state ordering them to cease and desist from their provision of this service.


The Federal Trade Commission takes administrative action against the board, stating that in seeking to prevent those who are not engineers from carrying out home inspections its members are conspiring to suppress market competition in violation of federal antitrust law. 


Question

Would the actions of the licensing board members violate ASCE's Code of Ethics?

Discussion

The role of self-regulation has long been recognized as one of the distinguishing characteristics of a profession. Once reserved for physicians, lawyers, and members of the clergy, the term "professional" now applies to a larger circle and includes engineers, architects, surveyors, accountants, and airline pilots, among others. While the types of services they render vary greatly, all of these professions have two features in common. First, the members of the profession are expected to demonstrate mastery of a complex and specialized body of knowledge. Second, and perhaps most important, the members are expected to apply that specialized knowledge "in the spirit of service"; that is, they are to use their expertise to reward the trust of their clients and to benefit the public at large, even if this course of action runs counter to their personal interests.

Recognizing the importance of these goals in preserving the integrity of the profession, many professional societies have "self-regulated" their members by capturing these duties in codes of professional conduct. For civil engineers, the requirement of technical expertise can be found in canon 2 of ASCE's Code of Ethics: "Engineers shall perform services only in areas of their competence." Meanwhile, the obligation of service to the public is stated unambiguously in canon 1: "Engineers shall hold paramount the safety, health, and welfare of the public...in the performance of their professional duties." 

But since the codes are voluntary, they are effective only when the professionals agree to comply with them. To address this potential compliance gap, most professions in the United States and in other countries have sought to buttress self-regulation with mandatory licensure. 

The primary role of professional licensure is to set a statutory baseline of education and experience for individuals offering services within a set scope of practice. In combination with continuing education requirements and a code of conduct, licensure also aims to ensure that licensees remain competent and firmly committed to service throughout their careers. Yet because of the specialized nature of professional fields, the government agencies charged with drafting, interpreting, and enforcing licensure laws are often not qualified to make the necessary judgments. These agencies must therefore often ask members of the profession in question to provide guidance, which again relies upon self-regulation.

Unfortunately, the right and responsibility of self-regulation are not without ethical challenges. Despite the ethical obligation to accord the public interest pride of place, licensees empowered to make decisions about other professionals may be tempted to look to their own business or personal interests. A licensee providing guidance to state regulators on a technical matter may be tempted to tailor his or her opinion so as to obtain a certain result, violating canon 3's requirement to make statements "only in an objective and truthful manner." It would also be possible for a group of licensees to use a position of regulatory power to gain an unfair competitive advantage, thereby violating canon 5's obligation to seek work "on the merit of their services, and...not compete unfairly."

Given the thin ethical line between safeguarding the interests of the public and promoting a personal bias, had ASCE's Committee on Professional Conduct (CPC) been asked to review the board's conduct, its members would probably have looked to the board members' motives in making their decisions. In the absence of tangible proof regarding motive, the CPC would have inferred motive from the reasonableness of the board's decisions. If the CPC felt that the board members could reasonably believe that home inspections required the exercise of engineering judgment and that the service therefore could be regarded as part of the practice of engineering, then the board members would have met their canon 1 obligation to protect the public interest by restricting unlawful practice. If, however, the CPC did not feel that the board's decision regarding home inspections had a reasonable technical basis, the CPC would have had no choice but to suspect that the board was motivated by another interest, such as the desire to suppress competition from lower-cost competitors, in violation of canon 5.

Although, as mentioned above, this situation is hypothetical, it is based on a case currently being considered by the U.S. Supreme Court. The case concerns the actions of the North Carolina Board of Dental Examiners, the state licensing board for dentists, which sent cease and desist letters to dozens of mall kiosk and other nondentist providers of teeth-whitening services because, the letters contended, they were engaging in the unlicensed practice of dentistry. 

The question before the Supreme Court is whether the "state action doctrine," a legal principle that exempts state agencies from federal antitrust liability, should extend to a board composed primarily of market participants and operating without active oversight by the state. The Supreme Court decision could have a significant effect on all professional licensing boards, and many of the arguments made during oral argument before the court mirror the ethical concerns discussed in this column. 

Several justices voiced concern that mere endorsement by the state did not ensure that a group of financially interested private parties would act to uphold state policy. Without independent supervision, Justice Elena Kagan asked, "Is this party, this board of all dentists, is there a danger that it's acting to further its own interests rather than the governmental interests of the state? That seems almost self-evidently to be true."

At the same time, given the vital role of licensing boards in protecting the public interest, the justices were clearly troubled by a policy that might dissuade professionals from sharing their expertise on regulatory matters. Using the example of competency standards for practicing brain surgeons, Justice Antonin Scalia opined, "I don't want a group of bureaucrats deciding that.... I don't want...medical boards throughout the country to decide everything in favor of letting in the unqualified person, lest he sue them under the antitrust law for treble damages and attorneys' fees."

There is no deadline by which the Supreme Court must issue its decision in this case other than the requirement that all cases argued during the court's term be decided before its summer recess. Thus, a decision in North Carolina Board of Dental Examiners v. Federal Trade Commission can be expected by mid-June 2015.



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) 295-6151 or (800) 548-ASCE (2723), extension 6151. 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.

© ASCE,  Civil Engineering , December 2014