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Inferred Obligation of Faithfulness

Dec 1, 2015


Situation

In the late 1970s the nonprofit Western Fire Chiefs Association (WFCA) developed and published a fire safety code, the Uniform Fire Code. Updates to the code were regularly adopted into municipal law by many local governments in the western states, and many other states used compliance with the code in deciding whether to issue permits for certain activities.

While voting membership in the WFCA was restricted to public officials responsible for enforcing fire safety regulations, the organization routinely referred the periodic review of its code to volunteer subcommittees that were open to industry representatives and members of the public. One such subcommittee was charged with reviewing a section dealing with the storage of flammable liquids, and the president of a company that manufactured and installed underground storage tanks was invited to join on the basis of his expertise. Almost immediately he recommended changes to the code requiring that leaking tanks be removed from the ground for inspection prior to repair. The recommendation was one that would cause problems for many of the manufacturer's competitors. Removing a tank from the ground is a costly endeavor, and owners who pay to remove a tank will often simply replace the tank rather than repair it. As a low-cost alternative, some companies had begun to offer a tank-lining service. A tank would be punctured while it was still underground, and its inner surface would be given an epoxy coating.

Upon learning of the manufacturer's participation in the WFCA code revision, representatives of a tank-lining company requested permission to address the subcommittee. This request was granted for the subcommittee's final meeting, but before that meeting the manufacturer distributed a letter to his fellow subcommittee members making three misrepresentations: first, that leaking is always a sign of weakened metal; second, that it is difficult to determine the remaining metal thickness from an observation point within the tank; and third, that lining the tank would void the tank's Underwriters Laboratories (UL) safety certification. The manufacturer claimed that removal was the only way to ensure that the tank would remain structurally sound, and he warned that the WFCA might incur significant legal liability if it were deemed to have sanctioned the "unsafe" tank-lining service.

Despite the tank-lining representatives' presentation, the subcommittee was swayed by the manufacturer's arguments and proposed a code change mandating the removal and inspection of leaking tanks. In accordance with its established procedures, the WFCA distributed the subcommittee's recommendations to its members, who approved the recommendations unreservedly. The tank manufacturer then began contacting local government agencies to inform them of the proposed change. As a consequence, many localities began denying permit requests for underground tank-lining repairs. A tank-lining company that saw a significant decline in revenue filed suit against the manufacturer and his company, alleging a violation of federal antitrust law.


Question

If the manufacturer had been a member of ASCE, would his actions have violated the ASCE Code of Ethics?

Discussion

Whether adopted by a profession or encoded in government regulations, technical standards provide immeasurable public benefit in ensuring the safety, uniformity, and reliability of countless products and services in the modern environment. Yet because so much reliance is placed on them, the standards also present an enormous opportunity for professionals to knowingly or unknowingly cross ethical lines. A standard favoring one product or service over another can be a financial windfall to one company and ruinous to another. In an increasingly competitive marketplace, it may be all too tempting for professionals involved in the development or interpretation of standards to favor decisions that benefit them personally.

Canon 4 of ASCE's Code of Ethics is certainly germane: "Engineers shall act in professional matters for each employer or client as faithful agents or trustees, and shall avoid conflicts of interest." Yet because the professionals with the greatest breadth of knowledge and experience in a subject are also those who are most likely to have a personal stake in the standard, it may not be possible or even desirable to exclude individuals having a conflict of interest. Instead, ASCE members involved in a standards development process should focus on the requirement given in canon 4 to serve "as faithful agents or trustees." That is, every effort should be made to ensure that the perspectives, opinions, and interests of those participating in the development process are freely disclosed in order to preclude deception or trickery

This inferred obligation of faithfulness to the process also serves to address potential ethical concerns under Canon 5: "Engineers shall build their professional reputation on the merit of their services and shall not compete unfairly with others," as well as under category (g) in the guidelines to practice for this canon: "Engineers shall not maliciously or falsely, directly or indirectly, injure the professional reputation, prospects, practice or employment of another engineer or indiscriminately criticize another's work." If a final standard is to put a party at a competitive disadvantage, it must do so on the basis of solid reasoning, not on the basis of a false or misleading contention by a competitor in a position of influence

Applying these considerations to the facts of this case, if the manufacturer had argued that the competing product was unsafe on the basis of due diligence and his honest belief and had supported this contention with solid evidence, his conduct would probably not have fallen afoul of canon 4's "faithful agents" injunction or canon 5's prohibition on unfair competition, even if his beliefs ultimately proved to be incorrect. By instead offering what was alleged at trial to be a deliberate falsehood aimed at misleading the WFCA's voting members as to the adequacy of the lining method, the manufacturer violated the ethical duty imposed by the ASCE code to preserve the integrity of both the subcommittee and the competitive marketplace. Such behavior clearly contravened canons 4 and 5

While the focus of this column is the ethics of the manufacturer's actions, it should be noted that the WFCA's standards development process at the time left much to be desired. Although it was wise for the subcommittee to seek out experts to provide information on underground tank safety, by selecting a representative from only one field of interest, it all but ensured that its decision would be slanted. Today, such standards development organizations as ASCE take great pains to ensure that their standards are broadly consensus driven. In addition to equitable treatment of all interested parties and balanced committee representation, opportunities are provided for public review and comment.

Readers may recognize the similarities between this case and American Society of Mechanical Engineers v. Hydrolevel, in which a competitor's abuse of the standards process resulted in significant antitrust liability for the association involved (see Question of Ethics, Civil Engineering, February 2011, pages 46-47). While the two situations are indeed similar, in this case the court made an interesting and somewhat surprising distinction (Sessions Tank Liners, Inc. v. Joor Manufacturing, Inc., 827 F.2d 458 (9th Cir. 1987) and 17 F.3d 295 [9th Cir. 1994]). Because the association members were not competitors but rather government officials and because the ultimate act of "harm" was a governmental process-that is, the denial of permits-the court ruled that the manufacturer's actions were protected under an antitrust doctrine of immunity for "direct lobbying for government action." It accordingly denied damages to the aggrieved party, although filings submitted in connection with the court noted that the tank-lining company had already resolved some of its competitive challenges by successfully lobbying government officials to resume granting permits for its service. 



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 2015