It was ethical for Engineer A to establish his own firm in Clover City. It was ethical for Engineer A to begin soliciting work from ABC’s clients, including Clover City after a year had passed.

It is not unusual for engineers, employed by others, at some point, to break off from their employer and go into business for themselves. This is a fundamental principle of this nation’s free enterprise system and generally should not be discouraged. As a general matter, this practice raises no ethical issues for the BER’s consideration. However, the Code does address some issues that could arise in this context and provides ethical guidance where the engineer considers this business option. The Code addresses the use of confidential information concerning the technical affairs or processes of the former employer, promotional activities and negotiations for employment or business, and the involvement of the engineer in adversarial situations relating to the former employer. (See NSPE Code Sections III.4., III.4.a., III.4.b.). The Board has previously addressed similar cases. In Case No. 86-5, a city requested proposals from various consulting engineers for a major job that was planned. Engineer A, a principal in a large engineering firm in the city decided to have his firm submit a proposal. Engineer A asked three engineers on his staff, Engineers X, Y, and Z, to develop the proposal for the firm. Engineers X,Y, and Z developed the proposal which was ultimately submitted to the city. Soon thereafter, the city learned that Engineers X, Y, and Z are the engineers who actually developed the proposal, for the firm and a city official approaches Engineers X, Y, and Z and asks if they would agree to a contract as consultants, independent of Engineer A’s firm. Engineers X, Y, and Z disclose the facts to Engineer A, resign from the firm, and enter into negotiations with the city. The Board concluded that a strict interpretation of the Code under the facts of this case led to the conclusion that it would be ethical for Engineers X, Y, and Z to agree to a contract for consulting services independent of Engineer A’s firm. In reaching its conclusion in Case No. 86-5, the Boa...

Engineer A currently works for ABC Engineering Company. Engineer A has a very good working relationship with a major client, Clover City, which is a neighboring city. ABC is currently under contract with Clover City for the preparation of a report on an expansion of the city’s water treatment plant. As an employee of ABC, Engineer A developed the report by which the city will get funding for the water treatment plant expansion. The report included a part dealing with funding for an elevated storage tank. Those aspects of the report that dealt with the elevated storage tank were not part of the scope of work originally negotiated between ABC and Clover City and no contract exists between the city and ABC for the design of the elevated storage tank. Clover City is impressed by Engineer A’s initiative on this project. The city has paid ABC for this report.Recently, officials in Clover City suggested that Engineer A open his own engineering company in Clover City. The city indicates that it would consider a city retainer contract and also a contract for the design of the elevated storage tank.Six months later, Engineer A decides to establish his own firm in Clover City without soliciting work from ABC’s clients, including Clover City for a period of time. However, after a year has passed, Engineer A begins soliciting work from ABC’s clients, including Clover City. There was no “no-compete agreement” between Engineer A and ABC Engineering Company.

Was it ethical for Engineer A to establish his own firm in Clover City? Was it ethical for Engineer A to begin soliciting work from ABC’s clients, including Clover City, after a year had passed?