Former Employer Establishing A New Firm - Soliciting Former Clients After A Period Of Time Has Elapsed
Case 178
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2026-02-13 21:36
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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.
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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...
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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.
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Created
2026-02-13 21:36
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2026-02-13 21:36
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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?
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Find Similar CasesD-tuple Component Breakdown
53
Total Entities9/9
Components Populated9/9
With EmbeddingsCombined Embedding
Roles
R
w=0.12
384D
Clover City Client
Major client of ABC that paid for the water treatment plant expansion report, is impressed by Engineer A's...
Engineer A Employee Engineer
As an employee of ABC, developed the funding report for Clover City's water treatment plant expansion, including...
Engineer A Firm Principal
Establishes his own engineering firm in Clover City, initially refrains from soliciting work from ABC's clients,...
ABC Engineering Company Employer
Employs Engineer A while he develops the funding report for Clover City; later becomes his former employer when he...
ABC Engineering Company Services Provider
Under contract with Clover City for preparation of the water treatment plant expansion report, for which the city...
Board of Ethical Review Adjudicator
Reviews Engineer A's decision to establish his own firm and his solicitation of work from Clover City, a client of...
6 entities
Principles
P
w=0.2
384D
Loyalty to Former Employer ABC
Engineer A establishes his own firm without soliciting work from ABC's clients, including Clover City, for a period...
Free Enterprise in Firm Establishment
The Board opens its analysis by affirming that engineers breaking off from their employer to go into business for...
Client Choice of Clover City
The Board weighs Clover City's favorable disposition toward Engineer A and observes that ABC's business with Clover...
Fair and Equitable Balancing of Interests
The Board turns to the specific facts of this case and balances the interests of the client, the individually...
Confidentiality of Former Employer Information
The Board cites the Code's guidance on the use of confidential information concerning the technical affairs or...
5 entities
Obligations
O
w=0.15
384D
Engineer A Faithful Agent Duty
While employed by ABC Engineering Company, Engineer A must act as a faithful agent of ABC in his professional...
Engineer A Former Employer Loyalty Duty
After leaving ABC and establishing his own firm, Engineer A must refrain for a period of time from soliciting work...
Engineer A Confidentiality Duty
Engineer A must respect the Code's guidance on the use of confidential information concerning the technical affairs...
3 entities
States
S
w=0.1
384D
Engineer A Solicitation Abstention Period
Engineer A Specialized Knowledge Absence
Tank Work Outside ABC Scope
No Compete Agreement Absence
Engineer A Clover City Familiarity
Clover City Contracts Under Consideration
Clover City Impressed With Engineer A
ABC Clover City Dependency on Engineer A
Engineer A Nondisclosure to ABC
Engineer A Independent Departure Motivation
Firm Establishment Proscription Absence
11 entities
Resources
Rs
w=0.1
384D
Water Treatment Plant Expansion Report
funding for the expansion of the Clover City water treatment plant, including an elevated storage tank
NSPE Code of Ethics
NSPE Code of Ethics (topic: use of confidential information of a former employer, promotional activities and...
BER Case 86-5
BER Case No. 86-5 (topic: ethics of staff engineers contracting independently with a client of their employer after...
BER Case 77-11
BER Case No. 77-11 (topic: engineers leaving a firm, contacting former clients, and use of specialized knowledge...
BER Case 79-10
BER Case No. 79-10 (topic: engineer at a firm winding down its operations offering services to complete projects...
ABC Clover City Report Contract
scope of work for preparation of the water treatment plant expansion report
6 entities
Actions
A
w=0.1
384D
Report Scope Expansion
Business Opportunity Suggestion
Work Offer Declination
Firm Establishment
Client Solicitation Restraint
Client Solicitation
Departure Nondisclosure
7 entities
Events
E
w=0.08
384D
Six Month Interval Elapse
Client Favorable Impression
Report Payment
Waiting Period Expiration
4 entities
Capabilities
Ca
w=0.07
384D
Board of Ethical Review Interest Balancing
The Board balances the interests of Clover City in retaining the firm of its choice, the interests of Engineer A as...
Engineer A Solicitation Timing Judgment
Engineer A exercises judgment about how long to refrain from soliciting work from ABC's clients after establishing...
Board of Ethical Review Precedent Reasoning
The Board of Ethical Review reviews prior Cases 86-5, 77-11, and 79-10, reasons analogically from them, and...
Engineer A Work Refusal Judgment
Engineer A declined an apparent offer of work from Clover City and decided not to compete directly with his former...
Engineer A Report Preparation
As an employee of ABC, Engineer A developed the funding report for Clover City's water treatment plant expansion,...
Engineer A Professional Initiative
Engineer A included elevated storage tank funding aspects in the report even though they were outside the negotiated...
Engineer A Client Relationship
Engineer A maintains a very good working relationship with Clover City, a major client of his employer ABC, and city...
Engineer A Confidentiality Judgment
Engineer A's duty to respect the Code's guidance on the use of confidential information concerning the technical...
8 entities
Constraints
Cs
w=0.08
384D
Engineer A Solicitation Abstention Boundary
Engineer A must not solicit work from ABC's clients, including Clover City, for a period of time after leaving ABC...
Engineer A Adversarial Involvement Limit
Engineer A must not become involved in adversarial situations relating to his former employer ABC.
Engineer A Specialized Knowledge Limit
Engineer A must not compete with his former employer ABC in connection with projects for which he gained particular...
3 entities
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