Unexpected Risk for Engineering Corporations
The Washington statute governing registration of engineers, RCW 18.43, establishes a licensing board with jurisdiction over disciplinary proceedings against engineers. Under RCW 18.43.130, a corporation may engage in engineering if the corporation submits an application to the board that designates a licensed engineer as “responsible for the practice of engineering by the corporation in this state [with] full authority to make all final engineering decisions on behalf of the corporation.” This statute may create problems for engineers who practice in S or C corporations.
While the apparent purpose of this statute is to make the “designated engineer” answerable to the board if the corporation departs from professional standards, a Washington trial judge recently ruled that the “designated engineer” was personally liable in tort for the negligent acts of corporate employees.
There is also a risk that the licensing board could conclude that, under the statute, the “designated engineer” must exercise his or her authority by personally making or confirming every engineering decision of the company. This would obviously be impractical for a large firm. The board has not had occasion to rule on this issue.
The statute provides that professional services corporations established under RCW 18.100 are exempt from the “designated engineer” requirement. Engineers in corporate firms practicing in Washington, or other states with similar licensing requirements, should consider whether changing to a professional services corporation will reduce their risk of unwanted consequences.
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