The Industrial Exemption: What, If Anything, Should The Profession Do?

In many states, engineers who work in industry providing engineering services are exempt from licensure requirements. Of those state licensing boards that responded to a survey by the National Council of Examiners for Engineering and Surveying, 29 licensure jurisdictions exempt employees of industrial or manufacturing firms, and 14 have no such exemption provisions. Of those states with exemptions for industrial employees, many do not enforce licensure requirements on engineers who consult to those industries later in their careers, rather than work as employees. Is a consultant treated as an “employee” and therefore provided the exemption? If so why? In the states that do not have industrial exemptions, licensure requirements for engineers in industry aren’t commonly enforced, in part for fear the legislature would enact an industrial exemption if enforcement were to begin. Such is our system.

A few years ago, Neil A. Norman, P.E., currently a member of the Washington Board of Registration for Professional Engineers and Land Surveyors, prepared an outstanding summary of the genesis of industrial exemptions in the U.S. This treatise makes for interesting reading.

Industries exerted powerful political influence on a state-by-state basis in the 1940s through 1960s to get these exemptions enacted. A friend of mine who worked for a major U.S. manufacturer throughout that period indicated that the external communication at the time stressed the nature of our legal system, product liability law, and a variety of other broad arguments, but this friend indicated that the internal discussion was that their engineers were to work for one employer – the company – and not have to answer separately to an outside authority. That was the bottom line.

An NSPE member recently sent me an opinion piece from “Signal”, a periodical of the broadcast engineering industry. In that article, Chris Imlay, the general counsel of the Society of Broadcast Engineers, provides an interesting perspective on licensure laws and their impact, or lack of impact, on broadcast engineers. This article, which comes from the perspective of practicing engineers who are not licensed and do not wish to be licensed, addresses both potential practice limitations and the use of the title engineer in those states that restrict use of the title engineer to those who are licensed professional engineers.

The industrial exemption is a major reason why only about 20% of engineers in the U.S. go on to become licensed professional engineers (the other 80 % don’t all work in industry, but that is a topic for another day).

So, the above provides some background on the topic. One of the purposes of these NSPE blogs is to get some conversation going. Feel free to comment. Some questions might be:
1. Is there a problem here? Is the public health, safety and welfare at risk because engineers in industry are not required to be licensed, or does our legal system adequately protect the public otherwise?
2. What, if anything, should the engineering profession do regarding regulatory requirements pertaining to engineers in exempt industries? This is something that is often discussed within the engineering profession, but no one proposes to actually do anything. Is that the best course?

What do you think?

Published October 1, 2009 by Craig Musselman, P.E., F.NSPE

Filed under: Industrial Exemption,

Comments

I briefly offer my own comments here.  Left to the discretion of private, capitalized industry, the health, safety, and welfare of the public is not likely to be adequately protected.  We as engineers have an ethical duty on behalf of the users of our designs and that is and should be the primary means for protecting the public.  Without PEs in private industry today, it is highly unlikely that ethics will win out over capitalism.  Couple that fact with the recent Supreme Court decision on campaign funding and we, as a nation, are in serious trouble.

After completing my Masters in engineering at Stevens Institute of Technology in 1979 I became an MBA student in NYU's graduate school of business.  At about the half way point in the program I took a business ethics course which posited the FDA banning of a product by a fictitious American pharmaceutical manufacturer.  It was the study group's responsibility to decide how best to protect the company and shareholders from catastrophic financial loss.  Sadly, it did not take too long for the group's majority to decide to sell the product in a third world country, free from the control of the FDA.

Some 30 years later those folks in my MBA class have now risen to be the titans of industry and of Wall Street.  Need I say more?

Tuesday, March 02, 2010 8:35 AM by John C. Cronin, Jr., P.E.

I have a Bachelor's in Biology and made it through the Navy's Nuke Engineering School (Mechanical) and passed the 6 hour NRRO review board to earn my MM-3385.  No degree is awarded for that but you get college credit towards a Bachelor's in Nuke Engineering Technology at many colleges.

Nevertheless at my job which I have had for 10 years, my title is now Regional Applications Engineer.

Starting out fresh out of the Navy my boss a degreed engineer (but not a PE; he only passed the EIT exam) only allowed me title of Applications Specialist. A few years into it I threatened to quit unless title was upgraded to ASSOCIATE APPLICATIONS ENGINEER. He begrudingly obliged. I didn't even want a raise.

After all, by then I was designing advanced control systems for combustion and cryogenic systems and thought the title warranted. The systems I designed were all compliant to NFPA standards, used UL and FM approved components and the design packages recieved a review among my colleagues. (no less than 3 associates.)

Rarely was one of these additional associates a PE however within our company we do have them and they are often stuck with the wonderful Onus of being the SME (subjet matter expert) for the design reviews. Onus, as they are in short supply and are stuck doing design reviews and process hazard analysis review all day.

I am a design authority.  I have made it to the group level of our technical career ladder and am now a control systems specialist and I can tell you I have the EIT Study book (big blue and yellow thing) and could NEVER pass that test.

Abstract calculus is just not my thing. I am an ISCET Certified Electronics Technician and any time I need to do an ArcFlash study or radiant heat transfer model I can get out the graph paper and nomographs and do the math, but I couldn't integrate a first order anything.

I have the highest respect for about 1/2 the PE's I know.  There are 2 types and our company has both of them.

The one type is what I call the "old school" PE's who know their stuff and coincidently are 40+ years of age and they are valuable resources within my organization.

The other half are a bunch of TI-84 wielding cocky know nothings who took the EIT course as their last class out of college and don't know their theta from a hole in the ground but can do some math.

I have designed entire systems and just to meet a municipal customer's requirements handed the design package over to a PE and said "I know the drill, rubber stamping is forbidden and unethical so here you go, do your thing" and then it's THEIR design. No changes made. humm...

No problem, Civil and Municipal work requires a stamp and for good reasons.

However not everyone needs to (or is able to) pass the EIT/PE exams.  If it weren't for the "manufacturing exemption" clause in the 29 or so states that have it in their statutes even everyone who graduates from an ABET accredited college would not be allowed to wield the title Engineer without a PE after their name.

PE should be required for structural and public sector life safety things like bridges, buildings, roads, municipal systems etc.

Leave the specialized systems design to the manufacturers who specialize in the systems they designed in the first place. Often from empirical trial and error at the R&D stage.

Our company has CGA and NFPA reps and committee members to help guide and keep some sanity to the rules and regs established and those committee members are more commonly the 20 year veteran field service technicians who have made it to to a title of Engineering Service Manager or the like and have more experience than anyone in the lab or field or classroom.  These veterans of the specific industry are the ones providing input for the safety of the public and sharing their persona

Wednesday, March 03, 2010 10:50 PM by Richard Masi CET

I learned about this blog while reading the Aug/Sept edition of PE Magazine and the "Second Look at Safety" article involving BP.  I have written several articles about BP and questionable corporate engineering practices on my blog at http://engr101.com

I have my BS and MS degrees from Univ. of Texas; became first licensed as Texas PE in 1970; specialties are structural, civil and architectural engineering with a mech. engr. component; and have worked as an independent consultant for small and large companies, including my own, all of my life so I routinely use my PE seal on projects.  

One of my roommates at UT majored in chemical engineering, went to work for (unnamed) chemical company, spent his life in plant and process design with the first years spend running around the various petrochemical structures in polluted atomosphere while EPA was formed.  EPA then spent five years trying to make up their minds about whether or not to permit the use of scrubbers on the stacks.  Nothing like making for a good crisis to give a new government agency great power.  

A few years ago my friend was forced to retire before he was fully vested.  Seems the company has learned that they can keep engineers long enough to use them up but then let them go at partial retirement.  Not to be too cruel, the companies then hire them back at a small consultant salary so that they can barely survive but the combined cost to the company is less than it would be if they simply let the engineers reach retirement age.

He regrets not having the foresight, as I had, knowing that one day all engineers who work for industry could be let go right before fully vested retirement.  He regrets not taking the EIT exam and the PE exam and getting his license when he was young, so that he could work as a legitimate consultant to industry later if he needed to, rather than engage in this farce as a consultant without a PE seal only to the company that fired him early.  Now he is their slave.

His years of running through the polluted air have damaged his body.  His bones break quite easilly.  Some of his bones have holes large enough to drop a quarter through.  Fortunately, he does get good medical treatement so the company might have given him some kind of additional settlement.  I do pray for him and I know others do too.

And this government wonders why American kids don't want to be engineers and why the average age of PEs is now in the mid to late 50's.  We're going down the tubes, folks, unless things change big time, including abolishing the industry exemption in every state in the nation.

June Melton, PE

Sunday, September 05, 2010 6:38 PM by June Melton, PE

I am the CEO and Principle Engineer of JLS Engineering Consultants, Inc in San Antonio. We deal in Aeronautical and Mechanical engineering services to the aviation industry.

There is a severe problem in the aviation / aerospace industry. Most engineers (approx 95%) in this industry are not licensed. Many are working as Consultant Designated Engineering Representatives (DERs) of the FAA providing consulting services to aircraft manufacturers regarding the design and certification of that manufacturers product.

They are not an employee of the manufacturer but they are in fact the final authority as to the safety of the product and the flying public.

The FAA has refused for years to require Consultant DERs to be licensed primarily because licensing is a State activity and not a Federal Government issue. Engineers who are federal employees are exempt from licensure but FAA rules governing DER's specifically state that DERs are not employees.

This is a problem that affects the safety of the entire flying public. It needs to be raised to the National level and pushed down through the FAA.

Saturday, May 21, 2011 3:40 PM by John Siemens, P.E.

I graduated from college in 2006 with a degree in electrical engineering.  Since then I have worked in the industry for a consulting group for 3 years and now at a cement plant for 2 years.  In my state you require 4 years of experience, the eit, and a 4 year ABET engineering degree to apply for the PE.  Even though I do not need a PE for working in industry I would like to obtain licensure if for no other reason then to demonstrate that I have obtained the basic level of a "Professional" and that I do take my designs and applications seriously enough to be held fully accountable for them.  After applying I was told by the board 3 years of my experience was voided because it was not experience under a PE.  What mechanism do those of us in industry have to obtain our PE licenses?  If we want the industry to be licensed what can we do to allow those who are willing and able to be licensed the ability to take the PE Exam?  Even though there are new PE test disciplines it seems the route to get there is still very much dictacted by the traditional civil, electrical, mechanical routes. This makes things difficult for a control systems engineer.

Saturday, August 13, 2011 4:20 PM by Kyle Cram

1. I can see some interesting administrative issues relating to industrial PE licensing.  If an provides in-house design services for a manufacturer with a national market, should the engineer be licensed in every state where the product is used?

2. It is interesting that Mr. Masi sees the need for PEs to design municipal systems, but not nuclear systems.  In the public's mind, which is the more critical pipe failure: a potable water line or a reactor cooling water line?

3. The title "engineer" has been downgraded to the extent that it is nearly meaningless.  Years ago a "sanitary engineer" designed water supply and pollution control facilities, now they collect garbage; custodial engineers push brooms; and maintenance/building engineers are mechanics.  All of these jobs are critical to our society, yet they are not engineers.  Perhaps we should follow California's policy and restrict the use of the title "engineer" to those who are licensed to perform engineering.  Then we would be in a better place to require that engineering be performed by engineers.

Wednesday, December 28, 2011 6:55 PM by Tom Holbrook, PE

2 Feb 2012

I believe eliminating or narrowing the industry exemption in Texas law is essential for the engineering profession.

Consider this example:  the explosion and sinking of the Deepwater Horizon and related oil spill at the Macondo Well in the Gulf... I am studying this case and have found many individuals involved in the many critized decisions had a title with the word engineer in it, but many of those individuals do not have an engineering degree and very few (if any?) are licensed in Texas.  Current law allows this, because of the industry exemption, and also ambiguously because of the offshore location of the Macondo well, although there are good arguments that Louisiana (LAPELS) engineering regulations should have applied at that location.  In the end, there were many decisions by many individuals (and teams) that have been criticized (I think appropriately) as not appropriate decisions for a PE to make.  

This is not to say that a lot of the work in industry, including design work, can't be done by experienced designers, regardless of how they got their experience, but when oversight and decision making (or approval) of processes like the one in question is not handled with a professional approach (reflecting some degree of autonomy and a professional determination to hold paramount the public health, safety and welfare), we can expect outcomes like this one from time to time.  

It is very interesting to compare the Deepwater Horizon explosion to the  New London school explosion (the 1934? incident responsible for the Texas Engineering Practices Act), because both disasters result from actions and decisions made by experienced industrial "technicians" who were not licensed professional engineers.

I think the following issues may have been a factor in this incident because of the industry exemption:

Experience (PE's are guaranteed to have some meaningful experience; others may or may not be appropriately experienced)

Culture (the culture of many non licensed engineers is often skeptical of the value of engineering licensure and sometimes tends to assume their own capabilities are greater than they really are--I think this is especially true in the oil patch--but PE's are supposed to be very cognizant of the limits of their experience and knowlege, and not to practice in ares in which they are not competent)

Competence (competence of PE's is, to some extent, regulated, they are tested (FE and PE Exams) and they are required to maintain competence with continuing education; others aren't required to do this)

Ethical Awareness (PE's in Texas are required to gain one hour CPD annually in the area of professional ethics; no such requirement for others)

Incentive (one important incentive for PEs that does not affect others--you can lose your license if you practice outside your competence or otherwise unprofessionally)

Now a repeal of section defining the industry exemption in Texas would cause significant problems in Texas industry, and much (compromise?) would be needed to mitigate these problems before this could be politically possible.  Probably it would be necessary to grandfather most in industry with an "engineering" job title or description; those individuals could be required to apply for registration under special regulations and allowed to continue to do certain work with certain titles, but would be required to maintain a PE license and get CPD credits.  Even then, there would be an immediate need for new PEs in industry which would create economic incentives for the roughly 70% of all graduating "engineers" in Texas to seek registration.  Costs in industry would increase; compensation for PEs (and their responsibilities) would increase,...

I have enjoyed reading your thoughts on this issue, which I consider critical to the

Thursday, February 02, 2012 12:44 PM by Ray James, P.E.

Is the ongoing General Motors safety issue over ignition switches an argument for ending the Industrial Exemption?   I think so.   Not that corporate registered engineers would have eliminated the safety issue but I believe it enhances integrity and ultimately individual performance coupled with need for continuing education.  I am proud to say I maintained being a PE for the 45 years of employment in corporations.
William L Gregory
P.E. Active Retired

Saturday, June 07, 2014 2:43 PM by gregory_wl@msn.com

Ford Pinto?  People died in horrible fires.  All because non-engineers or "Engineers without a Conscience" in management wanted to save the $5 for the rubber fuel bladder.  Not to mention the rear end "pumpkin" was in an obviously wrong place in relation to the gasoline tanks to appear anything near safe. "Engineers" although likely unlicensed, still had a $1 fix for a nylon shield between the tank and the differential. So for a 1 $ bill some people could still be alive today.  Sure for the proponents of Product Liability Statutes Ford did pay lots in liability.  But people are still dead.  Had there been an engineer with a vested interest in maintaining a conscience in a management position that could not be overridden by non-engineering management, some people may still be alive today and it certainly would not have cost Ford near as much to hire that person.  

Product Liability Laws only seek to compensate people for damages after the fact.  Licensure Regulations seek to prevent the damages from occuring in the first place.
Where I work I hear it said that if doing something halfway good saves a lot of money, that would pay of a lot of asparin for the headaches later.  My comment back is that they better be prepared to actually buy the asparin.  Usually the amount of asparin they have to buy is more than the cost of the better alternative up front.

Friday, July 25, 2014 1:30 PM by electrabishi@gm...

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