Assuming from your handle that you are from New Jersey and that the act you described also occurred in New Jersey, then according to New Jersey's engineering law, the engineer has possibly committed misconduct (items i and ii), and the firm has possibly committed misconduct as well (item iii) based on the following statement in NJ Administative Code, Section 13:40-3.5 (a)....
4. Engaging in any activity which involves him in a conflict of interest, including without limitation:
[highlight]i. A licensee shall inform his client or employer of any business connection, interest or circumstance which might be deemed as influencing his judgment or the quality of his services to the client or employer.[/highlight]
[highlight]ii. When in public service as a member, advisor or employee of a governmental agency, a licensee shall not participate in the deliberations or actions of such agency with respect to services rendered or to be rendered by the licensee or any firm or organization with which he is associated in private practice.[/highlight]
[highlight green]iii. A licensee shall not solicit or accept a professional contract from a governmental agency upon which a principal, officer or employee of his firm or organization serves as a member, advisor or employee[/highlight]