Whistleblowers can receive awards for reporting auto safety problems
Vehicle-safety lapses seem like they’re a part of the daily news cycle. One day, faulty ignition switches cause GM vehicles to suddenly shut off. The next, dangerous Takata airbags shoot out metal debris. Later, we learn that Mini Cooper doesn’t meet side-impact crash protection standards. And then, we hear that Fiat Chrysler vehicles can lose control due to defective suspension parts. The list goes on. In 2015 alone, manufacturers and the government initiated nearly 900 recall campaigns that involved over 51 million vehicles.
Because lapses like these can lead to serious and often tragic consequences, the federal government has stepped up enforcement of vehicle-safety laws. In December 2015, as part of the Fixing America’s Surface Transportation Act, Congress created the Motor Vehicle Safety Whistleblower Act to give industry insiders a financial incentive to bring to light safety-related problems. Under the new program, a whistleblower can receive a reward of up to 30% of any monetary sanctions over $1,000,000 the government imposes based on the information the whistleblower provides. As well, existing law offers vehicle-safety whistleblowers protection against employer retaliation.
The Motor Vehicle Safety Whistleblower Act is now in effect. A whistleblower can receive an award even if the safety violations he or she provides information about occurred before December 2015.
Types of Safety Violations for which Whistleblowers Can Receive an Award
The Motor Vehicle Safety Whistleblower Act is designed to protect the public by encouraging people with knowledge of safety lapses to alert the authorities. It applies broadly to safety-related vehicle and vehicle-equipment defects, including failures to notify the government of such defects. Here are some examples of safety-related violations for which a whistleblower could have received an award under the program if he or she brought it to light:
- Takata Airbags: In November 2015, the National Highway Traffic Safety Administration (NHTSA) imposed a $200 million civil penalty on Takata related to defective inflators that caused explosive ruptures in its airbags. The defects caused 10 deaths and nearly 100 injuries in the U.S. Takata also provided NHTSA and its customers with selective, incomplete, or inaccurate data. Takata paid $70 million of the record civil penalty; the rest is a deferred amount.
- GM Ignition Switches: In September 2015, GM forfeited $900 million to settle criminal charges that it concealed a potentially deadly safety defect from NHTSA and misled consumers concerning the safety of its cars. GM designed and manufactured an ignition switch with too-low torque resistance that could easily move out of the “Run” position into “Accessory” or “Off,” disabling a vehicle’s front airbags. This increased the risk of death and serious injury in crashes in which airbags would deploy. GM admitted it should have recalled the ignition switch at least a decade before it did so in February 2014. As of December 2015, flawed GM ignition switches were associated with the deaths of 124 people and the injuries of 274 others.
- Toyota Sudden Acceleration: In March 2014, Toyota paid a $1.2 billion criminal penalty to settle charges that the company concealed information about defects from consumers and government officials, putting lives at risk because of faulty parts, (including “sticky” pedals that would get stuck when partially depressed) that caused sudden, unintended acceleration in several models.
- Early Warning Reporting (EWR) Failures: In 2014 and 2015, NHTSA issued over $290 million in fines to five manufacturers for failures to report defects in a timely manner. The manufacturers include automakers Fiat Chrysler ($175 million, including a $140 million cash penalty and $35 million in deferred penalties), Honda ($70 million), and Ferrari ($3.5 million); motorcycle manufacturer Triumph ($2.9 million); and specialty-vehicle manufacturers Forest River ($35 million, including a $5 million cash penalty and a $30 million deferred amount) and Spartan Motors ($9 million, including a $1 million cash penalty, a $3 million commitment to spend on compliance programs, and a $5 million deferred amount). Among other things, the manufacturers failed to submit comprehensive quarterly Early Warning Reports (EWR), which detail data on incidents involving a death or injury. The government uses EWRs to investigate potential safety defects and assess the need for recalls and other remedial actions.
Key Features of the Motor Vehicle Safety Whistleblower Act
- Applies to all matters involving vehicle-safety violations.
- Awards range from 10% to 30% of any amounts over $1,000,000 the Department of Transportation (DOT) or the Department of Justice recovers on information a whistleblower provides.
- Awards are based on the significance of a whistleblower’s information, the extent of his or her assistance, and, in some cases, whether he or she reported the information internally.
- Federal law protects a vehicle-safety whistleblower from employer retaliation.
- A whistleblower’s identity generally remains confidential.
- Open to all insiders. An eligible whistleblower is an employee or contractor of a motor-vehicle manufacturer, parts supplier (i.e., manufacturer of motor-vehicle equipment), or dealership.
- Awards are available for reporting violations that occurred before the program was created.
- A whistleblower does not have to be a U.S. citizen or resident, and violations he or she reports on don’t have to occur in the U.S. Whistleblowers can come from any country and can seek to expose actions occurring outside of the U.S. so long as some of the vehicles (or components) at issue are sold or otherwise distributed to the U.S. market.
This description of the elements and procedures of the Motor Vehicle Safety Whistleblower Act is general in nature. The Motor Vehicle Safety Whistleblower Act and the law surrounding it is complex. The whistleblower attorneys of Constantine Cannon understand the complicated, constantly changing landscape of state and federal whistleblower laws. If you would like more information or would like to speak to a member of Constantine Cannon’s whistleblower lawyer team, please Contact us for a Confidential Consultation.