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Auto-safety regulators finally take steps to stand up nation’s only safety-focused whistleblower program, but challenges lie ahead

Posted  June 16, 2021

Back in 2015, the public seethed over the auto industry’s historic failures.  Takata’s air-bag scandal, Toyota’s unintended-acceleration deceptions, and General Motors’s deadly ignition-switch cover-up were in the headlines.  Hundreds died and millions were exposed to grave dangers because of the industry’s propensity to bury known safety defects.

In 2015, Congress tried to turn the tide, passing the Motor Vehicle Safety Whistleblower Act.  The law created a whistleblower reward program in the Department of Transportation (DOT) to pay awards to industry insiders who provided information to safety regulators about defects in vehicles, and protected such insiders from retaliation.

The law was modeled on other incentive programs that pay tipsters to help federal regulators clamp down on scofflaws, like the SEC’s whistleblower program.

Congress had reason to be confident the auto-safety program would work, since other whistleblower reward programs have been a screaming success, including for many Constantine Cannon clients.  And safety advocates had reason to be hopeful, too.

We saw right away how critical the auto-safety whistleblower program could be to public safety, as we helped many whistleblowers bring critical information about disastrous defects to the National Highway Traffic Safety Administration (NHTSA), the DOT agency that runs the program.  We represent a South Korean engineer whose whistleblowing resulted in Hyundai and Kia recalling millions of vehicles and paying a record $210 million in penalties.  We also represent two brave Takata whistleblowers, including a chemical engineer who warned executives that people would be killed if the airbag manufacturer used an airbag propellant that could blow up uncontrollably.

But six years on, the DOT whistleblower program is flat-lining.  Why?  What happened?

As the Wall Street Journal reported in April, the major culprit is that NHTSA never set up the program.  Congress gave DOT until June 2017 to make rules for the program, but NHTSA blew that deadline.  To make matters worse, NHTSA did nothing to publicize the whistleblower program.  No website.  No hotline.  Nothing.

But two recent developments make us hopeful that DOT is finally giving the whistleblower program the attention it deserves.  This week, NHTSA launched a website that explains the basics of the program.  For the first time in six years, NHTSA has instructed would-be whistleblowers how to report suspected safety violations, what to do if they’re retaliated against, and how to apply for monetary awards.  That’s a start.

DOT also announced that it will propose rules for the whistleblower program by January 2022.  That’s also good news.  (Though DOT has failed to meet several other targets it set to make the rules, apart from Congress’s 2017 deadline.)

The bottom line is that DOT and NHTSA leaders seem serious about bringing the whistleblower program to life and wielding a powerful tool to protect people from fatal defects.  DOT Secretary Pete Buttigieg told the Wall Street Journal the whistleblower program is a priority for his department.  And NHTSA Acting Administrator Steven Cliff gave his full-throated support to auto-safety whistleblowers this week, declaring they “play a critical role in safeguarding our nation’s roadways” and promising DOT will “do everything in our power to protect them.”  It’s about time.

But the real work lies ahead.  If DOT wants to encourage insiders to take serious risks to protect the public, it has to create a supportive agency culture that welcomes whistleblowers.  Providing basic information and simplifying the whistleblowing process, as NHTSA’s new website does, is a good start.  But after more than five years of silence, NHTSA and DOT leaders need to do more.  They have to take every opportunity to show that whistleblowers are central to the regulator’s enforcement efforts.

Equally important, DOT has to make clear program rules that plainly state when a qualifying whistleblower will—and will not—get an award.  If DOT gets this right, the entire public will benefit from the knowledge and courage of industry insiders.  But if DOT imposes needless impediments, potential whistleblowers who fear retaliation won’t come forward to report safety defects that imperil all of us.

The DOT reward program is unique in the pantheon of similar laws in that it is focused exclusively on public safety.  Other whistleblower programs recover money that investors lose, or protect taxpayer funds from fraud and abuse.  But only DOT’s program is designed to motivate insiders to protect the safety of the entire public.  So the stakes are high.

We at Constantine Cannon are actively working to ensure that DOT creates a successful whistleblower program.  And we will keep you updated on developments related to it.

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Tagged in: Auto Safety, Importance of Whistleblowers, Legislation and Regulation News, Whistleblower Eligibility, Whistleblower Rewards,