The National Highway Traffic Safety Administration (NHTSA), the nation’s auto-safety regulator, finalized a new rule for its whistleblower program, which pays monetary awards to auto-industry insiders for providing information about critical safety defects. At long last, auto-safety whistleblowers can know the rules of the road for blowing the whistle.
In the wake of a seemingly endless stream of auto-safety scandals—GM’s faulty ignition switches, Takata’s shrapnel-spraying airbags, and Toyota’s sticky gas pedals, to name a few—Congress passed the Motor Vehicle Safety Whistleblower Act in December 2015. That law encourages auto-industry insiders to bring to NHTSA information about safety defects that manufacturers and suppliers prefer to hide. How does the law do that? If a whistleblower’s original information contributes to the successful resolution of an enforcement action that NHTSA brings, NHTSA can pay the whistleblower an award of 10 to 30 percent of the monetary sanctions collected. Federal law also includes anti-retaliation protections for whistleblowers.
The recently published rule supplies many details for the operation of NHTSA’s whistleblower program that would-be whistleblowers need to decide whether to file tips. The rule defines key program terms, describes procedures for submitting information and applying for awards, lays out NHTSA’s procedures for making decisions on award applications, and more. The finalized rule expands the scope of potential whistleblowers to include current and former employees or contractors from vehicle manufacturers, suppliers, or dealerships.
NHTSA Deputy Administrator Sophie Shulman said in a statement announcing the new rules, "Whistleblowers play a vital role in identifying safety concerns and ensuring the safety of our nation’s vehicles and roads." We know that is true from our experience representing many NHTSA whistleblowers.
While NHTSA’s public enforcement actions have slowed, they certainly haven’t stalled. In November, for example, NHTSA issued a $165 million penalty involving Ford Motor Company, the second largest in the agency’s history.
NHTSA disclosed that it has received 300 tips under the program, which suggests the agency has many whistleblower-initiated investigations underway.
Whistleblower Partners attorneys have unmatched expertise with NHTSA’s whistleblower program and successfully representing auto-industry tipsters.
Our attorneys represented whistleblower Gwang Ho Kim, who exposed Hyundai and Kia’s efforts to conceal a design flaw that put engines in millions of vehicles at risk of catching fire. Kim’s reporting resulted in carmakers agreeing to pay up to $210 million. And his courageous actions also led NHTSA to award Kim $24.3 million in the first-ever whistleblower award the agency has made.
Prior to that, our attorneys represented two Takata whistleblowers who received a monetary award after reporting the airbag manufacturer’s lethal problems.
From the start, we have worked to educate potential auto-safety whistleblowers about the NHTSA program and advocated for sensible rules to encourage tipsters to come forward. That is why NHTSA expressly agreed with and reflected many of our views in the new whistleblower program rule.
If you would like more information or to speak to an attorney at Whistleblower Partners, please contact us for a confidential consultation.
