Auto Whistleblower Lawyers
The Motor Vehicle Safety Whistleblower Act authorizes the Department of Transportation to issue rewards up to 30% of collected monetary sanctions exceeding $1 million for original information provided by any contractor or employee of an auto manufacturer, part supplier, or car dealership.
If you have evidence of a safety-related or vehicle-equipment defect, or failure to notify the government of such a defect, you could be eligible for an award under the Department of Transportation’s Auto Whistleblower Program. Our auto whistleblower attorneys can evaluate your claim involving any motor vehicle defect, noncompliance, or a violation of any reporting requirement. We will assist you throughout the process and help you avoid the pitfalls associated with filing a whistleblower claim with the National Highway Traffic Safety Administration (NHTSA).
History of Auto Whistleblower Law
The Thune-Nelson bill was introduced in the Senate in November 2014 to provide a reward incentive to auto industry whistleblowers. Only a few days before introduction of the bill, NHTSA announced a nationwide recall of defective Takata airbags. The Senate Commerce Committee approved the Thune-Nelson bill in February 2015, and in April 2015, the bill received unanimous approval in the full Senate.
In December 2015, Congress passed the Fixing America’s Surface Transportation (FAST) Act. This bill was the first long-term funding of the nation’s road system in over a decade. The legislation included a number of other measures, including an increase on the maximum fine imposed for delayed recalls to $105 million. It also included the Thune-Nelson bill which became known as the Motor Vehicle Safety Whistleblower Act.
Eligibility & Rewards under the Auto Whistleblower Program
In order to be eligible, you must be an employee or contractor of a motor vehicle manufacturer, parts supplier, or dealership.
Whistleblowers can receive an award of up to 30% of collected monetary sanctions exceeding $1 million. The Act defines “monetary sanctions” as “monies, including penalties and interest, ordered or agreed to be paid. The monies paid can come from administrative, civil or criminal fines penalties, disgorgement, restitution, community service fees, or other monetary payments made to the United States.”
Information About Vehicle Defects
The government seeks information relating to motor vehicle defects, violations of notification or reporting requirements, and other types of noncompliance that can potentially create unreasonable risk of serious physical injury or death. In other words, information involving minor vehicle defects and quality issues that don’t affect safety would not support a viable whistleblower claim. The government is focused on problems that put drivers and passengers at risk of serious injury or death.
Original Information Only
To be eligible for an award, an individual must voluntarily submit original information according to the procedures and conditions of the auto whistleblower program. “Original information” means information that: (1) comes from your independent knowledge or analysis; (2) is not known to the government from any other source; and (3) is not based exclusively from outside sources such as judicial actions, investigations, audits, or news reports (unless you are the source of the information).
The Takata Airbag Recall
Three former employees of the airbag manufacturer provided evidence to U.S. officials that the company concealed design flaws and problems that developed during testing. The whistleblowers reported that Takata manipulated reports to hide the volatility of its airbags. They also revealed that management directed employees to place rejected airbag parts back on the production line. The three whistleblowers were awarded a total of $1.7 million.
NHTSA’s investigation determined that environmental moisture, high temperatures, and age could cause the airbags to improperly inflate and even discharge shrapnel into occupants. The defective airbags resulted in 24 deaths and more than 300 injuries.
Takata agreed to plead guilty to wire fraud for providing auto manufacturers with misleading airbag test reports. The company also agreed to compensate vehicle manufacturers and pay $125 million to consumers who have been injured, or will be injured the defective airbags.
Vehicle Safety Act
The Motor Vehicle Safety Act was signed into law by President Johnson in 1966. It requires motor vehicle and equipment manufacturers to provide timely notice of a safety-related defect or compliance failure with a federal safety standard. Manufacturers must file a Defect Information Report within five days after they know, or should have known, of a potential defect that poses an unreasonable safety risk or creates a noncompliance issue.
The TREAD Act
The Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act was enacted in 2000 in response to numerous deaths and injuries caused by tread separation of Firestone tires installed on Ford Explorers from the mid-1990s through the early 2000s. The Act requires vehicle manufacturers to report defects, information involving accidents and injuries, and other data to NHTSA. Congress passed the law so that NHSTA could more quickly identify safety defects and take remedial measures.
There are two major components of the TREAD Act: 1) the requirement of manufacturers to report to NHTSA when they conduct a safety recall or other safety-related campaign, and 2) the requirement to report information related to defects, especially in cases of injury or death related to the use of products, known as “Early Warning Reporting.”
The maximum penalty for violations of the Act are $21,000 per violation per day, and the maximum penalty for a related series of daily violations is $105,000,000.
Criminal Wire Fraud
The Department of Justice investigates and prosecutes egregious cases of deceptive statements to consumers involving auto safety issues. These investigations and resulting enforcement actions are based on violations of criminal wire fraud laws. If the Department of Justice pursues an enforcement action, it can result in substantial penalties to the manufacturer.
Recalls & Auto Safety Defects
According to the National Highway Traffic Safety Administration, more than 28.1 million vehicles were recalled last year. The charts below illustrate the number of recalls and quantity of vehicles recalled, both uninfluenced and influenced, since 1997. An uninfluenced recall occurs when a manufacturer voluntarily initiates a recall; an influenced recall is either the result of an NHTSA investigation or a court order resulting from a NHSTA enforcement action.
A number of critical systems have been identified in previous recalls involving defects reported to the government, including:
- Acceleration and Braking
- Fuel Systems (fuel injectors, gas tanks)
- Safety Systems (airbags, seat belts)
- Electrical problems (fires)
- Suspension (defective welds, stress/corrosion)
- Steering (mechanical and power)
- Tire Defects
- Vehicle Crash Testing
If you are an employee or contractor working for an auto manufacturer, parts supplier, or car dealership, and have information about unsafe vehicles or parts, delayed recalls, or failure to report required data to the NHTSA, please call our whistleblower attorneys at 1-800-590-4116 for a confidential consultation.