Senate Passes Auto Whistleblower Reward Bill

The U.S. Senate unanimously passed the Motor Vehicle Safety Whistleblower Act yesterday to provide auto industry whistleblowers with incentives to provide the Department of Justice and the NHTSA information about product defects. It’s the first auto safety legislation to pass since the recalls of millions of vehicles because of issues with GM and Takata products.

The law is modeled after proposed legislation allows employees or contractors of manufacturers, part suppliers and dealers to become eligible for a reward.

The bill was sponsored by Senators John Thune and Bill Nelson. Senator Thune is the chair of the Senate Commerce Committee and Senator Nelson is the top Democrat there.

We have previously suggested three changes that should be made to the bill, including:

Mandatory Rewards: The bill leaves awards up to the discretion of the Secretary of Transportation. Other laws, like the Dodd-Frank Act, the False Claims Act and IRS Section 7623(b) all have mandatory award provisions. Discretionary programs at the SEC on insider trading and the IRS on

Anti-Retaliation Protections: The legislation does not provide for them. It is similar to the IRS program in this respect. The President and the Internal Revenue Service have been asking Congress for years to fix this missing piece. The lesson from this situation should be heeded and a remedy for whistleblowers who are retaliated against should be added.

Expanded Eligibility: The bill only allows employees at certain companies within the industry to receive a reward. As data from the SEC whistleblower program suggests, industry experts, customers and many other individuals will also have information that would be welcomed by the U.S. Government. Ex-employees are also a large source of reports of corporate wrongdoing. Including these individuals would be beneficial to the government’s goal of

The next obstacle for the legislation is the House of Representatives, where a number of different initiatives to promote motor vehicle safety are pending.

Here is our discussion of the bill from a few months ago:

If the legislation passes the House and is signed by President Obama, our whistleblower attorneys will be expanding their practice to represent members of the auto industry reporting violations of federal laws governing recalls and auto safety. To learn more about the auto whistleblower law, contact one of our whistleblower attorneys via our contact form or by calling 1-800-590-4116.

Photo Credit.

Spring 2016 Update:

The Thune-Nelson proposal was signed into law by President Obama as part of the FAST Act in December 2015. For additional information, please visit our page dedicated to auto whistleblowers.