The Auto Whistleblower Rewards Program

The Motor Vehicle Safety Whistleblower Act (signed into law by President Obama in December 2015 as part of the FAST Act) authorized the Department of Transportation to issue rewards up to 30% of monetary sanctions collected from information provided by eligible employees of auto manufacturers, part suppliers and car dealers.

Our auto whistleblower attorneys will evaluate your claim of corporate misconduct by an automobile or equipment manufacturer for reporting to the U.S. Government (either the Department of Transportation, the National Highway Traffic Safety Administration (NHSTA) or the Justice Department).  If you have evidence concerning the failure to report a motor vehicle defect or issue a recall, you may have a viable whistleblower claim for an award.

Our law firm is uniquely qualified to handle these cases:

Eric L. Young: A whistleblower attorney that has represented dozens of insiders reporting corporate misconduct to the U.S. Government.

Jim McEldrew: A trial lawyer that has handled dozens of personal injury cases involving car and truck accidents.

For a free initial legal consultation with one of our lawyers about the auto whistleblower program, please call (800) 590-4116 or fill out our contact form to schedule an appointment.

We’re Ready to Help Report Motor Vehicle Defects to the U.S. Government.  Call 1-800-590-4116 to speak to Eric Young or Jim McEldrew about the Transportation Department’s auto whistleblower program.

The Highlights of the NHTSA Whistleblower Program

When is the program coming?  The legislation explicitly requires the Secretary of the Department of Transportation to issue regulations implementing the whistleblower law within 18 months of its adoption.  That puts the deadline a few months into 2017.  For comparison purposes, the SEC and CFTC were accepting tips provided pursuant to the terms of the Dodd-Frank Act a year after it was signed into law.

Limited to Industry Insiders:  You must be working as an employee or contractor of a motor vehicle manufacturer, parts supplier or dealership.  Basically, this means that you work for an auto company (like GM), a manufacturer of motor vehicle equipment (think Takata), or a dealer (auto sales facility).  You won’t meet the requirements to receive a reward if you are a consumer as it simply does not appear to be within the definition of a whistleblower.  This is a shortcoming (as we would personally favor their inclusion) but it is excluded by the text adopted by Congress and signed by the President.

Tip Submission Dates:  Individuals may turn in information prior to the adoption of the program.  The law makes clear that even if the information involves a violation which occurred prior to the enactment of the FAST Act, it is still eligible for a reward so long as it is turned in after the signing of the FAST Act.  Only information which was provided to the U.S. Government before the signing of the FAST Act is excluded.

Information About Vehicle Defects:  The U.S. Government is looking for information relating to motor vehicle defects, violations of notification or reporting requirements, and other noncompliance which is likely to cause unreasonable risk of death or serious physical injury.  In other words, it appears uninterested in minor defects and highly focused on the types of problems that would put car drivers and their passengers at risk of death or other accidents.  It is fairly clearly targeted at the wave of recent undeclared recalls after manufacturers or equipment suppliers knew or should have known about problems.


Original Information Only:  The U.S. Government is not looking for information derived from media reports or already known to the Department of Transportation.  It is looking for information derived from an individual’s independent knowledge or analysis.  In other words, the Government is not looking for the speculation of outsiders chasing a quick buck.  It is offering rewards for detailed, inside information about the operation of a company or product and its violation of the law.

Report Suspected Violations of:

Vehicle Safety Act: The Motor Vehicle Safety Act was signed into law by President Lyndon Johnson in 1966.  It requires motor vehicle and equipment manufacturers to provide timely notice of vehicles or equipment items they have determined in good faith contain a defect related to safety or fail to comply with a federal safety standard.  The Defect Information Report is required not more than five days after the manufacturer knew or should have known of the potential defect that poses an unreasonable risk to safety or results in non-compliance.

Tread Act: The Transportation Recall Enhancement, Accountability and Documentation Act (TREAD Act) was signed into law by President Clinton in 2000 following accidents caused by problems with Firestone tires on Ford Explorers. The TREAD Act requires vehicle manufacturers to report defects, injury reports and other data to the NHTSA. The purpose of the law is to give the NHTSA the data it needs to warn consumers about potential defects. Fines for failure to report under the law accumulate at the rate of $7,000 per violation per day.

Criminal Wire Fraud: The Justice Department investigates egregious cases of deceptive statements to consumers regarding auto safety issues.  The investigation and resulting enforcement action or settlement stem from criminal prohibitions on wire fraud.  If the DOJ determines enforcement is warranted, it can lead to substantial penalties.

The U.S. Government will be interested in potential violations by large auto manufacturers and part suppliers. These include auto manufacturers Toyota, General Motors, Volkswagen, Hyundai, Ford, Nissan, Fiat Chrysler, Honda, BMW, Daimler, Mazda and Mitsubishi, among others. Large part suppliers include Robert Bosch (steering, fuel systems electronics), Denso, Continental (brakes), Johnson Controls (seating and consoles), Delphi Automotive (power train, in-car entertainment), TRW Automotive (steering, suspension, braking and engine components), BASF (plastics, coatings), Toyota Boshoku (seats, door panels), JTEKT (bearings, steering systems).

Report Auto Safety Defects:

More than 50 million cars were recalled in 2014 and again in 2015 due to safety defects.  The Wall Street Journal called it an “unprecedented government crackdown on safety lapses.”  If you are an employee of an auto manufacturer, part supplier or dealer and have inside information about unsafe parts or vehicles, delayed recalls, or the failure to report required data to the NHTSA, please call our whistleblower attorneys at 1-800-590-4116 for a confidential initial legal consultation.  Given the U.S. Government’s focus right now on ensuring only safe vehicles are on the road, we expect that quality tips about problems will receive a receptive ear in the U.S. Government.

A review of past motor vehicle recalls has identified a number of critical systems where defects should be reported to the U.S. Government.  Among the areas where delayed recalls should be reported include:

Acceleration / Braking:  Defective parts that result in unintended acceleration or the inability to slow the vehicle put car occupants and others on the road at risk of severe injuries.  Certain defects in vehicle systems may also increase the risk of engine failure.  Cars with engine problems may stall or otherwise lose power while traveling on the road.

Steering Systems: Drivers of certain vehicles with defective parts may experience problems with steering.  These problems can be created by non-responsive steering wheels, the failure of power steering assistance, and defective steering shafts.

Defective Safety Systems: Seatbelts and airbags are designed to make travel by car safer.  When these systems are defective, they must be reported to the federal government and fixed.  If a company delays correcting problems with these safety systems, it puts vehicle owners and their passengers at risk.

Tires: Defective tires may be at risk of tread separation, a tire blowout, or both.  Both events can result in loss of vehicle control while operating at high speeds.  It is difficult for even an experienced driver to safely guide a car to a complete stop after a tire accident while driving on a highway.  Other problems with the tire system may be of less immediate danger, such as failures of the tire-pressure monitoring system.  Hundreds of thousands of vehicles have been recalled for defective sensors that fail to properly report changes in tire pressure.  When these sensors fail to detect underinflation or over-inflation, they can result in tire failures and damage.

Fire Risk: Defective parts in or near the engine or fuel compartment can increase the risk of a car fire.  Oil leaks near the engine compartment can also result in vehicle fires.  Manufacturing problems may result in parts that don’t function according to expectations during or after an accident, resulting in leaking gas from the fuel tank or fuel filler pipe.  Defects in the gas tank or fuel line can result in a vehicle fire or explosion during or after a side or rear impact collision.  Tens of thousands of cars have been recalled for problems in or around the fuel tank.

Vehicle Crash Testing: The federal government requires testing of cars to ensure passenger safety.  Among these tests is one for side impact crash protection, which simulates the injury to passengers from a vehicle hit in the side rather than head-on or from the rear.  If a car fails these tests, the manufacturer may be required to report it and recall the affected vehicles to correct the problem.

Wiring: The most common result from an electrical defect is a short circuit in a component of the motor vehicle.  In order to fix improper or defective wiring, the vehicle may need to be recalled and the NHTSA notified of the problem.  Improper or defective wiring can result in corrosion, overheating that results in an electrical fire, loss of power to a critical electrical system, and other dangers to safe travel.

Retaliation Protections:  We originally thought that the law left whistleblowers without protection against retaliation (similar to the IRS program) because there was no mention of the right to file a lawsuit in the Motor Vehicle Safety Whistleblower Act.  However, 49 U.S.C. § 30171 sets forth a procedure for individuals to bring a complaint concerning retaliation to the Secretary of Transportation.  The law allows them to earn reinstatement, back pay and compensatory damages, plus costs and expenses such as attorneys’ fees.  These protections were put in place by the Moving Ahead for Progress in the 21st Century Act (MAP21)

Prohibited Retaliation: An employee of a motor vehicle manufacturer, part supplier or dealership may not be discharged or otherwise discriminated against for reporting information concerning motor vehicle defects or other noncompliance to their employer or the Secretary of Transportation.  This extends so far as to the whistleblower who is about to provide information and is preemptorily fired because the employer has knowledge of the upcoming report.

The History of the Auto Whistleblower Law

Thune-Nelson: Senators Thune and Nelson introduced a bill into the U.S. Senate to reward auto industry whistleblowers in November 2014.  The NHTSA had called for a nationwide recall of defective Takata air bags as part of its investigation only a few days before.  It was also less than a year after General Motors (GM) announced its ignition switch recall.  The Senate Commerce Committee approved the legislation in February 2015 and the bill received the unanimous approval of the full Senate in April 2015.  The U.S. House of Representatives, however, had yet to act on several proposed bills to handle motor vehicle defects when the legislation went to the House for consideration.

The FAST Act: For some time, Congress has been considering the funding of our nation’s highways.  In 2014, Congress extended funding for the U.S. Highway Trust Fund for 10 months.  The nation’s highway system was deteriorating and states were delaying projects because they were uncertain of continued funding by the Federal Government.  At the end of 2015, Congress agreed to pass the Fixing America’s Surface Transportation (FAST) Act.  The bill was the first long-term funding of the nation’s road system in over a decade.  It included a number of other measures, including increasing the cap on the maximum fine imposed for delayed recalls to $105 million.  It also included the Motor Vehicle Safety Whistleblower Act, which was the proper name of the Thune-Nelson bill.

Our Auto Whistleblower Commentary

Eric Young discussed the Thune-Nelson bill with a blogger for Car and Driver Magazine in December 2014.  For the blog post titled Start Snitching: Senate Whistleblower Bill Would Reward Automaker Employee Tips on Safety Violations, click here.

Eric Young urged the adoption of the whistleblower bill shortly after the Volkswagen scandal was revealed.  His piece titled VW reinforces need for auto whistleblower law was published in The Hill’s Congress Blog in September 2015. For the blog post, click here.

Eric Young Discusses the Thune-Nelson Bill

Eric Young, a Partner at McEldrew Young and the head of our whistleblower practice, discussed the benefits and drawbacks of the bill shortly after it was proposed in the U.S. Senate by Senators Thune and Nelson.  The video, available on the left, provides an overview of the bill and discussed potential areas of concern.  We plan to make new videos shortly to cover the areas of interest to employees in the auto industry with regard to this bounty program.

Recent Blog Posts for Auto Whistleblowers

Our Whistleblower Law Practice

Our whistleblower attorneys have helped numerous employees and ex-employees report misconduct by their employer under the nation’s whistleblower laws.  Attorneys at McEldrew Young have assisted the United States with the recovery of billions of dollars lost due to fraud.  If you are considering reporting a delayed automobile recall or another violation by an auto manufacturer or OEM company, we encourage you to read more about our practice in this area, our track record, and call us if you have any questions.  We’re here to help you and we will respect your confidentiality to the utmost at all stages of the process.

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