On July 14, the U.S. House of Representatives passed a bill that protects those in the auto industry who reveal undisclosed manufacturing defects or federal safety law violations to authorities. The Motor Vehicle Safety Whistleblower Act also provides monetary compensation for whistleblowers if the information they provide results in penalties.

The bill was introduced in 2015 after a series of major defects rocked the automotive industry. These included Tanaka’s record-setting airbag recall and General Motors’ admission it had concealed serious problems with ignition switches that had led to dozens of fatal accidents. The act is modeled on several existing federal whistleblower protection laws.

The law applies to both employees and contractors of auto manufacturers, parts suppliers, and dealerships. Whistleblowers are entitled to up to 30 percent of any penalties over $1 million if their information leads to a U.S. Department of Transportation (DOT) or U.S. Department of Justice enforcement action. The percentage is at the discretion of the DOT.

To be eligible for an award, the whistleblower must provide original information not already known to federal authorities. If subsequently implicated and criminally convicted in connection with the violation or defect they reported, the whistleblower will not receive an award. The whistleblower also must first report the information internally, unless he or she believes it will result in retaliation or the manufacturer, supplier, or dealership was already aware of the issue and intentionally failed to address and disclose it.

Crucially, the law also provides protections for whistleblowers. Their identity is kept confidential, and it also protects them from retaliation.

The Motor Vehicle Safety Act provides much-needed protections for those in the auto industry who disclose information about violations that put the public at risk. It is a significant step forward for the industry – and the country’s safety.

Tad T. Roumayah

View all posts by
Tad T. Roumayah

Tad Roumayah focuses his practice primarily on employment litigation, representing employees who have encountered discrimination, retaliation, wrongful discharge, whistleblower protection claims, wage and hour violations and other employment issues and disputes.