Motor Vehicle Whistleblower Act Aims to Reduce Defect-Related Accidents

In the wake of several high-profile, and deadly, motor vehicle accident cases, the U.S. Senate has approved an incentive for automotive industry whistleblowers. The Thune-Nelson Motor Vehicle Safety Whistleblower Act encourages auto industry employees, contractors, and others to report vehicle defects and other safety problems that could result in serious injury or death. The incentive is quite substantial. In fact, if penalties are imposed by the Department of Transportation or U.S. Department of Justice, whistleblowers may receive up to 30 percent of penalties in excess of $1 million.

The intent of the act is to encourage auto employees, contractors, manufacturers, suppliers, and dealerships to report information that could prevent unnecessary accidents. The legislation is modeled after existing Internal Revenue Service and Securities and Exchange Commission whistleblower protections that help prevent tax fraud and illegal investment activities.

Bipartisan Act Will Encourage Automotive Workers to Report Safety Defects

The Thune-Nelson Motor Vehicle Safety Whistleblower Act was approved by the Senate Committee on Commerce, Science, and Transportation in November of last year. United States Senators John Thune and Bill Nelson introduced the bipartisan Act. “While I believe most manufacturers are dedicated to putting vehicle safety first, there have been disappointing examples where that did not happen and Americans died and sustained serious injuries,” Thune stated. “This legislation will be a powerful tool to help ensure that problems regarding known safety defects are promptly reported to safety regulators.”

“The auto industry needs to be held accountable if it makes decisions that result in serious injuries or deaths,” Nelson said, “ And, one way to do that is to encourage insiders to come forward and tell the truth.”

Faulty Ignition Switch in GM Vehicles Linked to 153 Deaths

In the last two years, several major automotive defects resulted in multiple fatalities, and subsequent recalls by companies such as Honda and General Motors. A defect in Takata air bags is linked to five deaths and 30 injuries in Honda vehicles. A faulty ignition switch in GM vehicles has been linked to 153 deaths. In May of this year, GM paid $35 million, a record, to the National Highway Traffic Safety Administration. If that defect had been reported by a whistleblower, he or she may have been awarded up to $10.5 million based on the bill’s schedule of compensation.

The Whistleblower Act also does away with the $35 million cap on fines for automakers that purposely delay recalls. In addition, it increases the cap on per-vehicle fines from $5,000 to $25,000. Although the whistleblower payouts may seem exceptionally high, they pale in comparison to the costs of lawsuits and settlements if defects result in injury or death. More importantly, however, the Act may save lives. Considering that over 150 deaths have been linked to the GM ignition defect, this is no small accomplishment. While the vast majority of automotive workers are doing their best to produce safe vehicles, there are some exceptions. The NHTSA believes that the substantial incentive for automotive workers to report negligence and defects will significantly reduce the number of defect-related injuries and fatalities.


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