In the wake of recent safety recalls of vehicles and auto parts, Congress recognized the need to expand oversight of the industry and took a similar approach as it has with the Securities Exchange Commission (SEC) and the Internal Revenue Service (IRS) – incentivizing industry insiders to be the additional eyes and ears for the National Highway Transportation and Safety Administration (NHTSA).
In December 2015, as the Jere Beasley Report previously explained, federal lawmakers passed 49 U.S.C. § 30172 or the Motor Vehicle Safety Whistleblower Act (MVSWA), establishing a new program they hope will encourage auto industry insiders to speak up, and more quickly.
Auto industry scandals, such as the General Motors (GM) ignition switch defect, Takata exploding airbags, and VW emissions cheat fraud, and attempts to cover up such wrongdoings, led to record penalties and recalls. For example, GM’s deadly ignition switch scandal, which Beasley Allen helped expose after The Cooper Firm revealed the cover-up, resulted in 51 deaths and at least 128 injuries and could have been prevented if the whistleblower in the case had been protected by the stronger MVSWA program.
For years, one of the company’s Quality Control Managers, Courtland Kelley, tried to warn company executives about the ignition switch defect, but those warnings were ignored. Righting Injustice describes how the fiercely loyal employee filed a whistleblower lawsuit in 2003 that was dismissed after a GM lawyer successfully argued Courtland did not have legal grounds to file the suit. More than a decade later, the truth he tried to expose would finally surface publicly. But only after Courtland was retaliated against by GM and the company’s cover-up imposed unnecessary suffering on many families.
The new program provides even more whistleblower protections than were offered in its precursor, the 2012 Moving Ahead for Progress in the 21st Century or MAP-21 Act. It specifically applies to auto industry insiders – those involved directly in the manufacturing or selling of vehicles and auto parts and contractors – not third parties.
The whistleblower may receive an award, 10 to 30 percent of collected monetary sanctions, if original information provided to NHTSA leads to a successful resolution of a covered action. The information is limited to claims about efforts to cover up a defect or a violation of safety regulations when such a cover up “is likely to cause unreasonable risk of death or physical injury.” Whistleblowers can report violations that occurred before the creation of the new program and regardless of where it occurred worldwide.
Despite congressional pressure to better protect auto industry whistleblowers, NHTSA has yet to publish regulations outlining how the program will operate, and the 18-month deadline for completing these regulations is set to expire this month. Whistleblowers should not be dismayed, though, but should immediately report any wrongdoing before the opportunity to do so is prevented by legal time limits.
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Are you an auto industry insider aware of a corporate cover up in the industry? If so, the MVSWA may protect and reward you for doing the right thing by reporting the cover up. If you have any questions about whether you qualify as a whistleblower, please contact an attorney at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on this website, or you may email one of the lawyers on our whistleblower litigation team: Archie Grubb, Larry Golston, Lance Gould or Andrew Brashier.
Jere Beasley Report (July 2016)