Congress recently passed the Fixing America’s Surface Transportation (FAST) Act, which took effect in December 2015. The Act includes an amendment to the National Traffic and Motor Vehicles Safety Act, known as the Motor Vehicle Safety Whistleblower Act. This new statute is located at 49 U.S.C. § 30172 and operates much like the SEC whistleblower program; however, it’s for the Department of Transportation.

As is the case in other False Claim Act litigation, a whistleblower may receive an award, 10 to 30 percent of collected monetary sanctions, if original information is provided to the Secretary of Transportation and that information leads to a successful resolution of a covered action. 49 U.S.C. § 30172(b).

The Act defines the term “whistleblower” as “any employee or contractor of a motor vehicle manufacturer, part supplier, or dealership who voluntarily provides to the Secretary original information relating to any motor vehicle defect, noncompliance, or any violation or alleged violation of any notification or reporting requirement of this chapter, which is likely to cause unreasonable risk of death or serious physical injury.” 49 U.S.C. § 30172(a)(6). Therefore, a whistleblower must be an employee or contractor of a motor vehicle manufacturer, part supplier, or dealership.

Original information means the information supplied to the Secretary is the independent knowledge of the individual and the information is not already known to the Secretary from any other source. 49 U.S.C. § 30172(a)(3). There is an exception which makes information known to the Secretary of Transportation from another source still fall under original information. Id. The exception is if the whistleblower is the original source of that information. Id. This exception applies across, what seems, all venues − including judicial or administrative actions, governmental reports hearings, audits, investigations, and even news media. Id.

Finally, a covered action means any action brought by the Secretary of Transportation or Attorney General under this chapter that in the aggregate results in monetary sanctions exceeding $1,000,000. 49 U.S.C. § 30172(a)(1). Therefore, when the Secretary of Transportation or Attorney General brings an action under this chapter based on the information an employee or contractor whistleblower provides then they will be considered for an award of 10 to 30 percent of the monies recovered. Also noteworthy is the fact that this program provides protection of the whistleblower through confidentiality of their identity. See 49 U.S.C. § 30172(f).

There are factors the Secretary of Transportation shall take into consideration in determining an award, including any “additional factors as the Secretary considers relevant.” U.S.C. § 30172 (c)(1)(B)(iv). The Secretary does not have as much discretion when it comes to determining the denial of an award. However, no award shall be provided when one of five scenarios occurs.

  • First, there shall not be an award provided if the whistleblower is convicted of a criminal violation related to the covered action. Id.
  • No award shall be issued if the whistleblower deliberately causes or substantially contributes to the alleged violation, unless the action was under the direction of the manufacturer, part supplier, or dealership. Id.
  • There shall not be an award if the information provided to the Secretary is based on the facts underlying the covered action of another, previous, whistleblower. Id.
  • The whistleblower will not receive an award if they fail to provide original information to the Secretary in such form, which may be required by regulations. Id. However, there have not been any regulations promulgated concerning this whistleblower provision as of yet.
  • Finally, the whistleblower shall not receive an award if the manufacturer, part supplier, or dealership had an internal reporting system to protect their employees from retaliation and the whistleblower failed to use that system. Id.

 

The Department of Transportation is required by the new law to issue proposed regulations outlining how the program will operate within the next year. However, at this time the statute is in effect and potential whistleblowers should act quickly in order to timely file a tip with the Department of Transportation under the law. To that end, it is highly recommended that any potential whistleblower contact a lawyer who is familiar with whistleblower provisions of other similar statutes, such as the Securities and Exchange Commission (SEC), U.S. Commodity Futures Trading Commission (CFTC), and Internal Revenue Service (IRS) whistleblower programs, and the False Claims Act. Beasley Allen has an entire section of lawyers and support staff dedicated to whistleblower law and are experienced in advising potential whistleblowers of their potential options.

This Department of Transportation whistleblower program operates much like the SEC whistleblower program, a successful program in its own right and one that has recovered hundreds of millions of dollars. Currently, there are an unprecedented number of motor vehicle recalls involving makes and models both new and used alike. The Department of Transportation’s new whistleblower program could not have come at a better time.

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