May 4, 2015 — Whistleblower legislation encourages private individuals to collaborate with the government in holding businesses accountable for their misconduct. Informants are encouraged to notify the DOJ, IRS, or SEC, for example, about fraud against the government or violations that otherwise break the law. The government recognizes that employees working inside businesses are often the first to become aware of such misconduct, which is typically covered up. To incentivize individuals with the courage to expose corporate wrongdoing,
whistleblower laws often permit informants to share in a government recovery.
Motor Vehicle Safety Whistleblower Act Incentivizes Auto Industry Whistleblowers
Following an unprecedented year of safety recalls in the automotive industry, including the
Takata airbag and General Motors’ ignition switch scandals, the United States Senate has approved a bill permitting incentives for whistleblowers willing to expose potential safety issues in the automotive industry. The bill, modeled on existing SEC and IRS whistleblower laws, is designed to encourage employees or contractors of motor vehicle manufacturers, parts suppliers, and dealerships to report if employers are concealing safety problems from regulators. Importantly, the bill includes provisions for the protection of whistleblower identities.
Under the Motor Vehicle Safety Whistleblower Act, the U.S Transportation Secretary has the discretion to award tipsters up to 30 percent of penalties obtained if the original information provided by the whistleblower results in punitive measures totaling at least $1,000,000. In determining the amount of an award made to the whistleblower, the Secretary of Transportation takes into consideration whether a whistleblower attempted to report the information internally, the significance of the information provided by the whistleblower, and the degree of assistance provided by the whistleblower and their legal representative.
The bill will potentially allow industry employees and contractors to be paid millions of dollars if they reveal dangers hidden from the public eye by automakers. In May 2014, General Motors paid a record $35-million fine to the National Highway Transportation Safety Administration over tardy ignition switch recalls. It was
widely reported that General Motors knew of its faulty ignition switch for more than a decade before issuing its first recall. Had a whistleblower revealed this information pursuant to the Motor Vehicle Safety Whistleblower Act, the informant could have been eligible to receive up to a $10.5-million share of the penalty.
The
bill, which passed through the Senate with a unanimous vote, is an important step in indentifying and resolving auto defects before they result in injuries. The Vehicle Safety Whistleblower Act is now before the House for consideration.
Whistleblowers Notify the Government About Corporate Misconduct
Informants need to understand their rights before they move to collaborate in a whistleblower action. The attorneys at Waters & Kraus have counseled many tipsters in a variety of actions involving corporate misconduct. With whistleblower lawyers in California, Texas, and the Washington D.C. area, Waters & Kraus has the knowledge and experience to protect informants’ rights and advance their interests.
Contact us by email or call our whistleblower attorneys at 800.226.9880 to discuss how we can work together to do the right thing. Jonathan R. Davis and Louisa O. Kirakosian, attorneys in Waters & Kraus’ Los Angeles office, protect tipsters throughout the whistleblower legal process.
