The more than doubling of the previous record for automotive recalls last year – 60 million-plus vehicles – was the result of someone taking a stand and now legislation aimed at protecting future whistleblowers has passed the U.S. Senate and is awaiting a vote in the House.
The Motor Vehicle Safety Whistleblower Act, which was first proposed in November, permits incentives for whistleblowers – in the millions of dollars – if they reveal dangerous products or practices by automakers.
The bill allows the U.S. transportation secretary discretion to award up to 30% of the total monetary penalties resulting from Department of Transportation or Justice Department enforcement actions that total more than $1 million. The bill covers employees or contractors of motor vehicle manufacturers, parts suppliers and dealerships.
In short, if an automaker is fined the current maximum of $35 million, the whistleblower could be awarded $10.5 million.
“This bill provides important incentives for whistle-blowers in the auto industry to bring safety concerns to the attention of federal regulators when harmful safety defects are not reported,” said Senate Commerce chairman John Thune, R-S.D.
“While laws and regulations currently provide certain penalties for unaddressed safety failures, this legislation seeks to help identify and stop problems before anyone is killed or seriously injured.”
(Feds push for new laws to speed recalls, raise fines. For more, Click Here.)
The bill, which is now before the House awaiting a vote, covers “original information.” In short, the whistleblowers need to provide information to federal officials that they did not already know about a defect, reporting violation or some form of non-compliance that could cause a “risk of death or serious injury.”
(Click Here for details Ford’s recall of nearly 600K vehicles.)
The bill is modeled on existing statutory whistleblower protections for individuals that share information with the Internal Revenue Service and the Securities and Exchange Commission. It’s part of a concerted effort to improve the enforcement of capability of the National Highway Traffic Safety Administration.
(To see how motorists make it easier for thieves to steal cars, Click Here.)
The Obama Administration has proposed tripling NHTSA’s budget for defects detection budget and doubling its staff while increasing the amount automakers can be fined 10-fold from $35 million to $350 million for violations.