Cars are on the move, now we need whistleblowers to get going too
The good news is that pandemic-related supply chain constraints are easing and car sales are picking up.
Not only is the fleet growing, it is diversifying, adding engine types (including hybrids and electric) and dropping drivers. With all this production, sales, and experimentation, it is reasonable to expect safety issues to arise.
Precisely because of the prospect of such safety issues, there is a law that is supposed to provide incentives for whistleblowers in the automotive industry to report on safety hazards. Unfortunately, it is not operating at full throttle.
The National Traffic and Motor Vehicle Safety Act gives people in the automotive industry the right to submit information to the National Highway and Traffic Safety Administration (NHTSA) about safety issues and potentially obtain an award for doing so. Specifically, in specified circumstances, the law provides monetary awards to whistleblower who provide information “relating to any motor vehicle defect, noncompliance, or any violation or alleged violation of any notification or reporting requirement of the Safety Act, which is likely to cause unreasonable risk of death or serious physical injury.”
There are 3.1 million people employed in motor vehicle parts and manufacturing and retail trade. There’s another million people in repair and maintenance. That is at least 4.1 million people, who, if they see a safety issue, would be in a position to say something to NHTSA and collect an award.
It has happened before.
Once.
The most recent (and only) NHTSA Award listed on its website (they have a website that lists this!) has a case number of 2021-0001[1]
The “2021-1 and Only” award is substantial, more than $24 million, representing a 30% award (the maximum percentage a whistleblower can obtain under the law).
NHTSA has not paid anything to whistleblowers since. Meanwhile, using the whistleblower’s information, the U.S. collected at least $81 Million from Hyundai and Kia in the case and took decisive action to address what the agency alleged to be untimely engine recalls and inaccurate and insufficient recall reports.
Hyundai and Kia eventually recalled 1.6 million engines equipped with Theta II engines alleged to pose safety hazards. According to the award determination by the NHTSA the safety issue involved was deadly serious:
The Theta II engine issue related to engine failures often involving the physical breakage of critical engine components, such as connecting rods, and resulted in a total loss of motive power (i.e. a stall). In particularly severe instances, the broken components punctured the engine block, causing oil leakage and a subsequent fire. Thus, the original information provided related to a motor vehicle defect and/or alleged violations of notification or reporting requirements of the Safety Act, which is likely to cause unreasonable risk of death or serious physical injury.
Our safety is the primary concern of this law and measuring its success only in monetary terms shortchanges the effect of even this one action. The incentives are supposed to make it more possible for the NHTSA to learn about just this kind of serious defect and make it possible for them to protect everyone on the roads.
However, this award is two years old and the number “1”—just to be clear—is not followed by a “2” or, be still our hearts, a “3.”
Maybe there are no other automotive safety issues to report. Or maybe the four million people in the industry who are eligible to file a case and earn an award have not heard they can make reports. (They can report anonymously, too, through their lawyers, and still obtain an award.)
We do math here in Fraud By The Numbers to try to explain that more can be done to fight fraud. When considering a large, technically complex, profit-driven industry, it is hard to imagine only one person has witnessed conduct that puts American families at risk.
It is our job to let the world know, there is a program and there are lawyers who will help. It has worked once, so whistleblowers start your engines.
Tony Munter heads the Whistleblower Reward Practice at Price Benowitz, LLP
[1] The only other motor vehicle safety whistleblower award was issued through a court action regarding the Takata Air Bag case. It was issued prior to the formation of the NHTSA Whistleblower Office and is not listed on the NHTSA Whistleblower Website.
