January 29, 2023

Volume XIII, Number 29


January 27, 2023

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Do You Qualify to File an NHTSA Whistleblower Lawsuit?

The National Highway Traffic Safety Administration (NHTSA) recently established a whistleblower program to address safety concerns regarding motor vehicle defects, violations of the Federal Motor Vehicle Safety Standards, and violations of the Vehicle Safety Act. Like other qui tam lawsuits, NHTSA whistleblowers who come forward with valuable information regarding motor vehicle safety violations may be rewarded with significant financial compensation for their bravery.

What Issues Can Be Reported Under the NHTSA Whistleblower Program?

NHTSA whistleblowers may be eligible to receive a financial reward for reporting safety violations, including:

  • Potential vehicle safety defects: Examples include engine failure, defective airbags, and faulty breaks.

  • Noncompliance with Federal Motor Vehicle Safety Standards: These are U.S. federal regulations regarding the design, construction, performance, and durability requirements for motor vehicles sold in America.

  • Violations of the Motor Vehicle Safety Act: This law requires motor vehicle manufacturers to follow certain safety standards to reduce the likelihood of accidents.

  • Violations of any motor vehicle safety reporting requirements

Who Can Become a NHTSA Whistleblower?

According to the NHTSA, any employee or contractor who works for a motor vehicle manufacturer, a motor vehicle parts supplier, or a motor vehicle dealership is eligible to become a whistleblower and receive protections under the Vehicle Safety Whistleblower Act.

Why Should I File a Whistleblower Lawsuit?

Employees with inside information regarding vehicle safety defects or the violation of safety regulations can play a critical role in keeping our nation’s roads safer. Additionally, NHTSA whistleblowers who offer valuable information that leads to a settlement are entitled to a portion of the recovery as a financial reward. Employees of motor vehicle manufacturers who become whistleblowers are also protected from retaliation from their employers and their identities are kept hidden.

How Are NHTSA Whistleblowers Protected?

Under the Vehicle Safety Act, motor vehicle manufacturers, parts suppliers, and dealerships are prohibited from retaliating against an employee for becoming an NHTSA whistleblower or for refusing to participate in actions that violated safety regulations. If retaliation does occur, a complaint should be made to OSHA who will further investigate the complaint.

Additionally, the U.S. Department of Transportation and NHTSA in most cases are not permitted to share any details that would disclose the identity of a whistleblower.

How Are NHTSA Whistleblowers Rewarded?

If a whistleblower shares information regarding safety defects or safety regulation violations that leads to a successful NHTSA whistleblower lawsuit, the whistleblower could be rewarded financially. Whistleblowers may receive between 10 and 30 percent of what the U.S. Department of Transportation collects from the defendant vehicle manufacturer, parts supplier, or dealership. In many cases, whistleblowers who come forward about a corporation’s illegal activities or fraud receive a significant financial reward.

Successful NHTSA Whistleblower Lawsuits

Last year, Kia Motors America agreed to pay civil penalties worth $70 million for failing to issue a timely recall for an engine crankshaft defect in certain vehicles as well as for inaccuracies in defect and compliance reports. According to the NHTSA, the defect could have potentially led to engine stalling.

Hyundai Motors agreed to pay $140 million in civil penalties last year for failing to issue timely recalls regarding a potential fuel leak that could have occurred due to a low-pressure fuel hose. Heat could have caused the fuel hose to crack over time creating an engine fire hazard.

In 2020, Daimler Trucks North America agreed to $30 million in civil penalties for violations of the Vehicle Safety Act related to a number of untimely recalls. One of the recalls involved a brake light failure that could have potentially increased the risk of an accident.

© 2023 by Tycko & Zavareei LLPNational Law Review, Volume XII, Number 117

About this Author

Jonathan K. Tycko leads the Whistleblower Practice Group of Tycko & Zavareei LLP

In recent years, the laws of the United States have undergone a whistleblower revolution. Federal and state governments now offer substantial monetary awards to individuals who come forward with information about fraud on government programs, tax fraud, securities fraud, and fraud involving the banking industry. Whistleblowers also now have important legal protections, designed to prevent retaliation and blacklisting.

The law firm of Tycko & Zavareei LLP works on the cutting edge of this whistleblower revolution, taking on even the most complex and confidential whistleblower...