Under the “Motor Vehicle Safety Whistleblower Act” (the Bill), which the U.S. Senate approved on April 28, 2015, whistleblower protections and bounties would be available to individuals who report motor vehicle defects. In particular, the Bill would allow employees and contractors of automakers, parts suppliers, and dealerships to receive a monetary award for providing new information to the federal government related to motor vehicle defects and other failures to comply with federal laws that could create a risk of death or serious injury.
A whistleblower who reports such a defect could receive up to 30% of any penalty recovered above $1 million. Awards would be paid out in the discretion of the Secretary of Transportation, and would not be given to individuals who knowingly or willfully make false reports. The identity of a whistleblower will be kept anonymous, to the extent possible, until governmental proceedings related to the alleged violation begin. The Bill is now headed to the House of Representatives, where it must be approved before it heads to the President.
This proposed legislation falls in line with other recent attempts to create bounty programs, such as recently announced plans by NY Attorney General Schneiderman to propose legislation that would create a whistleblower incentive program at the state level (as discussed in our recent post). This proliferation is likely guided by the success the SEC has enjoyed through its bounty program.