Could a New ‘Whistleblower’ Law Impact Your Dealership?

Some pundits called 2014, “the year of the recall.” It was a year marked by vast recalls in the automotive industry. Approximately 64 million vehicles were recalled last year – a new record. The pressure for the recalls started with General Motors and their faulty ignition switches and ended with Congress and the world press talking to and about Takata, a maker of airbags and airbag components. Certain vehicles with Takata airbags were involved in crashes which killed seven people in the United States. The faulty ignition switch in various GM vehicles was responsible for a confirmed 50 deaths and 75 injuries.

In hopes of preventing future issues that require more recalls based on perceived or confirmed consumer safety concerns, a group of U.S. Senators are pushing a bill aimed at empowering those in the automotive industry who identify safety concerns. Sens. John Thume R-SD and Bill Nelson D-FL have introduced the Motor Vehicle Safety Whistleblower Act. In a statement, Sen. Thune said, “Ensuring the safety of American motorists is a priority, but the public’s trust has been shaken due to the record number of recalls this past year. There is much more work that needs to be done.”

This bill would give U.S. Transportation Secretary Anthony Foxx the authority to award a whistle blower a potentially significant sum. Foxx, or his successor, would be able to grant up to 30 percent of the “total monetary sanctions” for fines over $1 million dollars. Given the hefty fines that of $35 and $70 million paid by GM and Honda last year, that 30 percent would be a large number.

However, the decision to give out a reward to the whistleblower is right in the hands of whomever is the current Transportation Secretary. In order to determine if the whistleblower should get a payout, the bill states the secretary must do their due diligence and the Transportation Department authority must determine specifically “if appropriate, whether a whistleblower reported or attempted to report the information internally to an applicable motor vehicle manufacturer, part supplier, or dealership.” The whistleblower must provide new information not already known by the National Highway Traffic Safety Administration. If that whistleblower provides false information, they will then get no reward and could face prosecution.

It’s a bill that could have proved useful over a decade ago. The new “whistleblower” bill could have helped someone like Courtland Kelley in the early 2000s. A Bloomberg report about Kelley describes how as an attempted whistleblower at GM, Kelley tried to bring up concerns with his colleagues and not getting the response that he wanted, he sued GM in 2003. Kelley was able to do so by using a Michigan Whistleblower law, but the case was dismissed. The report goes on to detail how Kelley reportedly tried to point out numerous vehicle safety issues only to be told to essentially look the other way. Whether or not things happened at GM like Kelley said they did is a matter of opinion. However, the potential need for whistleblower protection seems obvious.

For dealers, this story focuses on automakers like GM, however dealerships are involved. If the bill passes, dealerships could be a place where whistleblowers could report vehicle safety concerns. Have you ever reported vehicle safety concerns to automakers? Do you think that the passage of this bill would be a good thing for dealers and automakers?