Nearly seven years past its Congressionally-set deadline, the National Highway Traffic Safety Administration (NHTSA) has finally proposed rules for its legally-mandated whistleblower award program. According to whistleblower advocates, however, the regulations are deficient in ways which could undermine the efficacy of the auto-safety whistleblower program.
In January 2015, the Fixing America’s Surface Transportation Act (FAST Act) was signed into law. The FAST Act contains a whistleblower reward law for auto-manufacturing whistleblowers, the Motor Vehicle Safety Whistleblower Act (MVSWA). The Act required the Department of Transportation (DOT) to approve and publish regulations implementing its whistleblower program on or before July 6, 2016.
The FAST Act specifically called for the DOT to set forth how auto safety whistleblowers can anonymously file safety reports, how whistleblowers are ensured the full protection of confidentiality, and the requirements for qualifying for monetary whistleblower rewards. The agency’s delinquency on the rules have been covered extensively at WNN, dating back to 2016.
In 2020, the DOT confirmed to WNN that the agency had failed to publish proposed rules, and simply stated that they were “working” on such rules. At the time, Stephen M. Kohn, whistleblower attorney for qui tam law firm Kohn, Kohn and Colapinto and Chairman of the Board of Directors of the National Whistleblower Center (NWC) said “we approached DOT in 2016, requesting that they implement regulations ensuring the confidentiality of whistleblowers and explaining the reward procedures. DOT ignored this request. The Department’s failure to follow the law threatens auto safety, undermines whistleblower protections, and demonstrates contempt for the law. It places citizens at unnecessary risk for injury or death due to correctable motor vehicle safety issues.”
On April 14, 2023 the NHTSA published proposed rules to implement the whistleblower provisions of the MVSWA. These proposed rules were published 2,473 days after the deadline set by Congress for final rules to be implemented.
In Kohn’s opinion, the rules finally proposed by the NHTSA continue to come up short. “The agency did not exercise its discretion to ensure that all qualified whistleblowers would obtain a reward, the proposal fails to provide adequate safeguards ensuring that internal compliance programs are independent and ethical,” he said. “They even follow many of the now discredited regulations that were implemented ten years ago by the SEC.”
In its proposal released on April 14, the NHTSA acknowledged previous input and demands from the NWC. The NHTSA’s rule proposal states that “specifically, the National Whistleblower Center provided a proposal that was modeled on the SEC’s and IRS’s whistleblower reward laws.” The NHTSA will include the NWC’s comments in its docket. The initial letter from the NWC can be read here, and its second letter with detailed recommendations can be found here.
Following the publication of the proposed rules, Siri Nelson, the Executive Director of NWC, stated that “members of the public should urge the safety board to adopt the rules as initially proposed by the NWC.”
Following the publication of the rules, the NHTSA did not provide an explanation for the over 6 and half year delay in the rulemaking process. Over the years, the agency has stated that the whistleblower program for auto-safety whistleblowers has existed regardless of whether or not it had published rules outlining the program. In its recent proposal the agency confirmed the existence of its whistleblower program:
“The whistleblower protection and award provisions are statutory and not contingent on a rule being in place. NHTSA has an active, ongoing whistleblower program. During the pendency of this rulemaking, the Agency encourages whistleblowers to continue to submit information to the Agency, and notes that whistleblowers are afforded the protections contained in 49 U.S.C. 30172(f). Furthermore, a whistleblower may receive an award prior to the promulgation of the regulations, and the Agency has already issued one such award.”
However, due to the absence of regulations for the program, the auto-safety whistleblower program has floundered since the passage of the MVSWA over seven years ago. The NHTSA confirmed in its rule proposal that it has only issued 1 whistleblower award since the program was created. The award, $24 million to a whistleblower for exposing untimely recalls from the automobile manufacturer Hyundai and Kia, speaks to the high-stakes impact of fraud in the automobile sector.
Through NHTSA’s auto safety whistleblower program, individuals who voluntarily provide NHTSA original information which leads to a successful enforcement action with over $1 million in penalties are entitled to a monetary award of 10-30% of the funds collected by the government.
The NHTSA also acknowledged the abysmal success rate of whistleblowers under the current regime: “Since the FAST Act was signed into law on December 4, 2015, NHTSA has received more than 150 whistleblower submissions. The information NHTSA has learned from whistleblowers has helped the Agency identify and investigate safety issues and violations of law.” Of those 150 submissions, only one has successfully led to an enforcement action and a whistleblower award.
Without rules, it remains unclear how the agency has assessed each case and each whistleblower’s qualifications. A lack of rulemaking has led to a severe lack of accountability and oversight for DOT to implement the potentially life-saving whistleblower program that Congress established in 2015.
Furthermore, a lack of rules has likely caused an immeasurable chilling effect on potential whistleblowing. By not clearly communicating how whistleblowers may file their complaints, how their confidentiality will be protected, and how their award will be determined, the NHTSA has failed to incentivize whistleblowers in the ways Congress intended.
Whistleblower advocates are hopeful that public pressure during the public comment period will push the DOT to adopt rules consistent with those used by the highly successful SEC Whistleblower Program. The comment period closes on June 13.