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Auto Industry Whistleblower Bill Approved by Senate

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May 1, 2015—The Senate passed legislation Tuesday that would encourage whistleblowers in the auto industry to come forward with information related to motor vehicle defects by offering them 30 percent of monetary penalties assessed over $1 million against those in the industry flouting federal safety laws. 

Introduced by Senate Commerce, Science and Transportation Committee Chairman John Thune (R-S.D.) in January, the bill now heads to the House, which must also provide its stamp of approval before the bill can reach the president’s desk. The legislation comes as the nation is embroiled in litigation over a record-breaking number of recalls related to defective air bags manufactured by Takata Corp. and faulty ignition switches in General Motors Co. vehicles.

“This bill provides important incentives for whistleblowers in the auto industry to bring safety concerns to the attention of federal regulators when harmful safety defects are not reported," Thune said in a Wednesday statement. "While laws and regulations currently provide certain penalties for unaddressed safety failures, this legislation seeks to help identify and stop problems before anyone is killed or seriously injured.”

The Motor Vehicle Safety Whistleblower Act, S. 304, would allow employees or contractors of automakers, parts suppliers and dealerships to glean an award for offering up novel information to the federal government on motor vehicle defects or other failures to comply with federal safety laws that could create a risk of death or serious injury.

The bill takes into account if the whistleblower had the opportunity to report the problems internally and the significance of the information. It appoints the secretary of the U.S. Department of Transportation to oversee who qualifies as a whistleblower and how much they are awarded.

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