The National Highway Traffic and Safety Administration (NHTSA) has published a long-awaited final rule establishing regulations to implement its whistleblower program. The whistleblower program authorizes the Secretary of Transportation to pay awards to whistleblowers who voluntarily provide original information related to any motor vehicle defect, noncompliance, or violation or alleged violation of a motor vehicle safety notification or reporting requirement that is likely to cause unreasonable risk of death or serious physical injury if such information leads to successful resolution of an enforcement action with at least $1 million in penalties.
The whistleblower program was established by the Motor Vehicle Safety Whistleblower Act (the Whistleblower Act), codified at 49 USC § 30172 and adopted as part of the Fixing America’s Surface Transportation Act (the FAST Act). The Whistleblower Act amended the National Traffic and Motor Vehicle Safety Act of 1966 (the SAFETY Act) to establish whistleblower incentives and protections and authorize payment of awards by the Secretary of Transportation.
The Whistleblower Act also required NHTSA to promulgate regulations on the whistleblower requirements set forth in the statute within 18 months of enactment. NHTSA published a notice of proposed rulemaking (NPRM) to implement the whistleblower program on April 14, 2023, [1] and the December 17, 2024 final rule [2] adopts the NPRM without substantive changes.
The whistleblower program regulations (at 49 CFR Part 513) define terms, set requirements for whistleblowers to submit original information and be eligible for an award, explain how NHTSA will evaluate information and make award determinations, and establish procedures to claim awards and appeal award determinations.
A whistleblower may be any employee or contractor of a motor vehicle manufacturer, part supplier, or dealership. The whistleblower must voluntarily submit “original information” relating to any defect, noncompliance, or other violation of a notification or reporting requirement in 49 USC Chapter 301 that is likely to cause unreasonable risk of death or serious physical injury, if the original information provided “leads to the successful resolution of a covered action.”
To be considered by NHTSA, “original information” must be derived from an individual’s “independent knowledge or analysis.” A whistleblower’s “knowledge” must be factual information that is not generally known or available to the public or to NHTSA. A whistleblower’s “analysis” includes examination and evaluation of information that may be generally or publicly available, provided that it reveals information that is not generally known or available to the public.
The analysis must be the whistleblower’s own analysis but may be done alone or in combination with others. Independent knowledge or analysis may not be obtained through a communication that was subject to the attorney-client privilege or work-product doctrine or in a manner that violates federal or state criminal law.
Original information must not be known to NHTSA from any other source (unless the individual is the original source) and must not be exclusively derived from an allegation made in a judicial or administrative action, governmental report, hearing, audit, investigation, or news media (unless the individual is a source). Original information must also be provided for the first time after December 4, 2015.
It is interesting to note that these provisions broadly parallel the public disclosure bar and “original source” exception in the federal False Claims Act (FCA), although there are key differences between them. Under the NHTSA final rule, a whistleblower can report “original information” even if partially based on publicly disclosed information. The information must not be “exclusively derived from” certain public sources unless the individual is a source of the information.
By contrast, the FCA’s public disclosure bar applies when “substantially the same allegations or transactions” have been publicly disclosed, unless a relator can establish that they are an “original source.” The term “original source” is defined in the FCA but not in the NHTSA final rule, indicating that the NHTSA final rule will include a broader set of whistleblowers than the FCA.
The original information must also lead to successful resolution of a “covered action,” defined by NHTSA as any administrative or judicial action brought under 49 USC Chapter 301 (Motor Vehicle Safety) or implementing regulations that in the aggregate results in monetary sanctions exceeding $1 million, whether paid by one individual or multiple defendants. “Successful resolution” of a covered action includes a settlement or final decision or judgment in whole or in partial favor of NHTSA, the US Department of Transportation (DOT), or the US Department of Justice (DOJ).
Information can “lead to” a successful resolution if it was sufficiently specific, credible, and timely to prompt NHTSA to open an investigation, reopen a closed investigation, continue an investigation that would have otherwise ended, or investigate a different violation in connection with an ongoing investigation. NHTSA will also consider information that relates to conduct already under investigation if the information significantly contributes to the success of the action.
Potential whistleblowers must provide original information by submitting a Form WB-INFO to NHTSA’s Office of the Chief Counsel, signed under penalty of perjury. The potential whistleblower may provide the information anonymously by having a legal representative submit the form on their behalf. The legal representative is required to verify the potential whistleblower’s identity and independently review the form and information for accuracy.
Form WB-INFO requires the potential whistleblower to provide certain information including the motor vehicle manufacturer, parts supplier, or dealership at issue; details about the alleged violation or noncompliance; description of supporting materials and their availability and location; how the potential whistleblower learned about or obtained the information; and any other relevant information. DOT and NHTSA are prohibited from disclosing any information that could reasonably be expected to reveal the identity of a whistleblower, unless disclosure is required in connection with a public proceeding instituted by DOT, NHTSA, DOJ, or another federal government agency, the whistleblower provides prior written consent to be disclosed, or the Secretary or other DOT employee receives the information from another source, such as during an inspection or investigation, and has authority under another law to release the information.
While the final rule details precise submission requirements, NHTSA retains discretion to waive those requirements for good cause and pay an award to a whistleblower who fails to comply with the specified procedures.
After a successful resolution of a covered action, NHTSA will publish a “Notice of Covered Action” on its website and whistleblowers will have 90 days to file a claim for an award based on that action. NHTSA will then evaluate all claims to ensure compliance with the regulatory requirements.
Notably, NHTSA will consider the “statutory purpose of incentivizing whistleblowers” when making award determinations. Whistleblower awards will be set between 10% and 30% in total of monetary sanctions collected in a covered action. Whistleblowers may appeal their award decisions to a federal Court of Appeals within 30 days after receiving notice of their award.
NHTSA will not pay an award to a whistleblower who is convicted of a criminal violation in federal or state court related to the covered action, or who acting on their own deliberately causes or substantially contributes to the alleged violation. NHTSA will not award anyone who submits information based on facts previously submitted by another whistleblower or who knowingly and intentionally makes or submits a document containing a false, fictitious, or fraudulent statement or representation.
Further, NHTSA will not award a whistleblower who fails to first report or attempt to report the information internally if the whistleblower’s employer has an internal reporting mechanism to protect against retaliation, except in certain circumstances.
The final rule implements NHTSA’s long-awaited whistleblower program. The new regulations lay out exacting requirements that potential whistleblowers must follow to be eligible for a reward. Rewards will only be paid to whistleblowers who provide information regarding defects, noncompliance, or notification or reporting violations that are likely to cause unreasonable risk of death or serious physical injury, not just minor or technical noncompliance.
Furthermore, reported information must be used in an enforcement action in which monetary sanctions of at least $1 million are collected. Assuming a whistleblower can clear those hurdles, NHTSA still retains discretion in deciding whether to pay a reward at all. Moreover, the burden is placed on the whistleblower to monitor NHTSA’s proceedings and file a claim for an award upon successful resolution of an enforcement action. It remains to be seen how many whistleblowers will be able to navigate these demanding requirements and to what extent NHTSA will waive them.
The final rule also highlights the importance of internal reporting mechanisms. Any potential whistleblower must internally report alleged violations before submitting information to NHTSA if a company has an internal reporting mechanism and there is no fear of retaliation.
Manufacturers, parts suppliers, and dealerships with internal reporting mechanisms in place are advised to ensure that employees are aware of and know how to use them and that employees who do report potential violations are protected from retaliatory actions.
Companies should evaluate existing internal reporting systems and offer training to both employees and management to increase awareness of how to internally report any compliance issues and avoid retaliation against those who internally report. Companies without an internal reporting mechanism should consider putting one in place. The significant benefit is early and prompt internal awareness of potential defects and noncompliance, which ideally can be resolved in a timely manner to avoid potential enforcement actions by NHTSA.
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