The National Highway Traffic Safety Administration (NHTSA) has issued a whistleblower award of over $24 million to a former safety engineer for Hyundai who reported to NHTSA in 2016 that the company was failing to address a design flaw linked to its Theta II engines, leaving the engines prone to seizing up and even catching fire. For bringing this serious matter to the NHTSA’s attention, the whistleblower will receive the maximum award of 30 percent of the government’s recovery, under the Motor Vehicle Safety Whistleblower Act of .
NHTSA’s investigation found that Hyundai and its Kia subsidiary had delayed recalling their vehicles with the Theta II engines, and that the automaker had provided inaccurate information about the problems. In November 2020, the companies entered into consent orders with the NHTSA. The companies agreed to pay combined penalties of $210 million – including $81 million paid to the government in cash – and to implement new safety measures. The whistleblower will receive 30 percent of the $81 million cash payment, or $24.3 million.
The whistleblower noted, “I am pleased that I have been justly compensated for the risks I took to protect owners of these defective cars, and grateful that the U.S.’s legal system had a program in place to make this possible. I hope my reporting leads to real safety improvements, both at Hyundai and throughout the industry.”
NHTSA’s Deputy Administrator emphasized the crucial role that whistleblowers play: “Whistleblowers play a crucial role in bringing information to NHTSA about serious safety problems that are hidden from the agency. This information is critical to public safety and we are committed to rewarding those who bring information to us.”
The Motor Vehicle Safety Whistleblower Act, 49 U.S.C. § 30172, created a whistleblower reward program for those who provide information to safety regulators about defects in vehicles. The program applies broadly to safety-related vehicle and vehicle-equipment defects, including failures to notify the government of such defects.
Examples of previous safety-related violations for which a whistleblower could have received an award under the program include Takata’s airbag ruptures, GM’s alleged ignition switch defects, and Toyota’s alleged “sticky” pedals that caused unintended acceleration. Issues concerning self-driving vehicles, as well as the use and failure of low profile tires, are currently under investigation, and individuals with inside information about either of those (or other) issues are encouraged to speak with an NHTSA whistleblower lawyer.
Under the Act, the NHTSA may award a maximum of 30 percent of collected monies to a whistleblower who contributes significant information to a case that results in penalties of more than $1 million. The law also protects whistleblowers from retaliation and protects their confidentiality.