On December 12, 2024, the U.S. Department of Transportation’s National Highway Traffic Safety Administration (“NHTSA”) announced the publication of a final rule formalizing its whistleblower program. The Final Rule was officially published in the Federal Register on December 17, fulfilling an obligation established by Congress in 2015 under the Motor Vehicle Safety Whistleblower Act (“MVSWA”). 

The program provides for awards to current and former industry employees and contractors who report “original information” that leads to a successful resolution in which the federal government collects sanctions from automotive companies exceeding $1 million. Whistleblower awards can range from 10% to 30% of the collected sanctions. See 49 U.S.C. § 30172. 

Whistleblower awards are limited to recoveries for certain types of monetary sanctions. Notably, the relevant action must be brought by the “Secretary [of the Department of Transportation], NHTSA, or the U.S. Attorney General” under 49 U.S.C. Chapter 301, the part of the Motor Vehicle Safety Act (“MVSA”) containing defect and noncompliance reporting and recall provisions. 89 Fed. Reg. 101,952, 101,955 (Dec. 17, 2024) (to be codified at 49 C.F.R. § 513). Recoveries for other types of civil or criminal violations are excluded, “even if [they] involve vehicle safety issues and/or are based on facts common to an action taken under 49 U.S.C. Chapter 301.” 89 Fed. Reg. at 101,956. Actions brought by “other agencies” or “by the U.S. Department of Justice under any statute other [than] 49 U.S.C. Chapter 301” are, therefore, not covered. Although Chapter 301’s requirements are substantial, this limitation is likely to have significant implications. Companies that are involved in parallel-track or sequential enforcement actions will not face a potential NHTSA whistleblower award based on other types of alleged violations and enforcement actions. For example, any recoveries by the DOJ based on allegations of conspiracy, fraud, fraudulent statements or related violations, even if they “are based on” facts in common with a Chapter 301 violation, will not provide the basis for a MVSWA whistleblower award. 

The Final Rule’s publication follows NHTSA’s earlier publication of a Notice of Proposed Rulemaking (“NPRM”) in April 2023. NHTSA noted in the Final Rule that it “adopted the proposed rule without significant changes,” despite numerous comments on the NPRM. 

A number of the Final Rule’s features merit consideration by automotive companies. Of particular interest are (1) the Final Rule’s definition of “independent knowledge;” (2) NHTSA’s decision not to expand the internal reporting prerequisite; (3) NHTSA’s decision not to exclude directors, officers, and compliance function employees from whistleblower eligibility; (4) NHTSA’s decision not to render persons convicted of a related crime by a foreign tribunal ineligible as whistleblowers; and (5) NHTSA’s decision not to exclude information obtained by unlawful conduct subject to civil liability.