Preventing Whistleblower Claims in the Automotive Industry

30 July 2015 Dashboard Insights Blog

Whistleblower and retaliation claims are some of the most costly claims brought by employees and they are on the rise. OSHA, who governs complaints for over 20 whistleblower statutes, reports a 58% increase in whistleblower claims between 2005 and 2014. Retaliation claims under the statutes governed by the Equal Employment Opportunity Commission have increased 70% in the same time frame.

In a move that may lead to an increase in whistleblower claims in the automotive industry specifically, Congress is currently evaluating a bill called the Motor Vehicle Safety Whistleblower Act that would incentivize valid whistleblower claims by providing payment, in certain circumstances, to whistleblower employees of motor vehicle manufacturers, part suppliers, dealerships and their contractors. If the information the whistleblower provides to the government leads to the collection of monetary sanctions (of various types) above a million dollars against the company, the whistleblower could receive up to 30% of the proceeds.

One of the often unrecognized costs of whistleblower claims is the press attention that they can garner. How a company treats internal and external complaints can make an enormous difference between having your company name in the local news for all the wrong reasons or having a happy workforce who trusts that their concerns will be addressed. Companies in today’s market are wise to pay special attention to their internal reporting and investigation procedures to minimize the risk of exposure to these types of claims.

A retaliation claim, when filed under any of the many whistleblower protection and anti-retaliation statutes has three general requirements:

  1. the worker has engaged in some type of protected activity;
  2. they have suffered an adverse employment action;
  3. and causation – the employee has to prove the adverse employment action was caused by their protected activity.

An adverse employment action can include a number of employer actions beyond termination including suspensions, reprimands, demotions, harassment or other adverse treatment that is likely to deter employees from pursuing their rights under the law in question. The question of what constitutes protected activity differs under the various whistleblower protection laws. In general it means reporting internally or externally about alleged wrongdoing of the company which violates a law.

Worth review by companies in the automotive industry, in addition to the usual whistleblower statutes that apply more broadly, is Moving Ahead for Progress in the 21st Century or “MAP-21.” MAP-21 is a broad federal transportation program and funding law that was enacted in 2012. It includes a whistleblower protection section which prohibits motor vehicle manufacturers, part suppliers, and dealerships from retaliating against employees for engaging in certain protected activities.  The protected activities include providing info relating to any motor vehicle defect or violation of NHTSA vehicle safety standards and the federal reporting requirements for auto manufacturers to their employer or the U.S. Department of Transportation. Filings, testifying or participating in a proceeding regarding an alleged violation is also protected under MAP-21. This is the type of activity that many think of when whistleblower protections are mentioned. However, in addition to these, simply objecting to or refusing to participate in any activity that the employee believes is in violation of vehicle safety laws is also protected activity under MAP-21.

Armed with some basic knowledge of the applicable whistleblower protections, employers have several tools at their disposal to help prevent whistleblower and retaliation claims:

  1. Develop clear and well publicized anti-retaliation policies and internal reporting procedures. Create a culture in your organization the encourages and supports reporting.
  2. Train and re-train your employees on these policies. A well-considered and crafted policy is worthless if it is not followed by your staff on the ground. Human Resources and any group tasked with investigations are some of the most important to ensure are well trained, but all employees should be familiar with your reporting procedures and anti-retaliation policy.
  3. Most important is documentation. Document your policies, your training, and any investigations. Documentation of all employee discipline is key to ensuring consistency and minimizing liability.

As the number of claims and monetary awards rise for whistleblower and retaliation claims, companies should review their internal policies and procedures to ensure that they are doing everything possible to avoid these claims and the financial and other stress they cause to an organization.

For more in depth information about preventing whistleblower claims in the automotive industry, including an analysis of other whistleblower laws and employer best practices – watch the “Avoiding Whistleblower Claims in the Automotive Industry” on demand.

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