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Measure that Offers Financial Incentives to Auto Industry Whistleblowers to Reach the Senate Floor

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Financial Incentives to Whistleblowers to Reach the Senate

Financial Incentives to Whistleblowers to Reach the Senate

A United States Senate panel unanimously voted in support of a measure that would offer financial incentives for auto industry employees who reveal safety defects.

Thirteen Republican and Democratic members of the Senate, Science and Transportation Committee voted to send the legislation to the floor of the Senate. The measure would allow whistleblowers to share in auto company penalty payments. The legislation was prompted by recalls of millions of vehicles by General Motors (GM) over faulty ignition switches and Takata Corp airbag inflators, according to Reuters.

If the measure is brought to a vote and approved by the full chamber, the bill would advance to the U.S. House of Representatives for consideration. An aide to Senate Republican leader Mitch McConnell could not say when a vote might be scheduled, Reuters reported.

Under the new legislation, employees and contractors for automakers, parts suppliers and car dealerships could receive up to 30 percent of penalties resulting from a federal enforcement action resulting in more than $1 million, as long as they agree to share original information on product defects or reporting violations with the U.S. Transportation Department or Justice Department, according to Reuters.

The Alliance of Automobile Manufacturers believes the measure could create new incentives for employees to report fraud and misconduct internally as well as to regulators, which could speed up recalls. The alliance represents 12 automakers, including GM, Reuters reported.

Last year, GM agreed to pay $35 million to settle allegations over its delayed reporting of faulty ignition switches that have resulted in 379 death claims and thousands of injury claims. Last week, Takata was given a $14,000-a-day fine for failing to fully cooperate with the federal government’s investigation into the company’s air bag inflators that have been linked to at least six deaths and dozens of injuries, according to Reuters.

“This legislation will be a powerful tool to help ensure that problems regarding known safety defects are promptly reported to safety regulators,” the committee’s Republican chairman, Senator John Thune of South Dakota, said.

Senate aides said the legislation was modeled after other whistleblower laws that urge individuals share information with the Internal Revenue Service and the Securities and Exchange Commission, Reuters reported.

breakinglawsuitnews.com disclaimer: This article: Measure that Offers Financial Incentives to Auto Industry Whistleblowers to Reach the Senate Floor was posted on Friday, February 27th, 2015 at 1:56 pm at breakinglawsuitnews.com and is filed under Misleading Information Lawsuits, Product Liability Lawsuits, Uncategorized.

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