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Takata whistleblowers to get $1.7 million from bankruptcy fund

The Motor Vehicle Safety Whistleblower Act may not be completely up to speed, but three former Takata employees will still get their awards. They blew the whistle on the auto parts manufacturer in the largest recall in automotive history. The recall involves faulty air bag inflators installed by 19 automakers into millions of vehicles.

The Motor Vehicle Safety Whistleblower Act was passed in 2015. It offers an award to auto industry employees who blow the whistle on vehicle safety violations. The award these whistleblowers can obtain is between 10 and 30 percent of any monetary sanction over $1 million that the government obtains based on their information.

Unfortunately, the mechanism for making awards under the Motor Vehicle Safety Whistleblower Act is not yet in place. Congress ordered the National Highway Traffic Safety Administration to write those rules in 2017, but the agency is not finished.

Luckily for the three Takata whistleblowers, their awards are no longer a matter of speculation. Takata, which has declared bankruptcy over the massive recall, has agreed to pay the awards out of a reserve fund set up for the bankruptcy.

According to a law firm representing two of the whistleblowers, the former Takata employees gave the federal government substantial assistance in its criminal case against the auto parts manufacturer.

According to Reuters, at least 22 people have died and hundreds more have been injured due to malfunctioning Takata air bag inflators. The parts can explode upon deployment of the air bag, spraying metal shrapnel through the passenger compartment.

According to one of the whistleblowers, Takata knew about the problem as early as 1999, long before any recalls were initiated. In 2017, Takata pled guilty to one felony count of wire fraud. It also agreed to settle the case for $1 billion.

Whistleblower to remain anonymous

The Motor Vehicle Safety Whistleblower Act allows people to blow the whistle anonymously in order to avoid retaliation. At least one whistleblower in the Takata case is taking advantage of that provision in the law, according to the law firm representing two of the three.

That person helped the government prove that Takata had "falsified data, subverted testing procedures, and concealed reports its airbags were prone to failure." The whistleblower lives near a Takata facility and now works for a large corporate manufacturer, so they fear repercussions, the firm said.

If you work in the automotive industry and are considering blowing the whistle on safety violations, we recommend contacting a lawyer familiar with whistleblower law before you take any action. Retaliation is a real threat despite being illegal under most whistleblower statutes. You should build a strong case and protect your rights before you proceed.

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