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Employment Blog

Automobile Dealerships and Part Suppliers: Unintended Consequences in Whistleblower Rules?

Authored by Russell W. Wilson
Posted on December 15, 2016
Filed under Employment

OSHA enforces laws that protect whistleblowers under 22 whistleblower statutes ranging from the Asbestos Hazard Emergency Response Act to the Wendell H. Ford Aviation Investment Reform Act for the 21st Century.  This article focuses on OSHA’s final rule under one of those statutes, the Moving Ahead for Progress in the 21st Century Act (“MAP-21”), as the rule applies to automobile dealerships and part suppliers.

On July 6, 2012, Congress enacted whistleblower protection for those who blow the whistle against motor vehicle defects (including noncompliance and violation of applicable reporting requirements) (P.L. 112-141, 49 U.S.C. 30171).  Think ignition systems that burst into flame, engines that override the braking system at highway speed, airbags that injure and kill.  A “dealership” may be liable, but Congress did not directly define that term.  Congress did define the term “dealer” elsewhere in MAP-21 to mean “a person selling and distributing new motor vehicles or motor vehicle equipment primarily to purchasers that in good faith purchase the vehicles or equipment other than for resale.”  In its Interim Final Rule (issued on March 16, 2016) that implements MAP-21, OSHA concluded, quite reasonably, that the terms “dealership” and “dealer” mean one and the same thing.  On December 14, 2016, OSHA issued its Final Rule which adopts the content of the Interim Final Rule exactly as written.  OSHA had received only one comment during the public comment period that followed the issuance of the Interim Final Rule.

The statute applies not only to a “motor vehicle” but also to “motor vehicle equipment,” which is defined as;

 “(A) any system, part, or component of a motor vehicle as originally manufactured; (B) any similar part or component, or as an accessory or addition to a motor vehicle or (C) any device or an article or apparel, including a motorcycle helmet and excluding medicine or eyeglasses prescribed by a licensed practitioner that (i) is not a system, part, or component of a motor vehicle; and (ii) is manufactured, sold, delivered, or offered to be sold for use on public streets, roads, and highways with the apparent purpose of safeguarding users of motor vehicles against risk of accident, injury, or death.”

The statute prohibits the employer (focusing here on dealerships and parts suppliers) from discriminating in any way against an employee who provides the employer with “information relating to” a “defect,” which term “includes any defect in performance, construction, a component, or material of a motor vehicle or motor vehicle equipment” (my emphasis).

Has Congress gone further than it really intended?  There is, potentially, the mischief of unintended consequences in these definitions. (Note to regulation hawks:  OSHA’s Final Rule provides procedures and deadlines for processing whistleblower complaints; Congress supplied the definitions.) 

Suppose the HR director for an automobile dealership or part supplier is contemplating disciplinary action against an employee.  How broad is the universe of things the HR director should take into account?  What if the employee has made it known that the carpet in a particular make and model is cheap and shoddy (recalling my younger years of working in a textile factory that made automotive carpet).  What if a part supplier employee has expressed negative opinions about the poor quality of certain replacement audio systems?  Or what if a motor cycle dealership sales person has disparaged a particular motor cycle helmet for whatever reason, safety-related or otherwise?  It seems that Congress may have unintentionally added non safety-related values to the whistleblower protections of MAP-21 and its implementing regulations.  HR directors for automobile dealerships of new vehicles and part suppliers should beware of the potential scope of this program.