Photo by Bill Oxford
Earlier this year, Fiat Chrysler Automobiles (FCA) reached an $884 million settlement with consumers and various governmental agencies to resolve its longstanding diesel emissions scandal. In short, FCA was accused of programming its emissions control software in certain engines to detect when regulatory tests were being run, and manipulate the emissions down to required levels in only those situations—resulting in illegal emissions levels during normal driving conditions. FCA allegedly had violated the Clean Air Act and other federal laws and regulations, and paid significant penalties to resolve the government’s claims.
However, the DOJ and FBI have now taken their prosecution of this matter a step further. On September 24, 2019, they brought a criminal indictment against a mid-level manager at FCA. Emanuele Palma worked in the diesel drivability and emissions group at FCA, and is accused of intentionally calibrating emissions systems to produce fewer emissions when on federal test simulations than during normal driving. He is charged with lying to federal regulators by submitting applications containing false and misleading representations, as well as during in person meetings and in response to written requests for information.
The fifteen criminal counts levied include violations of the Clean Air Act, wire fraud, making false statements to multiple federal agencies, and conspiracy to defraud the United States. While similar scandals have sometimes resulted in criminal indictments of high-level executives, this case marks a more aggressive stance by the government in prosecuting an individual employee. In its press release, the DOJ emphasized that “[t]he indictment in this case should signal to corporations and individuals working for them that there are significant consequences for attempting to bypass US emissions tests and defraud the American people” and that “[c]heating government regulators, customers, and the public for increased sales and compensation will be prosecuted by the Department of Justice to the fullest extent of the law[.]”
Many times it may be natural for employees to believe that actions they take while at work or on behalf of their employer are “company” actions, and that required training sessions are simply instructions as to how the company wants its business to operate. Employers should make clear when training includes legal or regulatory requirements. As this example demonstrates, it is important for employees to understand that there can be significant consequences to violation of relevant laws and regulations—not only for the company, but for the employee personally.
For more information on this article and this topic, contact Mark Killingsworth.