• A former Tesla engineer will get her day in court more than a decade after she separated from the company.
• Cristina Balan claims she was forced to resign after Tesla threatened to deport her colleagues; Tesla accused her of engaging in “secret” projects on company time. 
• The Supreme Court has vacated a ruling that forced a defamation lawsuit against Tesla into arbitration.

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In a case against Tesla that has been going on since the Obama era, a former employee has finally been granted permission to sue Tesla and its CEO, Elon Musk, in open court.

Last week, the Ninth Circuit of the Supreme Court threw out a lower court’s decision to force the case into arbitration—a favorable verdict for Tesla (which also forces customers into arbitration unless they opt-out when purchasing their car). The Ninth Circuit’s ruling cited the lower court’s lack of jurisdiction, opening the door for the former senior engineer, Cristina Balan, to reignite a decade-old lawsuit against the automaker she claims ruined her reputation 

Photo by: InsideEVs

Let’s back up a bit here to understand the timeline of events a bit better.

Balan was a senior engineer at Tesla who worked on the early Model S. Her contributions to the car were so significant that her initials even appear on the Model S’ battery pack. However, her time with the company was short-lived. She alleges that she was forced to resign from Tesla in 2014.

The year prior, CEO Elon Musk encouraged employees to approach anyone in the company—even the CEO directly—regarding resolving problems that would “benefit the whole company.” He even went as far as saying that employees should “consider [themselves] obligated to do so until the right thing happens.”

Balan says that she did exactly that when she sent an email to Musk to address a safety issue. Balan reportedly noted that the design of the floor mats in the Model S could interfere with the car’s brake pedal.

The engineer tells Electrek that she was then offered a meeting with the CEO. But rather than the meeting being about solving the safety concern, Balan alleges that she was met instead by a lawyer and was forced to resign. She claimed to Electrek that Tesla’s lawyer threatened to deport members of her team waiting on a green card application if she didn’t resign, an explosive allegation. InsideEVs was not able to independently confirm her story, or speak to Balan, but we’ve reached out and will update this post if we hear back.

In her resignation statement, the Romain-born engineer reportedly wrote:

I’m resigning for the position that I was put in a month ago [because] I dare to speak up to the Sr management, also [because] people that had the chance to speak up were threatened

Balan duked it out with Tesla over the resignation. She won a lawsuit against the company in 2017 over wrongful termination, which led to coverage from many news outlets, including the Huffington Post, which published a now-deleted article about Balan’s experiences.

Tesla fired back, refuting the article’s claims. The Huffington Post included a Tesla’s statement over Balan’s separation from the company:

Anyone looking objectively at Ms. Balan’s theories can see that they are patently false, and frankly, completely nonsensical. While at the company, Ms. Balan made a number of inaccurate claims about our selection of particular suppliers and supposed quality issues, all of which were investigated extensively and found to be entirely without merit.

For example, Ms. Balan was unhappy with a particular supplier that was selected by an internal group of subject matter experts who extensively studied the issue. She took it upon herself to find an alternative supplier that had no prior relevant experience and that had failed a mandatory site inspection, and was upset when that supplier was not chosen.

Additionally, with respect to complaints she made about the fabric headliners we were using, when some of them did not perfectly fit into vehicles, Tesla modified the headliner and the B-pillar sill by inserting a piece of foam to ensure a proper fit. Ms. Balan disagreed with Tesla’s engineering solution and subjectively perceived an “issue” when Tesla’s solution did not match her personal sense of what the company should have done. She also admitted that the “issue” did not impact vehicle safety in any way.

Rather than working on her assignments, Ms. Balan spent company time working on a “secret project” without her manager’s approval and booked an unapproved trip to New York at Tesla’s expense to visit a potential supplier for her own personally-created project. She also illegally recorded internal conversations within Tesla without anyone’s permission, which is clearly criminal conduct.”

Finally, contrary to Ms. Balan’s claims, despite her own misconduct, she was never fired from Tesla. She voluntarily resigned – not just once, but on multiple occasions. 

In 2019, Balan used this statement as part of a defamation lawsuit that she filed against Tesla.

Balan alleges that Tesla’s public shaming wasn’t just wrong—it was filled with lies. She noted that Tesla not only had internal emails confirming that the company was aware of her work, but that leadership had authorized it. The statement from Tesla allegedly torpedoed her career and made it difficult for her to find a job, as companies were afraid to end up on an unofficial Tesla blacklist.

 

A lower court ruled in 2022 that Balan and Tesla would need to enter into arbitration, which is now vacated thanks to the Ninth Circuit’s decision last week.

Whether or not Tesla actually committed defamation against Balan hasn’t been decided. To be clear, the new legal opinion ensures that Balan will get her day in court with Tesla over the matter—something she has been waiting for since 2019.

For Tesla, the story behind the firing is a big deal. If Balan’s allegations are true, Tesla’s reputation as one of the largest beneficiaries of the U.S. H-1B visa program could come under scrutiny yet again, especially since Musk has been accused of launching his career in the U.S. after overstaying his own student visa.

For Balan? Well, this is all about exposing Tesla—and Musk—publicly.

“This is why I started this lawsuit, to prove my innocence and to prove how vindictive this monster is. He’s pure evil […] he’s enjoying hurting people,” said Balan in an interview. “He’s forcing everybody to give up—and this is the pathetic part—their freedom of speech and the right to sue.”