Tesla Defamation Claims Should Stay in Court, Engineer Argues

Tesla Inc. wants a defamation suit filed by a former top company engineer, and sparked by Huffington Post reports, moved to arbitration under her employment contract.

But engineer Cristina Balan told a federal court May 7 she should be able to continue to litigate before it because her claims don’t stem from her job at the electric car maker or her termination.

Balan worked on car batteries during her time at Tesla, from 2010 to 2014, according to the complaint she filed in the U.S. District Court for the Western District of Washington. Tesla put her engraved name on its vehicle battery modules as a sign of how important her work was for the company, she says.

She left the company, however, in disputed, and difficult, circumstances, according to the complaint.

The Huffington Post wrote about her in a positive light in 2017, and quoted her questioning aspects of Tesla’s leadership.

Tesla hit back days later, also in the Huffington Post. But Balan says the company went too far in its public criticisms, including falsely stating that she had engaged in criminal acts. Tesla allegedly said she took company money and resources to complete a personal project, and traveled on the company’s tab to New York.

Tesla has asked the court to compel arbitration of her subsequently filed defamation suit. Citing agreements Balan signed at the beginning of two periods of employment, Tesla says her defamation claim “arises entirely from her employment.”

Balan pursued claims against Tesla over her termination in arbitration, the company says, and the statements at issue here date from the time of the arbitration. “Plaintiff’s claim in this lawsuit flows exclusively, by Plaintiff’s own allegation, from her prior arbitration against Tesla, and thus from her employment relationship,” the company says.

Balan, however, argues the defamation suit isn’t within the scope of her arbitration agreement with Tesla. It arises from statements the company made more than three years after she stopped working there, she says in her May 6 opposition brief.

The defamation suit addresses “conduct that occurred long after the termination of Plaintiff’s employment,” she says.

Balan is proceeding pro se.

Payne & Fears LLP and Lane Powell represent Tesla.

The case is Balan v. Tesla Motors Inc., W.D. Wash., No. 2:19-cv-00067, brief filed 5/6/19.