Cristina Balan, a former Tesla (TSLA, Financials) engineer, revived her long-running legal fight against the electric vehicle manufacturer and Chief Executive Officer Elon Musk after winning an appeal in the U.S. Court of Appeals for the Ninth Circuit.
Balan, who worked at Tesla until 2014, raised concerns about a potential safety issue involving carpets curling underneath vehicle pedals, which she said could impair braking. After reporting the issue, she alleged she faced hostility from management and ultimately lost her job. She later prevailed in a wrongful dismissal case but was subsequently publicly accused by Tesla of misusing company resources for a "secret project," an allegation she has denied.
In 2019, Balan filed a defamation lawsuit against Tesla and Musk. The case was moved to arbitration under the terms of her employment contract, where an arbitrator dismissed her claims based on California's statute of limitations, stating too much time had passed since the alleged defamatory statements were made.
Tesla sought to confirm the arbitration decision through a district court, but Balan appealed. The appeals court ruled that the district court lacked jurisdiction to confirm the award and ordered the case to be dismissed, allowing Balan to pursue further legal action.
Balan said she plans to seek a new trial in open court, expressing confidence that she can now move forward. During the legal battle, she also fought stage-3B breast cancer and said clearing her name remains a primary motivation.
Her attorney said the ruling revives her opportunity to either secure a new arbitration or obtain a public trial. Legal experts say the case could continue for some time before reaching a resolution.
