On December 30, the day after Tesla CEO Elon Musk sold off $1 billion worth of his company’s stock, Tesla announced a recall of nearly half a million of its electric vehicles for safety reasons. When asked if this massive recall surprised her, former Tesla employee, automotive engineer, and whistleblower Cristina Balan responded, “There will be many other recalls like this one. Tesla has hidden many safety issues to protect their stock price.”
Balan worked at Tesla from 2010 through 2014. She was well-regarded at the company, and had been so instrumental in the design of the battery pack for Tesla’s early “Model S” sedan that, as a tribute, Tesla management incorporated her initials into the battery pack clamshell she designed.
After her work with the battery pack, Balan was moved to the interiors design team. It was then that Balan began to notice and document things that she thought would compromise the company’s products: contracts being awarded on the basis of personal relationships, safety issues with interior floor mats, and a history of such problems being covered up by managers.
She was frustrated, and seemed to find an outlet when Tesla CEO Elon Musk sent out a company-wide email that would later be hailed in the business press as an example of the “art of masterful communication.” In that email, Musk laid out his vision of what good communication should look like within Tesla. His email included this exhortation:
“Anyone at Tesla can and should email/talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the whole company. You can talk to your manager’s manager without his permission, you can talk directly to a VP in another dept, you can talk to me. . . . Moreover, you should consider yourself obligated to do so until the right thing happens.”
Balan took Musk at his word. On April 12, 2014, she sent him an email asking if they could speak directly about the issues that were worrying her.
A few days later, Balan was escorted to a small room at her Tesla workplace in Fremont, California and asked by human resources personnel to resign. Balan agreed, but only because, she claims, they threatened that if she decided to stay on, the company would deport other members of her team. This threat against her team members resonated with Balan, who is from Romania.
Despite resigning, Balan refused to believe that Musk knew what had happened.
Despite resigning, Balan refused to believe that Musk knew what had happened. On April 19, she sent another email directly to Musk, imploring him to notice her forced resignation, writing, “I am afraid to get into details, because I don’t trust who will get this email first! But they [sic] are quite a few people that we would like to talk to you and tell you what they’ve been thru . . . .”
Failing to hear back from Musk, Balan and Tesla entered mediation to resolve various issues related to her prior employment at the company. But when mediation failed, she filed an arbitration claim in April 2015. Because she had signed an arbitration agreement—an agreement in which parties agree to resolve any conflicts by pleading their respective cases before an impartial arbitrator—she was not allowed to file a suit for wrongful termination or discrimination in a regular court, or to take her case before a judge or jury.
Balan’s story was eventually told in a 2017 article in the Huffington Post. After publication, Tesla demanded that the news website publish the company’s 600-word response. In the post, Tesla contended that Balan had chosen to resign, and also that she had worked on personal projects during company time and used company money to travel without permission. (As of 2022, Tesla has never offered any evidence that either of those charges are true.)
Balan, seeing the article as an accusation of embezzlement, filed a defamation suit against Tesla in a federal court in Washington State, where she had lived since 2014. Tesla’s attorneys countered that Balan could not file a defamation suit in federal court because she was still bound to arbitration by her original employment contract.
In June 2019, U.S. Circuit Court judge Marsha J. Pechman ruled that, while some aspects of Balan’s case should remain in arbitration (and, therefore, not in public record), other aspects, including her contention of defamation, could be heard in federal court and made public.
It is not surprising that Balan, through her experience with Tesla, became an advocate against forced arbitration. Now, nearly eight years after leaving the company, Balan is driven to keep fighting. One of the things that bothers her most is Tesla’s—and, in particular, CEO Musk’s—clear intent to crush all critics and to keep information from the public.
Balan tells The Progressive that when the arbitration process first started, she cared less about any monetary amount than about being allowed access to the email she first sent to Musk. “What’s really critical is that after I start the arbitration with them, the main thing I want to know is if he actually received the email,” she says. “It was the only thing that I wanted . . . and they didn’t want to produce it.”
It took more than sixteen months for Balan to be given what she calls the “raw email” that she first sent to Musk. When she finally received it, she was able to see in the email’s metadata that it was opened by Musk, and was forwarded to Tesla’s human resources director seven minutes after it was opened. Upon learning this, Balan asked in her first arbitration for a copy of the email Musk forwarded, including any additional message from him that might be on it.
Balan says she never received that second email, even though the arbitrator ruled in a sua sponte decision that she be allowed to see it. That decision was made by the arbitrator when Balan was not present, and Balan maintains that the attorney she had employed during that arbitration did not relay that decision or the email’s contents to her for ten months.
Balan is not the only whistleblower who has seen how hard it can be to go up against Tesla and Elon Musk.
Steven Henkes, who worked as a field quality manager for SolarCity (a subsidiary that Tesla first acquired in 2016), has been trying since 2019 to inform the public about defects in the company’s solar panels that can cause fires. In a complaint he filed in 2019 with the U.S. Securities and Exchange Commission, or SEC, Henkes urged Tesla management to “shut down the fire-prone solar systems, report to safety regulators, and notify consumers,” as Reuters phrased it.
Later that year, Walmart filed a lawsuit against Tesla that was later dropped, charging that the company’s solar power system led to fires at seven stores. In March 2021, it was revealed that the U.S. Consumer Product Safety Commission was also proceeding with an investigation of the company’s solar panels and was interviewing Henkes. In a CNBC report, Henkes relayed a message through his attorney: “There continues to be a real threat of fires due to serial defects in the Tesla installations.”
Henkes was fired from Tesla in 2020, and filed his own lawsuit against the company for wrongful termination. In 2021, he filed a Freedom of Information Act request simply to learn the status of his original complaint. In response, the SEC confirmed in a September letter that “the investigation from which you seek records is still active and ongoing.”
Both Balan and Henkes must now continue to wait and pursue their separate cases through the courts. Balan is set to file an appeal of the latest decision in her case. If she wins that, she will win the right to argue her case in open court, where she hopes that her evidence of corporate wrongdoing going back nearly a decade will become a part of the public record. Henkes’s case against Tesla for wrongful termination is still pending.
And the cases just keep coming. In December 2021, six current and former employees at Tesla’s San Francisco Bay Area electric auto factory and a service center in Southern California filed a lawsuit charging that they were sexually harassed at work, and that the company knew about the harassment but failed to take any action to address it. One month earlier, Jessica Barraza, a Tesla employee in Fremont, filed a lawsuit that accused the company of “rampant sexual harassment.”
Amid all this litigation, Musk divested himself of roughly $1 billion worth of company stock on December 29, 2021, the day before the huge Tesla recall was announced. This followed Musk’s stock sale in November of enough shares to net him nearly $5 billion.
Musk urged his horde of Twitter followers to “Blow the whistle on Tesla!,” by buying a sterling silver whistle.
And stock is not all he’s been selling. Last November, Musk urged his horde of Twitter followers to “Blow the whistle on Tesla!,” by buying a sterling silver whistle (in the shape of the as-yet unreleased Tesla Cybertruck) for a mere $50.
The whistles sold out almost immediately.
Whistleblower advocates were not amused. As FBI whistleblower and Whistleblower Network News journalist Jane Turner tweeted, “We may not have sixty-five million followers, but we possess the truth.”
Musk could be forgiven for thinking he has the right to taunt whistleblowers on Twitter. On December 13, he was named as Time magazine’s “Person of the Year.” In bestowing this recognition, the magazine’s writers described Musk as a “clown, genius, edgelord, visionary, industrialist, showman, cad; a madcap hybrid of Thomas Edison, P.T. Barnum, Andrew Carnegie, and Watchmen’s Doctor Manhattan.”
Balan, asked about fighting this battle in the year 2022, says she “never imagined that Musk will ignore [the issue she raised in her email]. You know how many stories, how many whistleblowers, they went to the press, and they went public. I never thought to go public because I didn’t want to hurt Tesla.”
Balan believed in Tesla. The company and Elon Musk—“visionary” though he may be—might have better served their customers by believing her.