Cristina Balan v. Tesla, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: March 22, 2021
• Docket: 19-35637
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAR 22 2021 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

CRISTINA BALAN, No. 19-35637

Plaintiff-Appellee, D.C. No. 2:19-cv-00067-MJP

v. MEMORANDUM* TESLA, INC.,

Defendant-Appellant.

Appeal from the United States District Court for the Western District of Washington Marsha J. Pechman, District Judge, Presiding

Submitted March 2, 2021** Seattle, Washington

Before: RAWLINSON and BYBEE, Circuit Judges, and MOSKOWITZ,*** District Judge.

Appellant Tesla, Inc. (“Tesla”) appeals the district court’s order denying in

part its motion to compel arbitration of Appellee Cristina Balan’s (“Balan”)

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Barry Ted Moskowitz, United States District Judge for the Southern District of California, sitting by designation. defamation claims. Balan alleged that various post-termination statements Tesla

made in a written response to a HuffPost article were defamatory. The district

court held that Tesla’s “statements about [Balan] seeking an alternative supplier

with performance issues, writing irrelevant emails, engaging in employment-

related misconduct, and resigning,” in addition to “Tesla’s statement that [Balan]

was working on a ‘secret project’ during company time,” all arose from or related

to her employment or termination thereof, and thus fell within the scope of the

parties’ employment arbitration agreement. However, the district court found that

Tesla’s statements that Balan “illegally recorded internal conversations within

Tesla” and “booked an unapproved trip to New York at Tesla’s expense” were

outside the scope of the arbitration agreement, and thus denied in part Tesla’s

motion to compel arbitration with respect to those statements. We have

jurisdiction pursuant to 9 U.S.C. § 16(a)(1)(B). We reverse the district court’s

partial denial of Tesla’s motion to compel arbitration.

“The district court’s decision to grant or deny a motion to compel arbitration

is reviewed de novo.” Bushley v. Credit Suisse First Bos., 360 F.3d 1149, 1152

(9th Cir. 2004).

1. The parties’ arbitration agreement covers claims “arising from or relating

to” Balan’s employment, or the termination thereof. Therefore, the scope of the

arbitration agreement encompasses any disputes that have “a significant

2 relationship to,” or at least “some direct relationship” with Balan’s employment or

termination thereof. See Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 721 (9th Cir.

1999) (“the language ‘arising in connection with’ reaches every dispute between

the parties having a significant relationship to the contract and all disputes having

their origin or genesis in the contract”); United States ex rel. Welch v. My Left Foot

Children’s Therapy, LLC, 871 F.3d 791, 798 (9th Cir. 2017) (“‘arising out of’ and

‘related to,’ mark a boundary by indicating some direct relationship”). Balan’s

defamation claims are arbitrable if the underlying factual allegations “touch

matters” covered by the defined scope of the arbitration agreement, with any

doubts resolved in favor of arbitrability. See Simula, 175 F.3d 716 at 721 (“factual

allegations need only ‘touch matters’ covered by the contract containing the

arbitration clause and all doubts are to be resolved in favor of arbitrability”).

The district court characterized Tesla’s statement that Balan “booked an

unapproved trip to New York at Tesla’s expense” as a statement that only

implicated potentially criminal conduct. However, the statement also involves a

dispute about Balan’s conduct in her capacity as an employee, which has a direct

relationship to her employment, and thus falls within the scope of the arbitration

agreement. Resolving the defamatory nature of the statement—whether any

planned trip to New York was “unapproved”—requires some understanding of

Balan’s employment, including whether she was bound by any company policies

3 and procedures to obtain advance approval when booking work trips, whether she

actually received company approval for any planned trip, and whether the planned

trip fell within the scope of her employment duties and responsibilities. Because

the factual allegations regarding Tesla’s statement go towards showing that Balan

violated company policies and procedures, Balan’s defamation claim touches on

matters within the scope of the arbitration agreement, and is therefore arbitrable.

2. With respect to Tesla’s statement that Balan “illegally recorded internal

conversations within Tesla,” while perhaps a closer case, the statement is at least

susceptible to an interpretation that it has some direct relationship to Balan’s

employment, and all doubts are to be resolved in favor of arbitrability. See id.

Resolving the defamatory nature of the statement—whether Balan’s conduct was

illegal—depends on the confidential nature of the recorded conversations and the

privacy expectations of the involved employees who were recorded. This requires

at least some understanding of Balan’s employment with respect to her workplace

environment, including the public or private nature of the office spaces where any

recorded conversations took place, and any company policies regarding

employees’ expectations of privacy and confidentiality as to meetings conducted in

office spaces during office hours, and in the ordinary course of business. Balan’s

defamation claim is related to her employment, and is therefore arbitrable.

The district court’s partial denial of Tesla’s motion to compel arbitration is

4 REVERSED and the case is REMANDED.1 The parties shall bear their own

costs on appeal.

1 Balan’s motion for judicial notice (Docket Entry No. 84) is DENIED.