NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 6 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: VOLKSWAGEN "CLEAN DIESEL" No. 20-17327
MARKETING, SALES PRACTICES, AND
PRODUCTS LIABILITY LITIGATION, D.C. Nos. 3:16-cv-07214-CRB
______________________________ 3:17-cv-01114-CRB
3:15-md-2672-CRB
ROBERT SAAVEDRA; ARMANDO
RODRIGUEZ; MICKEY GAINES,
MEMORANDUM*
Plaintiffs-Appellants,
v.
VOLKSWAGEN GROUP OF AMERICA,
INC.; VOLKSWAGEN
AKTIENGESELLSCHAFT, a German
corporation,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Charles R. Breyer, District Judge, Presiding
Argued and Submitted November 18, 2021
San Francisco, California
Before: PAEZ, WATFORD, and FRIEDLAND, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Plaintiffs, three salespersons at car dealerships in California, bring various
wage-and-hour claims against Volkswagen Group of America and Volkswagen
AG (“Volkswagen”) under California law. Such claims may only be brought
against an employer, and Plaintiffs allege that Volkswagen is their joint employer,
along with their respective dealerships. Volkswagen moved to dismiss the
Complaint, arguing that Plaintiffs failed to plausibly allege that Volkswagen is
their joint employer. The district court granted Volkswagen’s motion to dismiss,
and we affirm.
Under California law, an “[e]mployer” is one “who directly or indirectly, or
through an agent or any other person, employs or exercises control over the wages,
hours, or working conditions of any person.” Cal. Code Regs. tit. 8, § 11070(2)(F).
In Martinez v. Combs, 231 P.3d 259, 278 (Cal. 2010), the California Supreme
Court explained that “[t]o employ . . . has three alternative definitions.” It means
first, “to exercise control over the wages, hours or working conditions”; second,
“to suffer or permit to work”; or third, “to engage, thereby creating a common law
relationship.” Id.
Plaintiffs fail to adequately allege that Volkswagen exercises control over
their wages, hours, or working conditions. Plaintiffs’ main argument is that
Volkswagen controls their wages by paying them “incentive compensation” for
selling Volkswagen cars as well as for reaching a target score in a Volkswagen
2
metric based on customer surveys. But the Complaint provides few details
regarding how much salespersons are allegedly compensated, or whether the
incentive payments are a material fraction of their compensation. Without more,
Plaintiffs’ allegations do not suffice. Control over wages requires more than just
any impact on an individual’s pay. See, e.g., id. at 283-84; Curry v. Equilon
Enters., 233 Cal. Rptr. 3d 295, 304 (Ct. App. 2018). Plaintiffs also assert that
Volkswagen monitors their performance by disseminating consumer surveys. But
the Complaint indicates that Volkswagen simply uses the surveys to determine
incentive compensations. To the extent the survey results affect day-to-day
operations, that appears to result from dealerships’ decision to rely upon the survey
results, not from Volkswagen exercising control over salespersons. Finally,
Plaintiffs argue that Volkswagen required salespersons to complete various
certifications and trainings. These requirements are best understood as quality
control measures, which generally do not create a joint employment relationship.
See Salazar v. McDonald’s Corp., 944 F.3d 1024, 1029-30 (9th Cir. 2019).
Plaintiffs also fail to adequately allege that Volkswagen suffers or permits
them to work. Plaintiffs again point to Volkswagen’s allegedly mandatory
certifications and training. But with little information as to their frequency or
content, these certifications and trainings seem more akin to conditions of
employment focused on quality control. Such indirect and limited power over
3
Plaintiffs’ ability to work at dealerships is not enough. See id. at 1030-31
(explaining that “the ‘suffer or permit’ definition pertains to responsibility for the
fact of employment itself”—that is, the “power over hiring and firing”); see also
Curry, 233 Cal. Rptr. 3d at 311 (concluding that contractual “authority to have [a
plaintiff] removed . . . upon ‘good cause shown’” did not suffice for the “suffer or
permit” definition).1
Finally, Plaintiffs fail to plausibly allege that Volkswagen engages with
them in a manner that creates a common law employment relationship. Plaintiffs’
allegations do not indicate that Volkswagen had a right to control “the manner and
means” by which salespersons sell cars. S.G. Borello & Sons, Inc. v. Dep’t of
Indus. Rels., 769 P.2d 399, 404 (Cal. 1989). Nor have Plaintiffs alleged that
Volkswagen is involved in the details of Plaintiffs’ day-to-day experiences at
dealerships. See Curry, 233 Cal. Rptr. 3d at 306 (“The essence of the common law
employment test ‘is the “control of details”—that is, whether the principal has the
right to control the manner and means by which the worker accomplishes the
1
Plaintiffs also argue that Dynamex’s definition of “suffer or permit” applies
here, Dynamex Operations W. v. Superior Ct., 416 P.3d 1 (Cal. 2018), but they did
not raise that argument in the district court. They provide no compelling reason to
consider the argument for the first time upon appeal. See In re Am. W. Airlines,
Inc., 217 F.3d 1161, 1165 (9th Cir. 2000). Accordingly, we do not consider it here.
4
work.’” (quoting Estrada v. FedEx Ground Package Sys., Inc., 64 Cal. Rptr. 3d
327, 335 (Ct. App. 2007))).2
AFFIRMED.
2
Plaintiffs have not challenged the district court’s denial of further
opportunity to amend their complaint, or otherwise argued that they could remedy
any of these deficiencies by amending their complaint.
5