Robert Saavedra v. Volkswagen Group of America, I, 20-17327

Plaintiffs are three automobile salespersons at California Volkswagen dealerships who sued Volkswagen Group of America and Volkswagen AG under California wage-and-hour law, alleging Volkswagen was a joint employer.
Plaintiffs contend Volkswagen exercised control by paying incentive compensation tied to vehicle sales and customer-survey metrics, distributing surveys that monitor performance, and requiring certifications/trainings.
Volkswagen moved to dismiss for failure to plausibly allege joint-employer status; the district court granted the motion.
On appeal, the Ninth Circuit reviewed whether Plaintiffs adequately alleged Volkswagen (in addition to dealerships) was an “employer” under California law.
The court concluded Plaintiffs’ allegations were too vague or indirect to show Volkswagen controlled wages/hours/working conditions, suffered or permitted employment, or had the kind of day-to-day control required for a common-law employment relationship.
The court declined to consider Plaintiffs’ Dynamex argument raised for the first time on appeal and noted Plaintiffs did not seek further leave to amend below.

Issue	Plaintiff's Argument	Volkswagen's Argument	Held
Whether Volkswagen exercised control over Plaintiffs’ wages, hours, or working conditions	VW pays incentive compensation and uses survey metrics and trainings to influence pay and performance	Payments/surveys/training do not plausibly show VW controls material terms of pay or day-to-day conditions; allegations lack detail	Allegations insufficient; dismissal affirmed
Whether Volkswagen "suffered or permitted" Plaintiffs to work (i.e., control over hiring/firing or the fact of employment)	Mandatory certifications/trainings and quality controls show VW can restrict who may work	Indirect/limited quality-control requirements do not amount to power over hiring, firing, or the fact of employment	Allegations do not satisfy the "suffer or permit" definition; dismissal affirmed
Whether Volkswagen had a common-law employment relationship (control of manner and means)	VW’s policies, trainings, surveys and incentives effectively controlled how salespeople performed their jobs	Plaintiffs did not allege VW had the right to control the manner and means of salespersons’ day-to-day work	No plausible allegation VW controlled the details of salespersons’ work; dismissal affirmed
Whether Dynamex’s standard applies (new on appeal)	Plaintiffs invoked Dynamex to redefine "suffer or permit"	Volkswagen and court: argument forfeited because not raised below	Court declined to consider Dynamex argument on appeal

Martinez v. Combs, 231 P.3d 259 (Cal. 2010) (sets out three alternative definitions of "employ" under California law)
Salazar v. McDonald’s Corp., 944 F.3d 1024 (9th Cir. 2019) (quality-control requirements alone generally do not create joint-employer status)
Curry v. Equilon Enterprises, 233 Cal. Rptr. 3d 295 (Ct. App. 2018) (clarifies limits of joint-employer inference from contractual authority)
S.G. Borello & Sons, Inc. v. Dep’t of Indus. Rels., 769 P.2d 399 (Cal. 1989) (common-law test centers on right to control manner and means of work)
Dynamex Operations W. v. Superior Ct., 416 P.3d 1 (Cal. 2018) (redefining aspects of employment classification; not considered on appeal here)
Estrada v. FedEx Ground Package Sys., Inc., 64 Cal. Rptr. 3d 327 (Ct. App. 2007) (emphasizes "control of details" as essence of common-law employment test)
In re American West Airlines, Inc., 217 F.3d 1161 (9th Cir. 2000) (forfeiture rule governing arguments raised for first time on appeal)