NOT FOR PUBLICATION FILED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.

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