Is VW a Joint Employer Alongside California Independent Franchised Dealerships?

The Ninth Circuit is looking at joint employer claims in connection to California salespeople at independent franchised dealerships and the German automaker, Volkswagen. VW claims salespeople are overreaching with their claims, but if the Ninth Circuit finds that they are a joint employer, they could be liable for the commissions lost during the 2015 emissions-cheating scandal.

Details of the Case: Robert Saavedra et al. v. Volkswagen Group of America Inc. et al.

Court: U.S. Court of Appeals for the Ninth Circuit

Case No.: 20-17327

VW Asks Ninth Circuit to Affirm October Decision:

In October, U.S. District Judge Charles R. Breyer’s decision closed out the consolidated wage and hour action. Volkswagen AG and Volkswagen Group of America asked the Ninth Circuit to affirm the decision they cited as “carefully reasoned.”

The Plaintiffs: Robert Saavedra et al. v. Volkswagen Group of America Inc. et al.

Plaintiffs in the case are former salespeople Robert Saavedra, Armando Rodriguez and Mickey Gaines. The plaintiffs allege that due to the 2015 "clean diesel" emissions-cheating scandal Volkswagen sales experienced a significant drop that dramatically hurt their overall income. The sales people, employed by independent franchised dealerships, argued that Volkswagen AG and Volkswagen Group of America Inc. worked with the franchise dealers to provide the employment opportunity and provide compensation to the plaintiffs. If the court finds for the plaintiffs on the joint employer argument, the cited Volkswagen entities would be liable for ensuring salespeople’s wages and hours were compliant with California state law.

The Defendant: Robert Saavedra et al. v. Volkswagen Group of America Inc. et al.

Volkswagen claimed that the plaintiffs continue to attempt to create an employment relationship where none exists. Volkswagern further argues that offering training, certifications and incentives does not constitute the amount of control necessary to indicate control over pay or working conditions that make them a joint employer according to the law. VW entities insist that plaintiffs in the case created the employment relationship in order to keep the suit alive after it was dismissed twice by Judge Breyer (first in September 2019, and again in June 2020).

Overview of the Case: Robert Saavedra et al. v. Volkswagen Group of America Inc. et al.

After amendments were made to the suit, the salespeople claimed Volkswagen violated California Labor Code and Unfair Competition Law with fraudulent omissions and their lack of disclosure regarding emissions-cheating. The October ruling dismissed these claims, but the plaintiffs appealed to the Ninth Circuit to reverse Judge Breyer’s dismissal. Volkswagen expects the Ninth Circuit to reject the appeal.

If you have questions regarding employment law and how it protects California employees from wage and hour violations, get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.