## Facts

- Former employees of Qimonda North America Corporation and Qimonda Richmond LLC sued Infineon Technologies AG, Infineon Technologies North America Corporation, and Qimonda AG for unpaid severance and layoff-related liabilities.
- The Qimonda U.S. entities were wholly owned through Qimonda AG, which had been controlled by Infineon Technologies AG as a majority owner.
- Plaintiffs alleged the companies operated as an integrated “group,” including shared services (e.g., human resources, legal, accounting), overlapping leadership, and consolidated financial reporting.
- Plaintiffs alleged Infineon exercised de facto financial and managerial control over Qimonda, including providing financing and installing Infineon personnel into Qimonda’s leadership.
- During the 2008–2009 downturn, Qimonda’s U.S. operations closed facilities and terminated employees in alleged mass layoffs.
- Plaintiffs alleged the U.S. subsidiaries were undercapitalized and became insolvent after being required to remit a large share of revenue to Qimonda AG.
- Plaintiffs asserted entitlement to benefits under an “Infineon Group Severance Plan” and alleged some employees waived severance based on relocation or delayed-payment promises that were not kept.
- Plaintiffs alleged inadequate notice under the federal WARN Act and the California WARN Act.
- The Qimonda U.S. subsidiaries were in Chapter 11; plaintiffs pursued claims against them in bankruptcy court and sued the non-debtor entities in district court.

## Issues

1. Whether the complaint plausibly alleged alter-ego (veil-piercing) facts sufficient to pursue Infineon entities for employment-related liabilities connected to the Qimonda U.S. subsidiaries.
2. Whether the complaint plausibly alleged that Infineon and Qimonda entities constituted a single employer under the WARN Act based on Department of Labor factors.
3. Whether the statutory and common-law claims against the Infineon defendants met Rule 8 plausibility requirements to survive Rule 12(b)(6).
4. Whether the court should alternatively stay the case or require a more definite statement given parallel bankruptcy proceedings.

## Decision

- The court denied Infineon Technologies AG and Infineon Technologies North America Corporation’s motion to dismiss.
- The court held the complaint plausibly alleged alter-ego liability, including undercapitalization, insolvency, and alleged siphoning of funds, supporting the inference of a single economic entity and potential injustice if separateness were enforced.
- The court held the complaint plausibly alleged WARN single-employer liability under the Department of Labor multi-factor framework, citing allegations of common ownership, overlapping directors/officers, de facto control, unity of personnel policies, and operational dependency.
- The court declined to dismiss ERISA and wage-payment claims at the pleading stage where plaintiffs tied alleged severance obligations to a group severance plan and to defendants’ asserted control and integration.
- The court allowed common-law claims (including breach of contract, fraud, and equitable estoppel) to proceed based on alleged severance-related promises and reliance.
- The court denied the alternative requests to stay the action or require a more definite statement.

## Legal Principles

- Under Rule 12(b)(6), a complaint survives dismissal when factual allegations, taken as true, plausibly state a claim for relief.
- Under Delaware veil-piercing doctrine, a plaintiff must plausibly allege (1) operation as a single economic entity and (2) an element of fraud or injustice if corporate separateness is honored; relevant considerations include undercapitalization, insolvency, and siphoning of funds.
- For WARN Act liability, related entities may be treated as a single employer when Department of Labor factors (including common ownership, common directors/officers, de facto control, unity of personnel policies, and dependency of operations) plausibly support joint responsibility.
- Parallel bankruptcy proceedings involving debtor subsidiaries do not automatically require dismissal or a stay of claims against non-debtor affiliates when the complaint adequately pleads independent bases for liability.

## Conclusion

The court permitted former employees’ severance and WARN-related claims to proceed against Infineon entities by holding that the complaint plausibly alleged both alter-ego facts and WARN single-employer facts, making dismissal and related procedural relief inappropriate at the pleading stage.


Blair v. Infineon Techs. AG, 720 F. Supp. 2d 462 (D. Del. 2010)