Activists for former VW workers told the news agency AFP early Wednesday that they had launched a formal complaint linked to long-standing claims in Brazil against the German carmaker.
A final report of a Brazilian truth commission released last December said German subsidiaries including VW collaborated with the-then regime around 1972.
The lawsuit filed Tuesday local time said 12 former employees were arrested and tortured in Volkswagen's factory at Sao Bernardo do Campo, near Sao Paulo.
Rose Cardoso, a lawyer representing some of the alleged victims, said others were laid off and placed on blacklists used by the-then regime.
Cardoso is one of several lawyers who coordinated investigatory work of the National Truth Commission which was set up in 2012 by President Dilma Rousseff to probe crimes during the dictatorship-era from 1964 to 1985.
"Volkswagen was not the only company involved, but it had a management role in Sao Paulo and even coordinated other companies," said Sebastio Neto of the Workers' Forum for Truth, Justice and Activism.
"They took me in handcuffs to the personnel department and there they started to torture me," said Lucio Bellentani, a communist activist and former VW employee.
The Brazilian lawsuit comes amid a global scandal over manipulated air pollution tests on VW diesel motors.