[Federal Register: February 8, 2005 (Volume 70, Number 25)]
[Notices]
[Page 6732-6733]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08fe05-135]
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DEPARTMENT OF LABOR
Employment And Training Administration
[TA-W-54,434]
Gale Group, Inc., Belmont, CA; Notice of Negative Determination
on Remand
The United States Court of International Trade (USCIT) granted the
Department of Labor's motion for voluntary remand for further
investigation in Former Employees of Gale Group, Inc. v. U.S. Secretary
of Labor, Court No. 04-00374. The Court Order was issued on October 25,
2004.
On May 20, 2004, the Department of Labor (Department) issued a
negative determination regarding eligibility to apply for Trade
Adjustment Assistance (TAA) for the workers of Gale Group, A Division
of the Thompson Corporation, Belmont, California (Gale Group). The
determination was based on the investigation's finding that the workers
at the subject facility performed electronic indexing services,
including converting paper periodicals into an electronic format,
assigning relevant index terms and occasionally writing abstracts of
articles, and thus did not produce an article in accordance with
section 222 of the Trade Act of 1974. The Notice of Negative
Determination Regarding Eligibility to Apply for Worker Adjustment
Assistance for the subject firm was published in the Federal Register
on June 17, 2004 (69 FR 33940).
In a letter dated June 16, 2004, the petitioner requested
administrative reconsideration of the Department's negative
determination. The Department affirmed its finding that the workers of
the subject firm should not be certified as eligible to apply for TAA
on the basis that the firm did not produce an article within the
meaning of section 222 of the Trade Act because the application
contained no new substantial information. Accordingly, the Department
issued a letter (dated July 13, 2004) dismissing the petitioner's
application for reconsideration. A Dismissal of Application for
Reconsideration was issued on July 16, 2004 and the Notice of Dismissal
of Application for Reconsideration was published in the Federal
Register on July 23, 2004 (69 FR 44064).
By letter dated August 1, 2004, the petitioner requested judicial
review by the USCIT. The petitioner asserted that because
``informational products are real commodities that are manufactured and
produced for sale,'' the workers produce an article and are entitled to
a new investigation to determine whether they should be certified as
eligible for TAA.
In the motion for voluntary remand, the Department indicated the
need to determine whether the workers were engaged in the production of
an article and to resolve certain ambiguities in the record.
On October 25, 2004, the USCIT granted the Department's consent
motion for voluntary remand and ordered the Department to conduct a
further investigation and to make a redetermination as to whether
petitioners should be certified as eligible for TAA.
In its remand investigation, the Department carefully reviewed
previously submitted information, contacted the company official to
obtain new and additional information regarding the work done by the
subject worker group, the products and services offered by the company,
and also solicited information from the petitioners. The main purpose
of this extensive investigation was to ascertain whether the work
performed by the petitioning worker group can be construed as
production or in support of production of an article by the firm, Gale
Group.
Petitioners allege that they are engaged in the production of CD-
ROMS and databases which are articles under the Act. The Department has
investigated each claim and has determined that the workers are not
engaged in the production of any articles because no production took
place at the subject firm during the relevant period and that a mere
shift of service functions abroad cannot support TAA certification.
The petitioners state that members of the worker group worked on
databases which were ``marketed for access by purchasers and by their
licensees initially on CD-ROMS and in electronic format, and later only
on electronic format--i.e., through a real-time internet connection.''
Supp. A.R. 77. The
[[Page 6733]]
petitioners also identify products which they allege are articles:
Infotrac, Gale E-Commerce Sourcebook, World Retail Directory and
Sourcebook, and Ward's Business Directory. Supp. A.R. 81, 82, 88, 89.
Information supplied by the subject company indicates that the
workers primarily convert paper periodicals into an electronic format,
process the electronic data so they can be indexed, and provide access
to the databases for on-line subscribers. Supp. A.R. 8-42. This
information is not contradicted by petitioners' submissions, which
indicate that the petitioners' tasks included reading and indexing
paper articles, as well as researching, entering and editing
information into the databases. Supp. A.R. 86-90.
The newly obtained information also shows that the databases are
accessed via the Internet, are neither recorded nor stored on a
physical carrier medium, such as CD-Rom, and are not mass-replicated by
Gale Group. Supp. A.R. 9-11, 94. The information further reveals that
no tangible articles are manufactured within either the subject
facility or the larger corporate entity. Id. On the rare occasion that
a customer requests paper copies of the databases, the printing is
carried out by an unaffiliated, off-site, third party copy facility.
Supp. A.R. 91. Moreover, as to these databases, Gale Group derived
revenue not from the sale of copies of the databases on a physical
carrier medium, but from customers purchasing a subscription to access
information which is stored in a server off-site, at an affiliated
location in Michigan. Supp. A.R. 9, 12.
The petitioners do not produce an article within the meaning of the
Trade Act of 1974. The Department has consistently held that the
processing of information, especially information which is created,
manipulated and stored in electronic format, is not the production of
an article for TAA purposes. Throughout the Trade Act, an article is
referenced as something that can be subject to a duty.
Telecommunications transmissions (such as electronically transmitted
text and information) are specifically exempted from duty as they ``are
not goods subject to the provisions of the tariff schedule''
(Harmonized Tariff Schedule of the U.S., 2004, General Notes, 3e). As
telecommunications transmissions, the on-line services provided by Gale
Group are not articles. Further, the Infotrac data base is available
only in the electronic format. Supp. A.R. 92.
While there is evidence in the record that seems to indicate that
these workers did work on some products that were converted into CDs,
this did not constitute the production of an article under the Act
since the CDs were produced at an unaffiliated off-site location owned
by a third party. Supp. A.R. 95. It is the production of the CDs, not
the creation of information in electronic format that constitutes
production of an article under the Act. In any case, the petitioning
workers have not contributed to any products recorded on CDs in the
last three years. Supp. A.R. 95.
It is clear that certain product lines of electronic indexing
services sold by Gale Group could be considered ``articles'' for TAA
certification purposes if they were put on a physical carrier medium
such as paper or CD-Rom. These product lines would be dutiable under
the Harmonized Tariff Schedule as recorded media. However, because Gale
Group did not replicate its electronic indexing services on recorded
media on site or at an affiliated facility, it did not produce the
article for TAA purposes of the Act and the petitioning workers at the
subject facility are not workers of the ``firm'' producing an article.
Instead, an unaffiliated facility with which Gale Group contracted
replicated certain but not all of the electronic indexing services
developed and sold by Gale Group. The unaffiliated facility produced
the article--electronic indexing services on the recorded media--that
Gale Group sold. That facility was not part of the petitioning workers
``firm'' under the longstanding regulatory definition of firm at 29 CFR
90.2 because the facility was not affiliated with Gale Group. Because
Gale Group was not part of the ``firm'' that produced the article (the
third party replicating vendor), Gale Group did not produce an
``article'' for TAA purposes.
To be eligible for TAA, workers must be engaged in activity in
support of an affiliated production facility which is eligible for TAA
certification on its own merits if their facility does not produce an
article. Because neither Gale Group nor its affiliates replicates any
product, Supp. A.R. 91 and 94, there is no qualifying production
facility of which the workers can be in support. As such, the worker
group cannot be eligible for TAA as service workers in support of a
certifiable production facility.
The petitioner further alleges that because workers lost their jobs
due to a transfer of job functions to India, petitioning workers should
be considered import-impacted.
Although the company official stated that some positions were
shifted to India and Philippines, the petitioning workers cannot be
eligible for TAA because only the shift of production, not services,
abroad is a basis for certification. Further, because informational
material that is electronically transmitted is not considered
production for purposes of TAA eligibility requirements, there cannot
be any imports following a shift of services abroad.
The Department has thoroughly investigated the matter and could not
find a basis to determine that workers of Gale Group are engaged in the
production of an article. Consequently, they are not eligible for
certification.
Conclusion
In the case of Gale Group, A Division of the Thompson Corporation,
Belmont, California, it is clearly established that the workers of the
subject facility did not produce an article, nor did they support,
either directly or through an appropriate subdivision, the production
of an article within the meaning of the Trade Act. Because the
petitioners are employees of a firm or subdivision that does not
produce or support production of an article within the meaning of the
Trade Act, they are not eligible for certification.
As the result of the findings of the investigation on remand, I
affirm the original notice of negative determination of eligibility to
apply for adjustment assistance for workers and former workers of Gale
Group, A Division of the Thompson Corporation, Belmont, California.
Signed in Washington, DC this 27th day of January 2005.
Elliott S. Kushner,
Certifying Officer, Division of Trade Adjustment Assistance.
[FR Doc. E5-486 Filed 2-7-05; 8:45 am]
BILLING CODE 4510-30-P