[Federal Register: December 7, 2005 (Volume 70, Number 234)]
[Notices]
[Page 72857-72858]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07de05-118]
[[Page 72857]]
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DEPARTMENT OF LABOR
Employment and Training Administration
[TA-W-52,050]
Merrill Corporation, St. Paul, MN; Notice of Negative
Determination on Reconsideration on Remand
The United States Court of International Trade (USCIT) remanded to
the Department of Labor for further investigation Former Employees of
Merrill Corporation v. Elaine Chao, U.S. Secretary of Labor, Court No.
03-00662 (issued July 28, 2005).
The Department's initial negative determination for the workers of
Merrill Corporation (hereafter ``Merrill'') was issued on July 22,
2003. The Notice was published in the Federal Register on July 10, 2003
(68 FR 43373). The determination was based on the finding that workers
did not produce an article within the meaning of section 222 of the
Trade Act of 1974. The Department determined that the subject worker
group was not engaged in the production of an article, but rather
engaged in activities related to document management services.
The plaintiffs did not seek administrative reconsideration by the
Department but sought judicial review by the USCIT on September 9,
2003, asserting that Merrill produces an article (documents) and that
the workers are engaged in this production.
On April 2, 2004, the Department issued a Notice of Negative
Determination on Remand for workers of the subject facility. The
determination was based on the finding that the subject company does
not produce an ``article'' within the meaning of the Trade Act of 1974.
The Notice was published in the Federal Register on April 16, 2004 (69
FR 20645).
On July 28, 2005, the USCIT remanded the matter to the Department,
directing the Department to determine whether
(1) Plaintiffs were engaged in ``production'' of printed matter or
other articles; (2) the volume of articles produced by Plaintiffs; (3)
Merrill's customers contracted for the production of printed matter;
(4) sales or production (or both) have decreased; (5) there has been or
is likely to be an increase in imports of articles like or directly
competitive with Merrill's articles; (6) any increase in imports
contributed importantly to Plaintiffs' separation from Merrill and to
its decline in sales or production; and (7) there was a shift in
production to a foreign country of articles like or directly
competitive with Merrill's articles, and if so, to what country.
For purposes of determining workers' eligibility to apply for Trade
Adjustment Assistance (TAA), the relevant period is the complete
twelve-month period prior to the petition date. Because the petition
date is June 10, 2003, the scope of the investigation is confined to
June 2002 through May 2003.
During the second remand investigation, the Department contacted
the company to request information about the subject facility and
affiliated domestic print facilities and requested information from the
plaintiffs. Further, the Department provided the Plaintiff an
opportunity to respond to the Department's preliminary findings. Supp.
AR at 59-63.
According to Merrill, the company derives revenue from document
management services and commercial and business forms printing. A
company official also stated that the financial documents are
customized and owned by the client, that composed documents are printed
pursuant to clients' requests, that the printing is done at an off-site
facility, and that print jobs are transmitted electronically from the
subject facility to the off-site printing facilities. Supp. AR at 10-
11, 36.
In a September 2, 2005 letter, the plaintiffs confirmed the unique
and customized nature of the documents but contradicted Merrill's
assertion that printing was not done at the subject facility. Supp. AR
at 15-17.
The Department sought clarification from the subject company and
was informed that the printing facility at Merrill, St. Paul, Minnesota
had closed by May 2001 and that Merrill had several domestic printing
facilities during the relevant period. Supp AR at 36, 50-51.
Since no production took place at the subject facility during the
relevant period, the Department investigated whether the subject
workers supported production at an affiliated, domestic production
facility during June 2002 through May 2003, whether sales and/or
production declined at that production facility, and whether increased
imports during the relevant period contributed importantly to those
declines.
As previously stated, composed documents were transmitted
electronically from the subject facility to off-site printing
facilities when customers requested physical copies of their financial
documents. Supp AR at 11, 17 The expanded investigation revealed that
production at all five printing facilities decreased during June 2002
through May 2003 from June 2001 through May 2002 levels. Supp. AR at
58.
After completing its investigation, the Department concludes that
the workers should not be certified for TAA benefits. The plaintiffs
claim they are eligible for benefits because Merrill shifted production
to India. The Department has determined that the workers created
electronic documents for printing and filing with the Securities and
Exchange Commission (SEC). It is undisputed that Merrill sent that
responsibility to India. The Department has consistently determined,
however, that electronic creations are not ``articles'' for the
purposes of the Trade Act unless they are embodied in a physical
medium. See, e.g., Former Employees of Dendrite International, 70 FR
212247-3 (April 25, 2005); Former Employees of Gale Group, Inc., 70 FR
6732-1 (February 8, 2005). Therefore, the workers do not produce an
article themselves.
In its letter of November 7, 2005, the plaintiffs argue that the
important issue is whether Merrill, not the workers themselves, creates
an article. Supp. AR at 61. In order for the Department to certify in a
case where the workers allege a shift of production, however, there
must be a shift of production of an article. In the present case, the
only job shifted was the creation of electronic files, which, as
discussed above, is not the production of an article.
Because the data entry function formerly done by the workers was
the only function transferred to India, and because the financial
reports were delivered to the United States via electronic transmission
only, then there was no shift of production of an article, as required
by the Trade Act. See Former Employees of Murray Engineering v. Chao,
358 F. Supp.2d 1269, 1272 n.7 (``the language of the Act clearly
indicates that the HTSUS governs the definition of articles, as it
repeatedly refers to ``articles'' as items subject to a duty''); HTS,
General Note 3(I) (exempting ``telecommunications transmissions'' from
``goods subject to the provisions of the [HTSUS]'').
Furthermore, under the Department's interpretation of ``like or
directly competitive,'' (29 CFR 90.2) ``like'' articles are those
articles which are substantially identical in inherent or intrinsic
characteristics and ``directly competitive'' articles are those
articles which are substantially equivalent for commercial purposes
(essentially interchangeable and adapted to the same uses), even though
the articles may not be substantially identical in their inherent or
intrinsic characteristics.
[[Page 72858]]
During the remand investigation, the Department confirmed that the
material created by the workers and produced at the Merrill printing
facilities is unique to each order. Supp. AR at 10-11, 36. No two
orders for one customer are alike because the material captures legal
and financial information which is unique unto itself. Similarly, one
customer's order cannot be intrinsically similar to another customer's.
Accordingly, there are no articles which are ``like'' or ``directly
competitive'' to any single ``article'' created by Merrill because each
electronic file is a unique document which is created for the sole
purpose of satisfying a specific customer's particular need at a
particular point in time. Thus, there are no articles which are
essentially interchangeable or can be adapted to the same use as a
Merrill document, and there are no articles ``like or directly
competitive'' with any Merrill ``article.'' See Former Employees of
Murray Engineering, Inc. v. Chao, 2005 WL 1527642 (CIT 2005) (articles
that are ``neither interchangeable with nor substitutable'' for the
petitioner's designs are not considered directly competitive.) (citing
Machine Printers & Engravers Ass'n v. Marshall, 595 F.2d 860, 862 (DC
Cir. 1979)). Since there are no articles which are like or directly
competitive with those produced by the subject company, there cannot be
any imports, much less increased imports. Therefore, neither section
222(a)(2)(A) nor section 222(a)(2)(B) of the Trade Act, as amended, has
been satisfied.
The plaintiffs argue that the Department's interpretation ignores
the fact that the workers' jobs were shifted to India. Supp. AR at 62.
In fact, the Department recognizes that the workers' jobs were shifted
overseas. The Trade Act, however, does not provide benefits to every
person whose job was shifted overseas. First, there must be the shift
of production of an ``article,'' which did not occur here. Supp. AR at
65 Second, the Trade Act requires, in a case such as this one, that
there be an increase of imports of articles ``like or directly
competitive'' to the articles whose production was shifted overseas.
The plaintiffs argue that the ``process'' shifted overseas was
identical to the ``process'' that had been done in the United States.
Supp. AR at 62. However, it is not enough for the process to be ``like
or directly competitive.'' As discussed above, each individual
electronic document transmitted to the United States is inherently
unlike and not competitive with any other electronic transmission.
The Department's investigation has demonstrated that some of
Merrill's customers ask that the SEC filings be placed on a physical
medium. For those customers, Merrill delivered the electronic creations
of the plaintiffs to an in-house printer who puts the SEC filing in
book form. Therefore, the plaintiffs could be viewed as supporting
production of an article. The Department has determined, however, that
no printing was transferred to another country. Supp. AR at 65.
Therefore, there was no shift of production of an article.
Conclusion
After reconsideration on remand, I affirm the original notice of
negative determination of eligibility to apply for adjustment
assistance for workers and former workers of Merrill Corporation, St.
Paul, Minnesota.
Signed at Washington, DC this 17th day of November 2005.
Elliott S. Kushner,
Certifying Officer, Division of Trade Adjustment Assistance.
[FR Doc. E5-6991 Filed 12-6-05; 8:45 am]
BILLING CODE 4510-30-P