[Federal Register: September 5, 2006 (Volume 71, Number 171)]
[Notices]
[Page 52346-52347]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05se06-50]
[[Page 52346]]
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Employment and Training Administration
[TA-W-52,050]
Merrill Corporation, St. Paul, MN; Notice of Negative
Determination on Remand
On May 17, 2006, the United States Court of International Trade
(USCIT) remanded Former Employees of Merrill Corporation v. Elaine
Chao, U.S. Secretary of Labor, Court No. 03-00662, to the Department of
Labor (Department) for further investigation, in light of the
Department's Notice of Revised Determination on Remand for Lands' End,
A Subsidiary of Sears Roebuck and Company, Business Outfitters CAD
Operations, Dodgeville, Wisconsin (Lands' End), TA-W-56,688 (issued on
March 24, 2006).
Plaintiffs, workers of Merrill Corporation, St. Paul, Minnesota
(Merrill), created electronic documents for clients for filing with the
U.S. Securities and Exchange Commission (SEC). Plaintiffs lost their
jobs when Merrill shifted that work to India. The details of Merrill's
business activities and the Plainitffs' responsibilities can be found
in the Federal Register notices cited below.
The Department's Notice of Negative Determination Regarding
Eligibility to Apply for Worker Adjustment Assistance for the workers
of Merrill was issued on July 2, 2003 and published in the Federal
Register on July 22, 2003 (68 FR 43373). The Notice of Negative
Determination on Remand for workers of Merrill was issued on April 2,
2004 and published in the Federal Register on April 16, 2004 (69 FR
20645). In both determinations, the Department denied the workers
eligibility to apply for Trade Adjustment Assistance (TAA) because
Merrill does not produce an ``article'' within the meaning of the Trade
Act of 1974.
On November 17, 2005, the Department issued a Notice of Negative
Determination on Reconsideration on Remand for workers of Merrill. The
Notice was published in the Federal Register on December 7, 2005 (70 FR
72857). The Department determined that the workers are not eligible to
apply for TAA because Merrill does not produce an ``article'' since
electronic creations are not ``articles'' unless they are embodied in a
physical medium. The Department also determined that even if Merrill
produced an ``article,'' the uniqueness of each filing means that there
cannot be any articles which are like or directly competitive with the
``articles'' created by Merrill and, consequently, there cannot be any
increased imports of such articles.
In the Department's Lands' End determination, the Department stated
that ``the Department has revised its policy to acknowledge that there
are tangible and intangible articles and to clarify differences between
intangible articles and services * * * Products that would have been
considered an article if embodied in a physical medium will now be
considered an article * * * Workers providing services that may result
in the incidental production * * * however, are not engaged in the
production of an article for the purposes of the Act.'' (71 FR 18357)
Applying the revised policy to the immediate case, the Department
determines that Merrill provides a service, incidental to which
Plaintiffs produce an intangible article. Under the revised policy,
however, the incidental production of an article does not change the
Department's treatment of workers who work for a firm that produces an
article incidental to providing a service. Rather, the Lands' End
determination reinforces this policy (``Workers providing services that
may result in the incidental production * * * are not engaged in the
production of an article for the purposes of the Act'').
The Department has consistently held that workers who work for a
firm that provides a service, such as sales and repair, are not
eligible for TAA benefits. The Department's policy was recently upheld
by the USCIT in Former Employees of Gale Group, Inc., 403 F.Supp.2d
1299 (CIT 2005).\1\ In the Gale opinion, the USCIT established that
workers in a service firm are not eligible to apply for benefits under
the Trade Act. Id. at 1303.
---------------------------------------------------------------------------
\1\ The Plaintiffs in Gale appealed the decision to the United
States Court of Appeals for the Federal Circuit. Upon further
investigation, after the Lands End determination, the Department
concluded that Gale Group, Inc. produced an article, not incidental
to the provision of a service. The Department sought a remand and
certified the plaintiffs. See Notice of Revised Determination on
Remand for Gale Group, Inc., TA-W-54, 434 (July 19, 2006). The
Department's decision in Gale was not a repudiation of the USCIT's
decision in Gale.
---------------------------------------------------------------------------
During the third remand investigation, the Department confirmed
that the subject workers manipulate information into a format required
for filing with the SEC and that Merrill does not generate revenue by
the sale of the filings. The Department also confirmed that the filings
created by the subject workers adhere to the customer's specifications
and accommodate the special needs dictated by the SEC. SSAR 8, 18.
As stated in the USCIT's Gale opinion, TAA is only available to
workers in a firm engaged in production of an article. One significant
factor that distinguishes a production firm from a service firm is that
the former operates commercially as a manufacturing firm and generates
its revenue from the sale of the manufactured articles; the
manufacturer is in the business of making and selling an article. This
is in contrast to a service firm that operates commercially as a
service provider and generates its revenue from the provision of
services. That an article is created incidental to the provision of the
service does not make the service firm a production firm.
A commercial tax preparation firm that prepares and files tax forms
with the Internal Revenue Service is in the business of providing tax-
related services for a fee. The firm simply receives data from its
client and places it into a format acceptable to the government. That
the service may result in the creation of an article, a tax return,
does not make it a production firm. The tax preparation firm is not
selling its customers a tax return; rather, it is selling its expertise
in correctly manipulating the customer's tax data into the proper form.
Similarly, Merrill is in the business of providing financial document
related services for a fee. It receives data from its clients and
reformats it in a form acceptable to the government. The fact that its
services may result in the incidental production of an article, an SEC
filing, does not make Merrill a production firm.
Even if the Plaintiffs did produce an article for purposes of the
Trade Act, they would not be eligible to apply for TAA because there
was neither a shift of production to a qualified country nor increased
imports of articles like or directly competitive with those produced at
the subject facility.
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.
Given the nature of the SEC filings, 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.
Thus, there are no articles which are essentially interchangeable or
[[Page 52347]]
can be adapted to the same use as a Merrill document, and there are no
articles ``like or directly competitive'' with any Merrill ``article.''
Because 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 Department determines that the revised policy articulated in
Lands' End does not affect Plaintiffs' claim and determines that the
subject workers are not eligible to apply for TAA.
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 24th day of August 2006.
Elliott S. Kushner,
Certifying Officer, Division of Trade Adjustment Assistance.
[FR Doc. E6-14590 Filed 9-1-06; 8:45 am]
BILLING CODE 4510-30-P