[Federal Register Volume 75, Number 182 (Tuesday, September 21, 2010)]
[Notices]
[Pages 57517-57519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-23497]
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DEPARTMENT OF LABOR
Employment and Training Administration
[TA-W-70,344]
Atlantic Southeast Airlines, a Subsidiary of Skywest, Inc.,
Airport Customer Service Division, Including On-Site Leased Workers of
Delta Global Services, Inc., Fort Smith, AR; Notice of Negative
Determination on Remand
On July 6, 2010, the United States Court of International Trade
(USCIT) granted the Department of Labor's request for voluntary remand
to conduct further investigation in Former Employees of Atlantic
Southeast Airlines, a Subsidiary of Skywest, Inc., Airport Customer
Service Division v. United States Secretary of Labor (Court No. 09-
00522).
Background
On September 28, 2009, the Department of Labor (Department) issued
a Negative Determination regarding eligibility to apply for Trade
Adjustment Assistance (TAA) under the Trade Act of 1974, as amended
(hereafter referred to as the Act) applicable to workers and former
workers of Atlantic Southeast Airlines, a Subsidiary of Skywest, Inc.,
Airport Customer Division, Fort Smith, Arkansas (subject firm). AR 35.
Workers at the subject firm (subject worker group) provided airline
ground services, such as baggage handling, at the Forth Smith, Arkansas
airport. AR 8, 14, 17, 25-26, 34. The Department's Notice of negative
determination was published in the Federal Register on November 17,
2009 (74 FR 59251). AR 48.
The negative determination stated that the subject firm did not
import services like or directly competitive with the services supplied
by the subject workers in the period under investigation nor shift the
supply of these services to a foreign country during this period. A
customer survey was not conducted because the subject firm's customers
were private individuals who traveled through Fort Smith, Arkansas
airport. AR 35-38.
By application dated October 19, 2009, a petitioner requested
administrative reconsideration on the Department's negative
determination. In the request for reconsideration, the petitioner
alleged that workers at the subject firm provided services to
individuals employed at firms that employed workers eligible to apply
for TAA and that workers at the subject firm should also be eligible to
apply for TAA as ``downstream producers'' to these firms. AR 42-43.
Because the petitioner did not provide information that had not
been previously considered, the Department
[[Page 57518]]
issued a Notice of Negative Determination Regarding Application for
Reconsideration applicable to workers at the subject firm on November
5, 2009. AR 44. The Notice of determination was published in the
Federal Register on December 8, 2009 (74 FR 64736). AR 54.
In the complaint to the USCIT, dated December 2, 2009, the
Plaintiff reiterated the reconsideration application allegations,
claiming that workers at the subject firm are eligible to apply for TAA
as secondarily affected workers because they provided transportation
services to individuals employed at manufacturing firms in the Fort
Smith area that employed worker groups eligible to apply for TAA and
which used the airport at which the subject firm employed the worker
group. The complaint stated that ``our station was closed as a direct
result of down sizing and closing of major companies in our area; all
of which are receiving TAA benefits.'' The Plaintiff did not provide
additional information in support of the complaint, but attached a copy
of the request for reconsideration.
On June 30, 2010, the Department requested voluntary remand to
address the allegations made by the Plaintiff, to determine whether the
subject worker group is eligible to apply for TAA, and to issue an
appropriate determination. On July 6, 2010, the USCIT granted the
Department's Motion for voluntary remand.
Statutory Requirements
The Act authorizes the Department to certify worker groups as
eligible to apply for TAA generally when the increased imports or
shifts in production of articles or supply of services of the workers'
firm contributed importantly to a significant number or proportion of
worker separations or threats of separation and there have been
absolute decreases in the sales or production of the workers' firm.
In narrowly defined circumstances, Section 222(c) of the Act, 19
U.S.C. 2272(c), permits the certification of worker groups based on the
direct relationship between the workers' firm and another firm that
employed a worker group eligible to apply for TAA (a primary firm). For
the Department to issue such a ``secondary worker'' certification to
workers of a Supplier or a Downstream Producer, the following criteria
must be met:
(1) A significant number or proportion of the workers in the
workers' firm or an appropriate subdivision of the firm have become
totally or partially separated, or are threatened to become totally or
partially separated;
(2) The workers' firm is a Supplier or Downstream Producer to a
firm that employed a group of workers who received a certification of
eligibility under Section 222(a) of the Act, 19 U.S.C. 2272(a), and
such supply or production is related to the article or service that was
the basis for such certification; and
(3) Either
(A) the workers' firm is a supplier and the component parts it
supplied to the firm described in paragraph (2) accounted for at least
20 percent of the production or sales of the workers' firm; or
(B) a loss of business by the workers' firm with the firm described
in paragraph (2) contributed importantly to the workers' separation or
threat of separation.
Section 222(d)(3)(A) of the Act, 19 U.S.C. 2272(d)(3)(A), states
that a ``downstream producer means a firm that performs additional,
value-added production processes or services directly for another firm
for articles or services with respect to which a group of workers in
such other firm has been certified under subsection (a).''
Section 222(d)(3)(B) of the Act, 19 U.S.C. 2272(d)(3)(B), states
that ``value-added production processes or services include final
assembly, finishing, testing, packaging, or maintenance or
transportation services.''
Investigations of Petition, Application for Reconsideration, and USCIT
Complaint
The petitioners identified the subject worker group as twelve
``airline customer service and ramp agents'' in the employ of Atlantic
Southeast Airlines (ASA) working at Fort Smith, Arkansas. AR 4. The
petition states that ``ASA is closing stations @ Ft. Smith and all
surrounding airports.'' AR 5.
Information provided by the subject firm during the initial
investigation revealed that, at the Fort Smith, Arkansas location, the
subject worker group consisted of airport station manager(s), airport
station supervisor(s), and airport ramp/baggage agent(s). AR 25-26. The
initial investigation also revealed that the subject firm had a
contract with Delta Air Lines to supply airport ramp and baggage agents
and airport station supervisors and managers. AR 14, 17, 24-25, 27-28,
33-34. The subject firm also employed temporary workers supplied by
Delta Global Services, Inc. to perform security personnel and
administrative support personnel services at the Fort Smith, Arkansas
airport. AR 25, 33.
The initial investigation also revealed that the worker separations
were due to the subject firm's failure to win a bid to continue to
supply services at the Fort Smith, Arkansas airport. Specifically, when
Delta Air Lines and Northwest Air Lines merged, their operations were
consolidated and regional airlines with contracts to supply services at
airports where they operated were invited to submit new bids to
maintain operations at those airports. The subject firm did not win the
bid to supply services at the Fort Smith, Arkansas airport because the
merged entity decided to use the company that supplied the same
services to Northwest Air Line rather than complete the bidding
process. AR 17, 25, 33-34.
In the request for reconsideration, the petitioner alleged that
because the subject firm is ``completely reliant on the manufacturing
industry in our town'' and because the businesses ``discontinued their
flights with us due to their downsizing,'' the workers of the subject
firm should be eligible to apply for TAA as ``downstream producers'' to
those companies in the area who employed workers eligible to apply for
TAA because they used the Fort Smith, Arkansas airport. AR 42-43.
In the negative determination regarding the application for
reconsideration, the Department stated that because the subject firm
did not perform additional, value-added production processes or
services directly to these primary firms, the subject firm is not a
downstream producer. Therefore, the application for reconsideration was
denied. AR 44-47.
During the remand investigation, the Department carefully reviewed
previously-submitted information and obtained additional information
from the subject firm regarding its operations. The subsequent
investigation covered the reasons for the subject firm's closure of its
Fort Smith, Arkansas operations, the type of work engaged in by the
subject worker group and where the work that it performed is currently
taking place, the nature of the customer base at that location, and the
customer(s) of the subject firm.
The remand investigation confirmed that the subject firm did not
solicit business for Delta Air Lines, SAR 24, 27, or maintain or have
access to Delta Air Lines' customer list. SAR 3, 19, 27. The subject
firm provided ground handling and ticketing services to Delta Air Lines
customers, who included individual passengers, corporate accounts and
travel agencies. SAR 3, 19, 21, 27. Under contract to Delta Air Lines,
on some flights, the subject firm also provided aircraft and personnel.
SAR 19, 27. The
[[Page 57519]]
subject firm, and not Delta Air Lines, paid the subject worker group.
SAR 19, 27.
Issues on Remand
The Plaintiff alleged in the complaint to the USCIT that the
decline in travel in the Forth Smith, Arkansas area is attributable to
a reduction in the operations of local firms that employed workers
eligible to apply for TAA, and that this decline contributed to worker
separations at the subject firm.
Because there is no dispute that a significant proportion or number
of workers of the subject firm was separated, the only issues for the
Department to decide on remand are whether or not the remaining two
criteria of Section 222(c) of the Act have been met. Specifically, the
Department must determine whether or not the subject firm meets the
requirements of a ``downstream producer'' under Sections 222(c) and (d)
of the Act and, if so, whether or not the loss of business by the
subject firm with a primary firm contributed importantly to the subject
worker group separations or threat of separations.
The investigations revealed that the services supplied by the
subject firm were provided under contract exclusively for Delta Air
Lines, AR 14, 24-25, 27-28, 33-34, SAR 3, 19, 21, 27, but that the
subject worker group worked for the subject firm and not for Delta Air
Lines. SAR 19, 27. Delta Air Lines was the sole customer of the subject
firm. SAR 3, 21, 27. The Fort Smith, Arkansas airport users such as
leisure travelers, travel agencies, corporate accounts, and the
military may have benefited from the services supplied by the subject
firm, and one or more of these entities may have employed workers who
are eligible to apply for TAA. However, workers and former workers of
Delta Air Lines at Fort Smith, Arkansas airport are not eligible to
apply for TAA. SAR 32-33.
Section 222(d)(3)(A) of the Act requires that a ``downstream
producer'' perform ``additional, value-added production processes or
services directly for another firm for articles or services with
respect to which a group of workers in such other firm has been
certified under subsection (a) [of Section 222 of the Act].'' Section
222(d)(3)(B) includes ``transportation services'' among those services.
The subject firm cannot meet the statutory definition of a
``downstream producer'' because it only directly provided services to
Delta Air Lines (not for the customers of Delta Air Lines). SAR 3, 21,
27. The subject firm did not supply services directly related to the
production or supply of an article or service that was a basis for a
TAA certification. SAR 32-33.
Moreover, Section 222(c)(2) of the Act does not permit secondary
worker certification unless the service provided by the subject firm
``is related to the article or service that was the basis for such
certification [under Section 222(a) of the Act].'' Certification of a
worker group under Section 222(c) of the Act may not be based on a
secondary worker certification. Therefore, even if Delta Air Lines
workers could be certified eligible to apply for TAA on the basis that
Delta Air Lines provided transportation services related to the
production or supply of an article or service that was a basis for a
TAA certification of one or more of its customers, workers of the
subject firm may not be certified as adversely affected secondary
workers.
The Plaintiff also alleged that the domestic merger between Delta
Air Lines and Northwest Airlines shows trade impact that resulted in
the worker group layoffs.
The Department investigated this allegation during the remand
investigation, and confirmed that worker separations at the subject
firm are attributable to Delta Air Lines ceasing operations out of the
Fort Smith, Arkansas airport. SAR 3, 19, 21, 27. However, the newly-
merged airline maintained operations out of the Fort Smith, Arkansas
location using a different airline customer service provider. SAR 3,
19, 21, 27. Further, those services provided by the subject firm cannot
be imported or shifted abroad as they are used directly by domestic
passengers. As such, conducting a survey of Delta Air Lines to
determine whether it increased its imports of services like or directly
competitive with those supplied by the subject firm (as requested by
Plaintiff's counsel) is not necessary.
Based on a careful review of previously-submitted information and
new information obtained during the remand investigation, the
Department determines that the petitioning workers have not met the
eligibility criteria of Section 222(c) of the Trade Act of 1974, as
amended.
Conclusion
After careful reconsideration, I affirm the original negative
determination of eligibility to apply for worker adjustment assistance
for workers and former workers of Atlantic Southeast Airlines, a
Subsidiary of Skywest, Inc., Airport Customer Division, including on-
site leased workers of Delta Global Services, Inc., Fort Smith,
Arkansas.
Signed at Washington, DC this 3rd day of September, 2010.
Del Min Amy Chen,
Certifying Officer, Office of Trade Adjustment Assistance.
[FR Doc. 2010-23497 Filed 9-20-10; 8:45 am]
BILLING CODE 4510-FN-P