[Federal Register Volume 68, Number 152 (Thursday, August 7, 2003)]
[Notices]
[Pages 47097-47099]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-20116]


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DEPARTMENT OF LABOR

Employment and Training Administration

[TA-W-42,113]


The Wackenhut Corporation, San Manuel, AZ; Notice of Negative 
Determination on Reconsideration on Remand

    The United States Court of International Trade (USCIT) granted the 
Secretary of Labor's motion for a voluntary remand for further 
investigation in Former Employees of Wackenhut Corporation v. U.S. 
Secretary of Labor, No. 02-00758.
    October 15, 2002, the Department of Labor (Department) issued a 
denial of Trade Adjustment Assistance (TAA) certification for the 
workers of The Wackenhut Corporation, San Manuel, Arizona. The decision 
was based on the investigation finding that the workers firm provided 
security services and did not produce an article in accordance with 
section 222(3) of the Trade Act of 1974. The notice of negative 
determination regarding eligibility for workers of The Wackenhut 
Corporation, San Manuel, Arizona (hereafter referred to as Wackenhut), 
was published in the Federal Register on November 5, 2002 (67 FR 67421-
67423).
    The initial TAA investigation showed that Wackenhut in Phoenix, 
Arizona, supplied workers to perform security services at BHP Copper, 
Inc. in San Manuel, Arizona. Workers of BHP Copper, Inc., in San 
Manuel, Arizona produced copper cathodes. On March 25, 2002, the 
Department issued a certification of eligibility for workers of BHP 
Copper, Inc., Pinto Valley, Miami, Arizona, to apply for TAA (TA-W-
39,949). On August 8, 2002, the Department amended that certification 
to include workers of BHP Copper, Inc. (hereafter referred to as BHP), 
Tucson/San Manuel Operations, Tucson/San Manuel, Arizona (TA-W-
39,949A). The workers of BHP in Tucson/San Manuel, Arizona produced 
copper cathodes.
    The Wackenhut petitioners did not file a request with the 
Department for administrative reconsideration, but chose instead to 
seek judicial review with the U.S. Court of International Trade. The 
U.S. Department of Labor submitted to the Court the administrative 
record for the Wackenhut petition investigation (TA-W-42,113).
    The plaintiffs' counsel subsequently submitted declarations about 
the work performed at the BHP site by the Wackenhut employees. The 
declarations alleged that the worker group performed work involving 
copper production.
    A former Wackenhut employee, the Captain, also known as Officer in 
Charge (OIC) of Wackenhut operations at BHP in San Manuel, Arizona, 
declared that by 2002, Wackenhut employees' responsibility for copper 
production-related work at BHP included, but was not limited to: (1) 
Preparation of finished copper cathodes for shipment, including 
completion of paperwork relating to the shipping and inspecting; (2) 
receipt of shipments of sulfuric acid necessary for the production 
processes of copper cathodes, and (3) the disposal operations for 
byproducts.
    A former BHP official, the Corporate Manager for Safety, Health and 
Security, who spent about 60 percent of his time at the Tuscon/San 
Manuel facility, made similar statements and declared that Wackenhut 
employees at BHP in San Manuel, Arizona were an integral part of 
production and shipping operations, in addition to their security 
functions. He declared that as layoffs of BHP employees occurred, the 
responsibilities of Wackenhut employees increased; they were asked to 
assume increasing responsibilities relating to the production of copper 
at the facility.
    On remand, the Department contacted the BHP Vice President, 
Administration, to obtain information about the work performed by 
Wackenhut at the BHP San Manuel, Arizona facility. He provided a copy 
of the contract between BHP and Wackenhut. It is noted that the 
contract includes BHP facilities other than the San Manual, Arizona 
location. The contract was for a 3-year period, between January 1998 
and January 2001 and was informally extended on a month-to-month basis 
until terminated in August of 2002. The BHP Vice President, 
Administration, consulted with BHP officials that were responsible for 
operations and production of copper cathodes at San Manuel. The primary 
duties of Wackenhut, as described in the contract between Wackenhut and 
BHP, were to control ingress and egress of all employees, visitors, 
deliveries and service providers, and to escort material deliveries to 
appropriate unloading areas and assure correct paperwork is completed.
    Under the contract, Wackenhut provided security services. The 
Department determined that such

[[Page 47098]]

services are not related to the production of copper cathodes.
    The Department contacted the Wackenhut official at the Phoenix, 
Arizona, office about who would be the Wackenhut person most 
knowledgeable about the day-to-day activities for the Wackenhut 
employees at BHP in San Manuel. Although the TAA petition for workers 
of Wackenhut identified the Area Manager as the contact person, the 
plaintiffs cited that this individual would not have the day-to-day 
knowledge of the work performed by Wackenhut employees at the BHP 
operations. The Area Manager, however, identified himself and the 
Captain/OIC at BHP in San Manuel, Arizona.
    The Department asked the Area Manager for Wackenhut how the workers 
were involved in production and shipping of copper cathodes at BHP in 
San Manuel, Arizona. He responded that the workers of Wackenhut did not 
produce any sort of tangible product for BHP; involvement of copper 
cathode production was limited to access/egress control and building/
perimeter patrol at the mine site. He added that Wackenhut did perform 
some OSHA/MSHA and First Responder training to BHP mine personnel in 
support of mine operations. The Area Manager was also asked if the 
Wackenhut employees at BHP in San Manuel did work other than that 
specified in the contract. He responded that all duties would be 
detailed in the site's security Post Orders and any amendment to those 
Orders. Furthermore, Wackenhut employees were not authorized to perform 
any duties other than those in the Post Orders.
    Under the Post Orders, Wackenhut provided security services. The 
Department determined that such services are not related to the 
production of copper cathodes.
    Since the services described by the OIC cannot be considered 
producing the article, on remand the Department asked the Wackenhut OIC 
to explain how they prepared the finished copper cathodes for shipment. 
She responded that after the BHP Shipping Clerks were laid off, 
Wackenhut was left with the responsibility to inspect the load and 
complete the paperwork. Without the proper paperwork completed and 
signed by security, the load was not allowed to leave BHP San Manuel. 
She made similar statements with respect to the receipt and delivery of 
a wide variety of products and by-products essential to BHP 
manufacturing.
    The former Corporate Manager for Safety, Health and Security for 
BHP was asked how Wackenhut workers were engaged in the production of 
copper cathodes. He responded that they would weigh out and count the 
number of copper cathodes leaving the BHP premises. Furthermore, they 
would weigh in copper anodes that were entering the BHP premises for 
further processing.
    When a worker group applies for Trade Adjustment Assistance TAA, 
the fundamental test the Department of Labor applies is whether the 
workers' firm or appropriate subdivision is producing an import-
impacted article during the relevant time period. If the worker group 
produces an article they are considered production workers.
    Section 222 of the Trade Act establishes that the Department must 
not certify a group unless increases of imports of articles like or 
directly competitive with articles produced by such workers' firm or an 
appropriate subdivision thereof contributed importantly to such total 
or partial separation, or threat thereof, and to such decline in sales 
or production. The phrase of particular importance in this case is 
``articles produced by such workers' firm or an appropriate subdivision 
thereof.'' Under this requirement, the Department cannot issue a 
certification of eligibility to a worker group unless the workers' firm 
or an appropriate subdivision of the workers' firm produces an import-
impacted article.
    An appropriate subdivision is limited to the workers' firm and 
section 90.2 of the Trade Adjustment Assistance program regulations 
permits the inclusion of multiple entities within the firm only if they 
are affiliated entities. The Department's investigation indicates that 
substantially the same persons do not control Wackenhut or BHP. The 
contract between Wackenhut and BHP indicate that they are separate 
corporations. Therefore, the Department finds that Wackenhut and BHP 
are not controlled or substantially beneficially owned by the same 
persons. They are independent business entities and as such the word 
firm as defined in section 90.2, workers' firm cannot mean both 
Wackenhut and BHP.
    The Department's interpretation of ``appropriate subdivision 
hereof'' is limited to related or affiliated firms and cannot be 
expanded to encompass an unaffiliated firm. This interpretation is 
consistent with section 222 of the Trade Act of 1974 which requires the 
Department to consider whether a significant number of workers have 
been separated from the workers' firm or appropriate subdivision of the 
firm.
    The contract between BHP and Wackenhut (the independent contractor) 
establishes that all persons employed by the contractor shall be deemed 
to be employees of the contractor; in this case Wackenhut. The 
Department has consistently determined that the critical employment 
factor is which firm was obligated to pay the employee during the 
relevant period. Because Wackenhut was so obligated, the Department has 
determined that Wackenhut is the workers' firm.
    Therefore, the Department finds that the petitioners are employees 
of Wackenhut and cannot be certified as an appropriate subdivision (or 
as part of an appropriate subdivision) of BHP.
    In order to consider the petitioners producing articles, the 
Wackenhut workers would have to transform a thing into something new 
and different. Security services, weighing incoming and outgoing 
shipments, completing paperwork for incoming and outgoing shipments, 
escorting trucks to the proper location, and providing safety training 
for both BHP and Wackenhut employees could be considered ``services'' 
related to the production of the articles produced at BHP. The 
Department thoroughly investigated and could not find any evidence that 
any employees of Wackenhut actually produced any articles or that the 
petitioners transformed anything into something new and different. 
Consequently, they are not eligible for certification as production 
workers.

Conclusion

    Whether the performance of services by the petitioners is related 
or unrelated to production is not relevant to determining their 
eligibility for certification. Under section 222 of the Act, what is 
relevant is whether the workers' firm or an appropriate subdivision of 
the workers' firm produces an article. The workers' firm in this case 
is Wackenhut. Wackenhut is not affiliated with BHP. The evidence 
clearly establishes that Wackenhut does not produce, directly or 
through an appropriate subdivision, an import-impacted article. Once 
the Department concludes that the workers' employer was not a firm that 
produced an import-impacted article, it may conclude that the workers 
are not eligible for assistance without further analysis. Because the 
petitioners are employees of a firm or subdivision that does not 
produce a trade-impacted article, they are not eligible for 
certification.
    After reconsideration on voluntary remand, I affirm the original 
notice of negative determination of eligibility to apply for adjustment 
assistance for workers and former workers of The Wackenhut Corporation, 
San Manuel, Arizona.


[[Page 47099]]


    Signed at Washington, DC, this 29th day of July, 2003.
Linda G. Poole,
Certifying Officer, Division of Trade Adjustment Assistance.
[FR Doc. 03-20116 Filed 8-6-03; 8:45 am]
BILLING CODE 4510-30-P