[Federal Register Volume 70, Number 25 (Tuesday, February 8, 2005)]
[Notices]
[Pages 6732-6733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-486]


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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