[Federal Register Volume 71, Number 171 (Tuesday, September 5, 2006)]
[Notices]
[Pages 52346-52347]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-14590]



[[Page 52346]]

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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 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.
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    \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.
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    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