Former Employees of Ameriphone v. U.S., SLIP OP. 03-138.

• Decision Date: 24 October 2003
• Docket Number: SLIP OP. 03-138.,Court No. 03-00243.
• Citation: 288 F.Supp.2d 1353
• Parties: FORMER EMPLOYEES OF AMERIPHONE, INC., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

288 F.Supp.2d 1353

FORMER EMPLOYEES OF AMERIPHONE, INC., Plaintiffs, v. UNITED STATES, Defendant.

SLIP OP. 03-138.

Court No. 03-00243.

United States Court of International Trade.

October 24, 2003.

Michael H. Greenberg, for Plaintiffs.

Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director, and Patricia McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Stefan Shaibani); Charles D. Raymond, Associate Solicitor for Employment and Training Legal Services, Office of the Solicitor, United States Department of Labor (Gary E. Bernstecker), for Defendant, of counsel.

OPINION

RIDGWAY, Judge.

Plaintiffs ("the Workers")—former employees of Ameriphone, Inc., a wholly owned subsidiary of Plantronics, Inc., Garden Grove, California ("Ameriphone")— brought this action to contest the determination of the U.S. Department of Labor ("Labor Department") denying their petition for certification of eligibility for transitional adjustment assistance benefits under the North American Free Trade Agreement ("NAFTA") Implementation Act ("NAFTA-TAA benefits"). See Letter to Court from D. Arnston, dated May 5, 2003 ("Complaint"); 67 Fed.Reg. 61,160, 61,162 (Sept. 27, 2002); 68 Fed.Reg. 12,938 (March 18, 2003); A.R. 22, 26; A.R. 37-38.¹ Jurisdiction lies under 28 U.S.C. § 1581(d)(1) (2000).

Pending before the Court is the Labor Department's Notice of Revised Determination on Remand (Corrected: October 1, 2003) ("Final Corrected Remand Determination"), which certifies that:

All workers of Ameriphone, Inc., ... who became totally or partially separated from employment on or after June 24, 2001 through two years of this certification [dated October 1, 2003], are eligible to apply for NAFTA-TAA [benefits] under Section 250 of the Trade Act of 1974.

68 Fed.Reg. 60,120 (Oct. 21, 2003). The Workers have advised that they are satisfied with that certification. Accordingly, with the observations and clarifications set forth below, the Labor Department's Final Corrected Remand Determination is sustained.

I. Background

A. The Trade Adjustment Assistance Laws

Modeled generally on the trade adjustment assistance program under the Trade Act of 1974, 19 U.S.C. § 2271 et seq. (2000), the NAFTA-TAA program entitles certain workers whose job losses are attributable to increased import competition from —or shifts in production to—Canada or Mexico to receive benefits including employment services, appropriate training, job search and relocation allowances, and income support payments.² 19 U.S.C. § 2331 (2000). See generally Former Employees of Chevron Prods. Co. v. U.S. Sec'y of Labor, 26 CIT ___, ___, 245 F.Supp.2d 1312, 1317-18 (2002) ("Chevron I").

The trade adjustment assistance laws are remedial legislation and, as such, are to be construed broadly to effectuate their intended purpose. See generally Woodrum v. Donovan, 5 CIT 191, 198, 564 F.Supp. 826, 832 (1983) (citing United Shoe Workers of Am. v. Bedell, 506 F.2d 174, 187 (D.C.Cir.1974)), aff'd, 737 F.2d 1575 (Fed.Cir.1984). See also Former Employees of Champion Aviation Prods. v. Herman, 23 CIT 349, 352, 1999 WL 397970 (1999) (citations omitted) (NAFTA-TAA statute is remedial legislation, to be construed broadly); Chevron I, 26 CIT at ___, 245 F.Supp.2d at 1318 (citations omitted) (same). Moreover, both "because of the ex parte nature of the certification process, and the remedial purpose of [the statutes], the [Labor Department] is obliged to conduct [its] investigation with the utmost regard for the interests of the petitioning workers." Stidham v. U.S. Dep't of Labor, 11 CIT 548, 551, 669 F.Supp. 432, 435 (citing Abbott v. Donovan, 7 CIT 323, 327-28, 588 F.Supp. 1438, 1442 (1984) (quotations omitted)).

Thus, while the Labor Department is vested with considerable discretion in the conduct of its investigation of trade adjustment assistance claims, "there exists a threshold requirement of reasonable inquiry." Former Employees of Hawkins Oil and Gas, Inc. v. U.S. Sec'y of Labor, 17 CIT 126, 130, 814 F.Supp. 1111, 1115 (1993). Courts have not hesitated to set aside agency determinations which are the product of perfunctory investigations.³

B. The Facts of This Case

The Workers' former employer, Ameriphone, specialized in communications and related technologies to meet the requirements of the hearing-impaired, deaf and other special needs communities. Product lines included telephones with specialized volume control, text (TTY) telephones for the deaf, bed-shaking alarm clocks for the deaf, and other similar specialized communication, notification and emergency response systems. A.R. 3, 20, 28-29. Although volume production of most items occurred in China (with initial assembly by a subcontractor there), merchandise was then shipped to Ameriphone (in California), where employees—inter alia—inspected and tested the products, performed necessary repairs and refurbishment, and completed upgrades and modifications as appropriate. Ameriphone employees also designed and built prototypes. A.R. 28-29; 68 Fed.Reg. 60,120.

After Plantronics acquired Ameriphone in January 2002, much of the work performed by Ameriphone employees was shifted to a Plantronics facility in Tijuana, Mexico. Complaint; A.R. 3, 28; 68 Fed. Reg. 60,120. Some 20-plus employees were laid off, effective June 30 and July 30, 2002. A.R. 3. In late June 2002, three of those employees filed a petition for NAFTA-TAA benefits. A.R. 3. However the Labor Department found that the Workers "provided administrative, technical, sales and distribution services" and thus did not produce an article as required for certification as "production workers" under the NAFTA-TAA statute. The agency further found that the Workers failed to satisfy the requirements for certification as service workers. The Labor Department therefore denied the Workers' petition. A.R. 19-21, 22-23; 67 Fed.Reg. 61,160, 61,162.

The Workers timely sought reconsideration of the denial, describing their duties in detail and explaining that those duties constituted "the final phase of production." A.R. 28-29. The Labor Department nevertheless denied reconsideration, concluding that—with few exceptions—the Workers' duties did not constitute "production" within the meaning of the statute, and that those exceptions—product modification, prototype production and product upgrades —accounted for only "a negligible portion" or "a negligible percentage" of the work performed at the plant. The agency further found that the Workers did not produce packaging or updated literature, and that the generation of "fault reports" did not constitute "production." In addition, the agency found that "components were added either as part of repair work, or were intermittent and not significant enough to qualify" as "production." Accordingly, the Labor Department again concluded that the Workers were in fact service workers. The agency reiterated its earlier conclusion that the Workers failed to satisfy the requirements for certification as service workers as well. A.R. 32-35, 37-38; 68 Fed.Reg. 12,938.

This appeal followed. In lieu of filing an Answer with the Court, the Government sought and was granted a voluntary remand "to conduct a further investigation and to make a redetermination" as to the Workers' eligibility for NAFTA-TAA benefits. Former Employees of Ameriphone, Inc. v. United States, Slip Op. 03-72, 2003 WL 21508227, *1 (CIT June 25, 2003).

On remand, the Labor Department "contacted [Plantronics] and requested detailed information regarding the workers' functions.... The newly obtained information revealed that [the] workers ... were engaged in production. The new information also revealed that a significant proportion of the production performed at the [Ameriphone] facility was shifted to Mexico." 68 Fed.Reg. 60,120. The Labor Department therefore concluded "that a shift of production to Mexico of products like or directly competitive with those produced at [Ameriphone] contributed importantly to the decline in sales or production and to the ... separation of [Ameriphone] workers," and certified as eligible to apply for benefits all Ameriphone workers "who became totally or partially separated from employment on or after June 24, 2001 through two years of [the] certification." Id.⁴

II. Analysis

The Labor Department's belated affirmative determination is relatively cold comfort to the Workers here, who lost their jobs more than a year ago and had to haul the agency into court to force the agency to take a hard look at their claim. On the one hand, the Government is to be commended for recognizing the need for a voluntary remand. On the other hand, the agency's about-face as a result of that remand simply highlights the fact that the agency should have certified these Workers in the first place, within 40 days of receipt of their petition.

Here, the entirety of the Labor Department's initial investigation consisted of forwarding the standard NAFTA Transitional Adjustment Assistance Confidential Data Request Form to Plantronic's Vice President for Human Resources. C.A.R. 10-13.⁵ The record reveals that the agency failed to follow up with company officials (via telephone or otherwise), even though the company's responses to the Labor Department questionnaire were, in a number of instances, ambiguous or inconsistent, and called for clarification.

For example, the company's questionnaire responses in one place flatly asserted that "[n]o products were produced" at Ameriphone's facility. C.A.R. 15. But that seemingly definitive statement was undercut by other, much more qualified responses given elsewhere in the same questionnaire, which hedged that the Ameriphone facility was not responsible for "volume production of standard products" and that "standard products ... [were] manufactured through a subcontractor arrangement in China." C.A.R. 14, 16 (emphasis added).⁶ And other responses acknowledged...