DEPARTMENT OF LABOR

Employment and Training Administration

TA-W-51,750

FEDERATED MERCHANDISING GROUP
A PART OF FEDERATED DEPARTMENT STORES
NEW YORK, NEW YORK

Notice of Negative Determination
On Remand

On May 3, 2006, the United States Court of International
Trade (USCIT) granted the U.S. Department of Labor’s motion for
voluntary remand for further investigation in Former Employees of
Federated Merchandising Group, A Part of Federated Department
Stores v. United States Secretary of Labor, Court No. 03-00689.
On June 10, 2003, the Department of Labor (Department)
issued a negative determination regarding eligibility to apply
for Trade Adjustment Assistance (TAA) for the subject workers.
The workers produced paper patterns and sample garments at the
subject facility and are not separately identifiable by product
line. The investigation revealed that worker separations at the
subject facility were attributable to neither increased in
imports of paper patterns and sample garments nor a shift of
production abroad of paper patterns and sample garments, but to
improved pattern production technology (use of computer design
programs has reduced the need for manual pattern making and
subsequent sample making). AR 16. The Notice of determination
was published in the Federal Register on June 19, 2003 (68 FR
36846). AR 22
On August 19, 2003, a Notice of Negative Determination
Regarding Application for Reconsideration was issued in response
to the July 2, 2003 request for reconsideration on the findings
of neither error nor misunderstanding of the law or facts in the
investigation. AR 31. The Notice was published in the Federal
Register on September 30, 2003 (68 FR 56327). AR 32
On July 6, 2005, the Department issued a Notice of Negative
Determination on Remand. The determination stated that the
workers’ separations were due to the subject firm’s institution
of production improvement measures which resulted in the reduced
need for manual labor in general. SAR 15. The Notice was
published in the Federal Register on July 14, 2005 (70 FR 40737).
SSAR 1
The purpose of the second remand is to address causation,
whether the subject workers could be divided into distinct
subgroups, and whether the subject workers are eligible to apply
for TAA.
Because 29 CFR §90.2 defines a “group” as three or more
workers in a firm or an appropriate subdivision and “appropriate
subdivision” as an establishment in a multi-establishment firm or
a distinct section of an establishment, which produces the
domestic article(s) in question, the Department determines that
workers could be divided into distinct subgroups if multiple
articles are produced by the subject firm or an appropriate
subdivision and the workers are separately identifiable by the
article produced. The regulations explicitly allow the
Department to examine different segments of workers when deciding
whether an application should be certified. 29 C.F.R. §
90.16(g). The Department is not limited to the unit described in
the application. 29 C.F.R. § 90.16(d) (1).
In the case hand, the subject workers produce two distinct
articles, handmade patterns and hand-sewn samples, AR 2, 14, 26,
29 and SAR 10, 14-15, and the workers producing handmade patterns
have skills which are distinguishable from those producing hand-
sewn samples. AR 26, SAR 10, SSAR 17, 25-31, 33-34. Further, the
subject firm identifies the Plaintiff as the Director of Pattern
Services, SSAR 17, and the Plaintiff identifies himself as a
patternmaker. AR 26, SSAR 13, 25-31. As such, the Department
determines that the subject workers are, in fact, two distinct
subgroups: pattern makers and sample makers.
To determine whether a worker group is eligible to apply for
TAA, the Department must ascertain whether the criteria set forth
in 29 CFR 90.16(b) was met:
1) A significant number or proportion of the workers in such
workers’ firm (or appropriate subdivision of the firm) have
become, or are threatened to become, totally or partially
separated;

2) Sales or production, or both, of such firm or subdivision
have decreased absolutely; and

3) Increases (absolute or relative) of imports of 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.

29 CFR §90.2 states that “significant number or proportion
of the workers” means at least three workers in a firm (or
appropriate subdivision) with a work force of fewer than 50
workers.
Should the USCIT accept the Department’s determination that
there are two distinct worker groups in the case at hand, the
Department presents its analysis regarding the pattern makers’
and sample makers’ applications for TAA certification.
Although the respective workers groups of pattern makers and
sample makers each qualify as a “group” (three or more workers
producing an article) independently, each worker group fails to
satisfy 29 CFR §90.16(b)(1) because only two of each group were
separated. AR 26 and SSAR 16-17
Should the USCIT reject the Department’s determination that
there are two distinct worker groups, the Department presents its
analysis regarding the TAA petition filed on behalf of the worker
group consisting of pattern makers and sample makers.
While this larger group consisting of pattern makers and
sample makers meets 29 CFR §90.16(b) (1) and (2), SSAR 4, 8, 13,
criterion three has not been met.
29 CFR §90.2 states that "increased imports" means imports
have increased, absolutely or relative to domestic production,
compared to a representative base period. The regulation also
establishes the representative base period as the one-year period
preceding the date twelve months prior to the petition date.
Because the petition date of TA-W-51,750 is May 5, 2003, the
relevant period is May 5, 2002 through May 5, 2003 and the
representative base period is May 5, 2001 through May 5, 2002.
Therefore, increased imports is established if import levels
during May 5, 2002 through May 5, 2003 are greater than import
levels during May 5, 2001 through May 5, 2002.
While the Plaintiff has provided evidence of increased
competition from China, SSAR 25-28, and the declining role of
manual pattern makers in America, SSAR 29-31, the material falls
outside the relevant period (2005 and 2004, respectively) and,
therefore, do not bear on the case at hand. What is relevant,
however, is previously-submitted material that shows that there
were no increased imports of either patterns or samples during
the relevant period as compared to the representative base
period. SAR 10-11, 14.
On voluntary remand, the USCIT ordered the Department to
determine whether the TAA required that plaintiffs lost their
jobs on account of a shift in production. In Former Employees of
Barry Callebaut v. Herman, 177 F. Supp.2d 1304 (CIT 2001), the
USCIT addressed that very issue with regard to NAFTA TAA. There,
the USCIT concluded that “[t]he legislative history behind NAFTA
TAA shows that the program is intended to benefit displaced
workers whose separations were caused by shifts in production.”
Id. at 1312. The USCIT added that NAFTA TAA “is not intended to
benefit workers whose separations were not caused by shifts in
production.” Id. The language in the TAA regarding shifts in
production is almost identical to that in the NAFTA TAA, and the
purpose of the statute is the same. Therefore, causation is a
requirement for a shift in production case.
Therefore, the Department determines that the subject
workers have not met the criteria set forth in Section 222 of the
Trade Act of 1974, as amended, and are not eligible to apply for
worker adjustment assistance.
Conclusion
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 Federated Merchandising Group, A Part of
Federated Department Stores, New York, New York.
Signed at Washington, D.C., this 3rd day of July 2006.
/s/ Linda G. Poole
_______________________________
LINDA G. POOLE
Certifying Officer, Division of
Trade Adjustment Assistance