DEPARTMENT OF LABOR

Employment and Training Administration

TA-W-55,333

GATEWAY COUNTRY STORE
WHITEHALL MALL
WHITEHALL, PENNSYLVANIA

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 Gateway Country
Stores, LLC. v. Elaine L. Chao, United States Secretary of Labor
(Court No. 04-00588) on January 3, 2005.
On August 5, 2004, the Department of Labor (Department)
issued a negative determination regarding eligibility to apply
for Trade Adjustment Assistance (TAA) for the workers of Gateway
Country Stores, LLC, Whitehall Mall, Whitehall, Pennsylvania
(hereafter “the subject facility”). The negative determination
was based on the investigation’s finding that the workers at the
subject facility were engaged in retail sales of computers and
providing technical support to buyers, and thus, did not produce
an article in accordance with Section 222 of the Trade Act of
1974. On August 20, 2004, the Notice of Negative Determination
Regarding Eligibility to Apply for Worker Adjustment Assistance
for the subject facility was published in the Federal Register
(69 FR 51715).
In a letter dated September 9, 2004, the petitioner
requested administrative reconsideration of the Department’s
negative determination. The Department affirmed its finding that
the workers of the subject firm were not eligible to apply for
TAA on the basis that they did not produce an article within the
meaning of Section 222 of the Trade Act. In a letter dated
September 16, 2004, the Department dismissed the petitioner’s
request for reconsideration. A Dismissal of Application for
Reconsideration was issued on September 17, 2004. The Notice of
Dismissal of Application for Reconsideration was published in the
Federal Register on September 23, 2004, (69 FR 57091).
By letter dated November 18, 2004, the petitioner requested
judicial review by the USCIT. In that letter, the petitioner
asserts that the workers produce an article since retail sales
should be “recognized as an intrinsic service, bundled and
inseparable from the Gateway computer” and alleges that the
workers’ separations are due to a shift of production abroad.
On January 3, 2005, the USCIT remanded the matter to the
Department for further investigation of the subject workers’
eligibility to apply for worker adjustment assistance benefits.
During the remand investigation, the Department carefully
reviewed previously submitted information, contacted Gateway
officials to obtain new and additional information regarding the
work done by the subject worker group and solicited information
from the petitioners.
The remand investigation revealed that the Gateway Country
Stores (“Stores”) operated as a showroom and retail outlet for
Gateway computers and related products, such as monitors, and as
a service shop. (Supp. AR 93, 105) The Stores, which opened in
the United States during the late 1990s, operated on the basis of
a European marketing strategy. (Supp. AR 105) By April 9, 2004,
Gateway had closed all the Stores. (Supp. AR 1, 100, 105)
Customers would enter the Store and view/test-try the floor
models. (Supp. AR 105) Customers could purchase prepackaged
computers (”cash and carry”) or place an order with the Store’s
personnel. (Supp. AR 2, 93) Prepackaged computers were shipped
from an off-site manufacturing plant to a Store’s inventory room,
then sold “as is” to the customer. (Supp. AR 91, 93) Aside from
display models, the prepackaged computers were not removed from
their boxes by Store personnel. Orders placed by the customer
are assembled and packaged by off-site Gateway manufacturing
plants, then shipped directly from the plant to the customer’s
mailing address. (Supp. AR 8, 93) Customers who sought service or
repair for their units brought them to the Stores after receiving
it at the pre-selected mailing addresses. (Supp. AR 91, 93, 96)
In the January 31, 2005 submission, the petitioner asserts
that workers at the subject facility “were involved in the
rework, upgrade, and final assembly of the pc solution . . . Most
sales were customized orders with some piece of extra software,
hardware, peripherals, or additional component as part of the
solution” and infers that the extra components transform the
computer into something different and improved and, therefore,
the workers are producing an article – the pc solution.
In the February 22, 2005 submission, the petitioner asserts
that the pc solution included “continued customer service, and
manufacture/rework/upgrade tasks that are bundled with the sale.”
The petitioner also asserts that in many occasions, “the service
and sale then concluded with assembly of hardware and external
components to construct the system desired, and the installation
of a customer selected software systems . . . performed by store
personnel.”
According to Gateway company officials, workers at the
subject facility did not install programs or devices unless it
was post-sale and the customer brought the unit into a Store for
service. (Supp. AR 91) Further, a careful review of the position
descriptions of the workers at the subject facility show that the
workers were not engaged in production work but performed sales
and marketing, sales/product training, store opening/closing,
human resources, budgeting, customer service, inventory control,
and management functions. (Supp. AR 8-41)
The Department has consistently held that the performance of
installation, repair and customer service is not production for
the purposes of the Trade Act. Thus, the Department determines
that petitioners do not produce an article within the meaning of
the Trade Act of 1974.
The petitioner also asserts that Gateway used the Stores to
distinguish itself from its competitors in the personal computer
market and that the Stores’ closures were caused by the shift of
computer production abroad.
Contrary to the petitioner’s allegations, Gateway’s creation
of the Stores was not to distinguish itself from its competitors
as an effort to secure and/or maintain its market. Rather, the
Stores were based on a revenue channel that Gateway was already
using in Europe and Gateway had hopes that its domestic Stores
would also be profitable. (Supp. AR 105)
Like other companies facing strained economic conditions,
Gateway undertook a large-scale business plan to change its
direction. Information obtained from Gateway show that the
business plan started several years before the investigatory
period (July 2003 through July 2004), that the change of revenue
sources was part of its dynamic business revolution, and that the
Store closures were but one form of corporate cost-reduction, as
was the independent decision to shift some manufacturing to
foreign countries. The Stores were closed because they were
unprofitable. (Supp. AR 3, 100, 101, 105, 106) Further, those
functions which took place in the Stores were revised over
several years and shifted to other domestic venues. For example,
sales and customer service are handled via telephone (Supp. AR 1)
and the Internet (Supp. AR 3); Gateway products are sold and
serviced in national retail outlets. (Supp. AR 3, 101)
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 Gateway Country Stores, LLC, Whitehall Mall,
Whitehall, Pennsylvania.
Signed at Washington, D.C. this 17th day of June 2005.
/s/ Elliott S. Kushner
_______________________________
ELLIOTT S. KUSHNER
Certifying Officer, Division of
Trade Adjustment Assistance


DEPARTMENT OF LABOR
Employment and Training Administration
TA-W-55,333

GATEWAY COUNTRY STORE
WHITEHALL MALL
WHITEHALL, PENNSYLVANIA

Negative Determination Regarding Eligibility
To Apply For Worker Adjustment Assistance

In accordance with Section 223 of the Trade Act of 1974, as amended (19 USC 2273), the
Department of Labor herein presents the results of an investigation regarding certification of
eligibility to apply for worker adjustment assistance.
The investigation was initiated on July 30, 2004 in response to a petition filed on behalf of
workers of Gateway Country Store, Whitehall Mall, Whitehall, Pennsylvania. The workers are
engaged in retail sales of computers and providing technical support to buyers.
In order to be considered eligible to apply for adjustment assistance under Section 223 of the
Trade Act of 1974, the worker group seeking certification (or on whose behalf certification is being
sought) must work for a "firm" or appropriate subdivision that produces an article domestically and
there must be a relationship between the workers' work and the article produced by the workers' firm
or appropriate subdivision. The investigation revealed that although production of an article(s)
occurred within the parent firm or appropriate subdivision, the retail sales and technical support
workers described above do not support production. Thus, the worker group cannot be considered
import impacted or affected by a shift in production of an article.
Conclusion
After careful review, I determine that all workers of Gateway Country Store, Whitehall Mall,
Whitehall, Pennsylvania are denied eligibility to apply for adjustment assistance under Section 223
of the Trade Act of 1974.
Signed in Washington, D.C., this 5th day of August 2004.

/s/ Linda G. Poole
______________________________
LINDA G. POOLE
Certifying Officer, Division of
Trade Adjustment Assistance