Petitioner Type: Workers
Impact Date:
Filed Date: 11/25/2009
Most Recent Update: 08/05/2010
Determination Date: 08/05/2010
Expiration Date:
DEPARTMENT OF LABOR
Employment and Training Administration
TA-W-72,949
WESTERN DIGITAL TECHNOLOGIES, INC.
HARD DRIVE DEVELOPMENT ENGINEERING GROUP
IRVINE (FORMERLY AT LAKE FOREST), CALIFORNIA
Notice of Negative Determination
On Remand
On November 22, 2011, the U. S. Court of International Trade
(USCIT) granted the Department of Labor’s second request for
voluntary remand to conduct further investigation in Former
Employees of Western Digital Technologies, Inc. v. United States
Secretary of Labor (Court No. 11-00085).
On November 25, 2009, former workers of Western Digital
Technologies, Inc., Hard Drive Development Engineering Group,
Lake Forest, California (subject firm) filed a petition for Trade
Adjustment Assistance (TAA) on behalf of workers at the subject
firm. AR 1. The worker group covered under this petition
(subject worker group) consists of workers engaged in the supply
of engineering functions for the development of hard disk drives.
The initial investigation revealed that the subject firm had
not shifted abroad the supply of services like or directly
competitive with those provided by the subject worker group, that
the subject firm had not acquired such services from abroad, and
there had not been an increase in imports of articles or services
like or directly competitive with those produced or supplied by
the subject firm. AR 72-77. Further, the initial investigation
revealed that the subject firm could not be considered a Supplier
or Downstream Producer to a firm that employed a worker group
eligible to apply for TAA. AR 72-77. On August 5, 2010, the
Department of Labor (Department) issued a Negative Determination
regarding eligibility to apply for TAA applicable to workers and
former workers of the subject firm. The Department’s Notice of
Negative Determination was published in the Federal Register on
August 23, 2010 (75 FR 51849). AR 82.
The group eligibility requirements for workers of a Firm under
Section 222(a) of the Act, 19 U.S.C. § 2272(a), can be satisfied if
the following criteria are met:
(1) a significant number or proportion of the workers in such
workers’ firm have become totally or partially separated, or
are threatened to become totally or partially separated; and
(2)(A)(i) the sales or production, or both, of such firm have
decreased absolutely;
(ii)(I) imports of articles or services like or directly
competitive with articles produced or services supplied by
such firm have increased;
(II) imports of articles like or directly competitive with
articles—
(aa) into which one or more component parts produced by
such firm are directly incorporated, or
(bb) which are produced directly using services supplied
by such firm,
have increased; or
(III) imports of articles directly incorporating one or
more component parts produced outside the United States that
are like or directly competitive with imports of articles
incorporating one or more component parts produced by such
firm have increased; and
(iii) the increase in imports described in clause (ii)
contributed importantly to such workers’ separation or threat
of separation and to the decline in the sales or production
of such firm; or
(B)(i)(I) there has been a shift by such workers’ firm to a
foreign country in the production of articles or the supply of
services like or directly competitive with articles which are
produced or services which are supplied by such firm; or
(II) such workers’ firm has acquired from a foreign
country articles or services that are like or directly
competitive with articles which are produced or services
which are supplied by such firm; and
(ii) the shift described in clause (i)(I) or the acquisition
of articles or services described in clause (i)(II)
contributed importantly to such workers’ separation or threat
of separation.
By application dated September 14, 2010, the petitioning
workers requested administrative reconsideration of the
Department’s negative determination. AR 83. In the request, the
petitioners alleged that increased imports of articles that were
produced using the services supplied by the subject worker group
contributed importantly to worker separations at the subject
firm. AR 83.
To investigate the petitioners’ claim, the Department issued
a Notice of Affirmative Determination Regarding Application for
Reconsideration on October 7, 2010. AR 84. The Department’s
Notice of Affirmative Determination was published in the Federal
Register on October 25, 2010 (75 FR 65517). AR 286.
During the reconsideration investigation, the Department
obtained information from the subject firm regarding the
petitioners’ claims and collected data from the U.S.
International Trade Commission regarding imports of articles like
or directly competitive with those produced using the services
supplied by the subject worker group. AR 89-125, 126, 127.
Based on the findings of the reconsideration investigation,
the Department concluded that worker separations at the subject
firm were not caused by a shift in services abroad or increased
imports of services like or directly competitive with those
provided by the subject worker group. AR 89-125. Further, the
reconsideration investigation revealed that the subject firm did
not import articles like or directly competitive with those
produced directly using services supplied by the subject worker
group, AR 89-125, and U.S. aggregate imports of articles like or
directly competitive with hard disk drives declined in the
relevant time period. AR 126, 134-136, 137, 141-142, 143-145.
Consequently, the Department issued a Notice of Negative
Determination on Reconsideration on February 4, 2011. AR 129-130.
The Department’s Notice of determination was published in the
Federal Register, on February 24, 2011 (75 FR 10403). AR 287.
FIRST REMAND INVESTIGATION
On April 11, 2011, Plaintiffs filed a complaint with the
USCIT in which they claimed that their separations were directly
caused by the subject firm’s foreign operations and increased
imports of hard disk drives, and provided information in support
of these claims. The Plaintiffs stated that the subject firm
trained foreign engineers at the Lake Forest, California
facility, who then returned to their respective countries to
perform the same services as the Plaintiffs, and provided a list
of job announcements for engineers posted by the subject firm in
Malaysia at the same time as the domestic layoffs. Further, the
Plaintiffs provided import statistics pertaining to hard disk
drives, specifically pointing to increased imports of these
articles from Malaysia.
In a letter submitted to the Department on June 13, 2011,
Plaintiffs provided additional information surrounding the
layoffs of the workers, including supporting information relating
to the allegations made in the complaint to the USCIT. AR 154-
182. Plaintiffs provided a list of several engineering positions
and functions that allegedly shifted to Asia from the Lake
Forest, California facility and included statements on how
engineering functions were transferred abroad, presenting details
regarding the training of foreign workers who returned overseas
to perform the same functions as Plaintiffs. AR 154-182.
The Department requested voluntary remand to address the
allegations made by the Plaintiffs, to determine whether the
subject worker group is eligible to apply for TAA under the Trade
Act of 1974, as amended (hereafter referred to as the Act), and
to issue an appropriate determination.
At the time of the first remand investigation, the subject
firm was in the process of transferring the corporate
headquarters facility from Lake Forest, California to Irvine,
California. AR 213. During the first remand investigation, the
Department confirmed all previously collected information,
obtained additional information from the subject firm regarding
domestic and foreign operations, solicited input from the
Plaintiffs, and addressed all of Plaintiffs’ allegations.
The information the Department received during the first
remand investigation contained more detail regarding the
operations of the subject firm domestically and abroad. In order
to determine whether there was a shift abroad of the engineering
services provided by the subject worker group, the Department had
to first determine whether the subject firm employs engineers at
its facilities in Asia who supply engineering services like or
directly competitive with those supplied by the subject worker
group.
The first remand investigation revealed that the business
model of the subject firm is to develop new products domestically
and carry out the manufacturing at its facilities overseas. AR
152, 212-218, 228-231, 244, 245-246, 271-279. After the design
and development of the products is provided by the subject worker
group, the production takes place at the foreign facilities -- a
process that the subject firm asserted did not change during the
relevant time period for the investigation of this petition. AR
152, 212-218, 228-231, 244, 245-246, 271-279.
Although Plaintiffs declared that the subject firm shifted
abroad the supply of engineering services which are like or
directly competitive with those provided by the subject worker
group (AR 154-182), based upon the data collected during the
first remand investigation, the Department determined that the
engineers employed at foreign facilities of the subject firm and
the engineers employed at domestic facilities of the subject firm
do not perform like or directly competitive functions. AR 152,
212-218, 228-231, 244, 245-246, 271-279. Because of the stage of
production at which the workers’ functions are performed, the
work performed by the engineers domestically and the engineers
abroad is not interchangeable; hence, the activities of the
subject firm at the manufacturing facilities overseas could not
have impacted the subject worker group. AR 152, 212-218, 228-231,
244, 245-246, 271-279.
According to the subject firm, the engineering work
performed abroad not only requires the engineers to be present at
the manufacturing location, but is also different and less
complex than the development work performed by the domestic
engineers. AR 152, 212-218, 228-231, 244, 245-246, 271-279.
Therefore, the Department determined that the work performed
overseas did not contribute importantly to worker separations
domestically because the services are not like or directly
competitive.
Regarding Plaintiffs’ allegation that the subject firm
brought foreign workers to be trained at the Lake Forest,
California facility, the subject firm asserted that the firm’s
business model calls for the development of products domestically
and for manufacturing at foreign facilities. AR 152, 212-218,
228-231, 244, 245-246, 271-279. The subject firm also stated
that the foreign engineers must be knowledgeable about the new
products in order to carry out their work; hence, they visit the
domestic facilities of the subject firm in order to train on the
new products to oversee the production at the manufacturing
facilities. Given the nature of these visits, the training of
foreign workers in the U.S. does not show that the roles of the
domestic and foreign engineers are interchangeable. AR 152, 212-
218, 228-231, 244, 245-246, 271-279.
Plaintiffs submitted a list of job announcements posted by
the subject firm in Malaysia. AR 154-182. The subject firm
maintained that at the time of the domestic reduction in force
(RIF) in late 2008 and early 2009, hiring efforts on a global
level were suspended. AR 208-218. The Department collected
employment numbers of engineers at Lake Forest, California,
Malaysia, and Thailand. AR 271-285. The numbers revealed that
employment of engineers decreased from December 2008 to June
2009, but started to increase at all three locations in late
2009. AR 241, 242, 243, 271-285. Based on the findings pertaining
to the work performed by the domestic and foreign engineers, the
Department did not consider the services of the domestic
engineers like or directly competitive with those provided by the
engineers at the production facilities overseas. Therefore, the
employment levels in these groups were not pertinent to the
outcome of the investigation.
Plaintiffs also alleged that increased imports of hard disk
drives contributed to worker separations. AR 154-182. Aggregate
U.S. import data of hard disk drives or articles like or directly
competitive showed a decline in the period under investigation.
Nonetheless, the Department determined that increased imports of
articles could not have contributed to worker separations because
the subject firm develops hard disk drives domestically and
manufactures them at the facilities in Asia. Therefore, an
increase in imports of articles could not have contributed to a
decline in the engineering services supplied by the subject
worker group.
For Section 222(a)(A)(ii)(II)(bb) of the Act to be met,
imports of articles like or directly competitive with articles
which are produced directly using services supplied by such firm,
must have increased. Because the subject firm does not produce
articles like or directly competitive with hard disk drives
domestically, this criterion was not met.
Based on careful consideration of all previously submitted
information and new facts obtained during the first remand
investigation, the Department determined that the subject worker
group did not meet the eligibility criteria of the Act and issued
a Negative Determination on Remand on September 23, 2011. AR 301.
The Notice of Determination was published in the Federal Register
on October 5, 2011 (76 FR 61746). SAR 1.
SECOND REMAND INVESTIGATION
On October 25, 2011, one of the Plaintiffs filed comments
with the USCIT regarding the negative remand determination. In
the comments, the Plaintiff made new allegations, stating that
the Department’s determination was erroneous because engineers at
the subject firm’s foreign facilities provide engineering
services like or directly competitive with those of the domestic
engineers and that the subject firm manufactures hard disk drives
domestically. In particular, the Plaintiffs alleged that the
subject worker group was engaged in activity related to the
production of hard disk drives -- “white label” pilot products –
and attached seven exhibits.
In response to the Plaintiffs’ comments, the Department
requested a second voluntary remand to review previously
collected information and conduct further investigation to
address the new allegations raised by the Plaintiff.
The comments contained statements intended to support the
Plaintiff’s claim that engineers at the foreign facilities engage
in design work and domestic engineers engage in production. The
comments included a list of job vacancies at the subject firm’s
facilities in Asia for engineering positions involving
production, design, and development work. In addition, the
Plaintiff stated that during his employment with the subject
firm, he provided services related to the domestic production of
hard disk drives. Further, the Plaintiff claimed that he trained
foreign engineers to perform design and development work, and
asserted that the employment data collected by the Department
during the first remand investigation demonstrated a shift of
engineering services abroad. AR 241, 242, 243, 271-285. The
comments highlighted that the subject firm manufactures hard disk
drives domestically through a pilot, or prototype, hard disk
drive production line, which produces hard disk drives for sale
to customers and that the hard disk drives imported from Malaysia
are like or directly competitive with the ones produced by
Western Digital domestically. Lastly, the Plaintiff commented
that the Department failed to collect import data of disk drives
during the first remand investigation.
In support of the allegations, the Plaintiff provided seven
exhibits. The first exhibit was a statement, which included the
Plaintiff’s position description at the subject firm and
information intended to establish that the Department had based
its negative determinations on erroneous findings that 1)the work
of the subject firm’s foreign and domestic engineers was not
interchangeable and that 2)the subject firm did not produce hard
disk drives, domestically.
In the first exhibit, the Plaintiff pointed to the list of
positions, submitted with the initial complaint to the USCIT, of
engineering services that appear to relate to production and
design work and one position advertised by Western Digital in
Malaysia that called for co-development of new product “with U.S.
counterpart”. The Plaintiff compared his job duties to those
advertised in Malaysia in an effort to show that the duties
overlapped. The Plaintiff added that he was engaged in New
Product Integration (NPI) work, which was considered production
work. The Plaintiff also stated that he trained foreign engineers
to perform the same development functions that he performed
during his employment with the subject firm, noting that he
worked directly with a foreign engineer who returned to the
subject firm’s Malaysian facility to perform the same work. In
addition, the Plaintiff claimed that the subject firm produces
hard disk drives domestically for sale to customers and that much
of its pilot hard disk drive production was transferred to Asia,
along with the associated engineering services.
In addition, the Plaintiff stated that the majority of the
job vacancies identified in the complaint to the USCIT involved
production and development work. However, according to the
position descriptions, none of the vacant positions involved the
design or development of hard disk drives. Further, careful
examination of the duties listed for each position establishes
that the work of these engineers relates to manufacturing. For
example, positions include duties such as “Willing to travel to
Asia QC Manufacturing-Drive” and “Communicate with US counterpart
to resolve factory issues.” The subject firm confirmed that the
engineering teams in Asia have never performed new product design
and their duties extend to sustaining production. AR 152, 212-
218, 228-231, 244, 245-246, 271-279.
Exhibit 1 also contained additional Asian job postings.
However, those vacancies were posted in October 2011, which is
almost three years after the reduction in force from which this
proceeding arose. Since that time, employment at the subject firm
has increased, both domestically and abroad. AR 241, 242, 243,
271-285. Therefore, the posting of these positions, almost three
years after worker separations occurred, could not have
contributed to the layoffs.
The Plaintiff stated that during his employment with Western
Digital he engaged in work related to domestic production of hard
disk drives. Based on the Plaintiff’s position description in
Exhibit 1, the Plaintiff had no work duties related to
production, other than program management support, which did not
specify location. Additionally, the Plaintiff was employed at the
headquarters facility of the subject firm, where no production
lines are operated. (Domestic manufacturing and the role of the
subject worker group in that production are discussed below.)
The Plaintiff also stated that the Department had ignored
employment data which demonstrated a shift in engineering
services abroad. Because, as determined during the initial remand
investigation, the functions of the subject worker group were not
like or directly competitive with those of the engineers at
Western Digital’s foreign facilities, the employment data in
question could not demonstrate that a relative increase in
employment abroad contributed to layoffs at the subject facility.
AR 292-300. During the second remand investigation, the subject
firm provided information which confirmed that domestic engineers
are solely responsible for the development and design of hard
disk drives. SAR 20.
The Plaintiff also claimed that the Department failed to
collect import data of hard disk drives. As explained in the
first remand determination, above, because there is no domestic
production of these products (see below for more information on
domestic production), any increases in imports of hard disk
drives would not have contributed to layoffs in the subject
worker group. As such, import statistics of hard disk drives were
irrelevant to the determination.
During the second remand investigation, the Department
contacted the subject firm to obtain more information regarding
the Plaintiff’s involvement in any domestic pilot hard disk drive
production. SAR 6. In response to the claim that the Plaintiff
was part of the New Product Integration team (NPI) and provided
work related to domestic production, the subject firm responded
that the NPI team handles the initial design work before mass
production takes place in Asia. SAR 8, 20, 26. The NPI team also
administers the pilot hard disk drive production at the San Jose,
California facility of the subject firm (see below for more
information on domestic production). As this team plays a role in
validating the design of a product before production, this part
of the process is considered part of the design and development
work. SAR 8, 20, 26. Therefore, the Department has concluded that
Exhibit 1 does not support a finding that the plaintiffs have met
the criteria for TAA eligibility
The second exhibit consisted of a list of 17 positions
posted by Western Digital in Malaysia. The listings are dated
October 19, 2011, which is almost three years after the
separations in the subject worker group were announced in
December 2008. Close examination of the listings showed that only
one position called for “co-develop new product and channel
feature with U.S. counterpart”. In any event, the position
description does not specify that the “co-development” refers to
hard disk drives. None of the other positions listed call for
development work of hard disk drives or any other products. Also,
out of the 17 listings, only three contain the words “develop” or
“design” and these three positions call for the development and
design of software and code applications, not hard disk drives,
which the subject firm has ascertained is the function of the
domestic engineers. AR 152, 212-218, 228-231, 244, 245-246, 271-
279 and SAR 8, 20, 26. Also, none of the positions provided by
the Plaintiffs with the complaint contained the words “develop”
or “design”.
The third exhibit consisted of a job announcement and
position description of “Western Digital Senior Engineer/Staff
Engineer – Asia R&D – Advance Read Channel Engineering”. The
description of this position does not mention new product design
or any related duties. The description, however, mentions
“failure analysis”, which is a duty that the subject firm has
explained that occurs both domestically and in Asia, depending on
the life stage of a product. AR 208, 292 and SAR 8, 20, 26.
Additionally, this position was posted in August 2011, more than
two and a half years after the RIF was announced at the subject
firm.
The fourth exhibit consisted of a position description of a
Product Engineer. This position announcement mentions that the
position may include failure analysis and research and
development but it does not include a specific description of
duties. The work duties listed in this announcement are
consistent with those described by the subject firm. In
particular, the subject firm has stated that the work of the
engineers overseas is designed to carry out the manufacturing
process and sustain the work performed on existing hard disk
drives. AR 152, 212-218, 228-231, 244, 245-246, 271-279.
The fifth exhibit consisted of the profile, as listed on an
online social network, of an engineer employed at one of the
subject firm’s facilities in Asia. Although the profile shows
that the engineer was employed at the Lake Forest, California
facility and then transferred to Malaysia, the profile does not
include a description of job duties performed at either location.
The sixth exhibit consisted of Western Digital’s career
opportunities page from the subject firm’s website which shows
that there are manufacturing facilities in California. As the
findings of the first remand investigation showed, the subject
firm operates two domestic manufacturing sites in California. The
articles produced at the domestic locations are component parts
used for internal purposes. The second remand investigation found
that one of the domestic facilities also manufactures pilot hard
disk drives (see below).
The last exhibit consisted of the subject firm’s company
profile from an employment website. The profile does not list
any specifics related to positions domestically or abroad but
mentions that the subject firm operates manufacturing facilities
in California. The domestic manufacturing operations of the
subject firm are addressed above.
The second remand investigation produced further explanation
of the process by which the subject firm produces hard disk
drives. As discussed above, the subject worker group designs the
hard disk drives domestically. Before the design is sent overseas
for mass production, the subject firm manufactures prototype hard
disk drives to ensure that the new designs are functional. SAR 8,
20, 26. The subject firm stated that prototype creation is part
of the design of hard drives because a prototype must be created,
tested, and validated before sending the product for mass
production. SAR 8, 20, 26.
Although the pilot hard disk drives produced are used mainly
for development purposes, the subject firm operates a White Label
program via which it sells a portion of the pilot hard disk
drives externally. SAR 8, 20, 26. The subject firm has three
prototype production lines located in San Jose, California,
Malaysia, and Thailand. SAR 20, 26. In response to Plaintiff’s
allegation that prototype production has shifted abroad, the
subject firm substantiated that no domestic production of the
pilot drives has shifted overseas in the period under
investigation. SAR 20, 26.
The Department collected information from the subject firm
related to the size of each operation and the number of
prototypes that are sold. The numbers revealed that the domestic
production of the pilot drives constitutes a small number of the
prototypes sold under the White Label program and a negligible
portion of overall hard disk drive production. SAR 8, 20, 26.
It is well-established that a negligible shift of production
to a foreign country cannot be a basis for TAA certification. In
Barry Callebaut USA, Inc., Van Leer Division, Jersey City, New
Jersey (TA-W-37,000; USCIT No. 03-1113; February 10, 2004), the
Department determined that a three percent shift of production
was not sufficient basis to satisfy the criteria for
certification. Appling the same analysis in the present case,
the Department has determined that because the pilot hard disk
drive production at the subject firm is not significant relative
to overall hard disk drive production, any trade impact on the
pilot hard disk drive production line could not have contributed
to separations in the subject worker group.
Upon review of the facts collected during the earlier
investigations and the additional information procured through
the second remand investigation, the Department has determined
that the services provided by engineers at the subject firm’s
Asian facilities are not like or directly competitive with the
services of the engineers located at the subject facility.
Additionally, the domestic production of hard disk drives is de
minimus relative to the subject firm’s overall operations, such
that any trade impact could not have contributed to worker
separations at the subject firm. Accordingly, the Department
reaffirms that the petitioning workers have not met the
eligibility criteria of section 222(a) of the Act.
Conclusion
After careful consideration of the record, I affirm the
original notice of negative determination of eligibility to apply
for worker adjustment assistance applicable to workers and former
workers of Western Digital Technologies, Inc., Hard Drive
Development Engineering Group, Irvine (formerly at Lake Forest)
California.
Signed at Washington, D.C. this 23rd day of January, 2012
/s/ Del Min Amy Chen
___________________________________
DEL MIN AMY CHEN
Certifying Officer, Office of
Trade Adjustment Assistance
4510-FN-P
DEPARTMENT OF LABOR
Employment and Training Administration
TA-W-72,949
WESTERN DIGITAL TECHNOLOGIES, INC.
COPORATE HEADQUATERS/HARD DRIVE DEVELOPMENT DIVISION
LAKE FOREST, CALIFORNIA
Notice of Negative Determination
on Reconsideration
On October 7, 2010, the Department of Labor issued an
Affirmative Determination Regarding Application for
Reconsideration for the workers and former workers of Western
Digital Technologies, Inc., Corporate Headquarters/Hard Drive
Development Division, Lake Forest, California (Western Digital
Technologies). The Department’s Notice was published in the
Federal Register on October 25, 2010 (75 FR 65517). The subject
workers supply engineering (development) services in support of
hard drive (also known as disk drive) manufacturing.
The initial negative determination was based on the
Department’s findings that that the subject firm did not
increase imports of like or directly competitive services and
did not shift to a foreign country the supply of these
services. The investigation also revealed that the subject firm
does not supply services that were directly used in the
production of an article by a firm that employed a worker group
eligible to apply for TAA. Because the services were supplied
internally, no customer survey was conducted.
The request for reconsideration alleges that increased imports
of articles that were produced directly using the services supplied
by the subject workers contributed importantly to separations at
the subject firm.
Information obtained during the reconsideration investigation
confirmed that, during the relevant period, the workers’ firm did
not shift to a foreign country the supply of services like or
directly competitive with the engineering services supplied by the
workers nor has there has been an acquisition by the subject firm
from a foreign country of like or directly competitive services;
that the subject firm did not increase services like or directly
competitive with the engineering services supplied by the workers;
and the subject firm did not increase imports of articles that were
produced directly using services supplied by the subject workers.
Conclusion
After reconsideration, I affirm the original notice of
negative determination of eligibility to apply for worker
adjustment assistance for workers and former workers of Western
Digital Technologies, Inc., Corporate Headquarters/Hard Drive
Development Division, Lake Forest, California.
Signed in Washington, D.C., on this 4th day of February, 2011
/s/ Del Min Amy Chen
_______________________________
DEL MIN AMY CHEN
Certifying Officer, Office of
Trade Adjustment Assistance
4510-FN-P
DEPARTMENT OF LABOR
Employment and Training Administration
TA-W-72,949
WESTERN DIGITAL TECHNOLOGIES, INC.
CORPORATE HEADQUARTERS/HARD DRIVE DEVELOPMENT DIVISION
LAKE FOREST, CALIFORNIA
Negative Determination Regarding Eligibility
To Apply for Worker Adjustment Assistance
In accordance with Section 223 of the Trade Act of 1974, as
amended (“Act”), 19 U.S.C. § 2273, the Department of Labor herein
presents the results of an investigation regarding certification of
eligibility to apply for worker adjustment assistance.
Workers of a firm may be eligible for worker adjustment
assistance if they satisfy the criteria of subsection (a), (c) or
(f) of Section 222 of the Act, 19 U.S.C. § 2272(a), (c), (f). For
the Department of Labor to issue a certification for workers under
Section 222(a) of the Act, 19 U.S.C. § 2272(a), the following three
criteria must be met:
I. The first criterion (set forth in Section 222(a)(1) of the
Act, 19 U.S.C. § 2282(a)(1)) requires that a significant
number or proportion of the workers in the workers’ firm must
have become totally or partially separated or be threatened
with total or partial separation.
II. The second criterion (set forth in Section 222(a)(2) of the
Act, 19 U.S.C. § 2272(a)(2)) may be satisfied in one of two
ways:
(A) Increased Imports Path:
(i) sales or production, or both, at the workers’ firm must
have decreased absolutely, AND
(ii) (I) imports of articles or services like or directly
competitive with articles or services produced or
supplied by the workers’ firm have increased, OR
(II)(aa) imports of articles like or directly
competitive with articles into which the component
part produced by the workers’ firm was directly
incorporated have increased; OR
(II)(bb) imports of articles like or directly
competitive with articles which are produced
directly using the services supplied by the
workers’ firm have increased; OR
(III) imports of articles directly incorporating
component parts not produced in the U.S. that are
like or directly competitive with the article into
which the component part produced by the workers’
firm was directly incorporated have increased.
(B) Shift in Production or Supply Path:
(i)(I) there has been a shift by the workers’ firm to a
foreign country in the production of articles or supply
of services like or directly competitive with those
produced/supplied by the workers’ firm; OR
(i)(II) there has been an acquisition from a foreign country
by the workers’ firm of articles/services that are like
or directly competitive with those produced/supplied by
the workers’ firm.
III. The third criterion requires that the increase in imports or
shift/acquisition must have contributed importantly to the
workers’ separation or threat of separation. See Sections
222(a)(2)(A)(iii) and 222(a)(2)(B)(ii) of the Act, 19 U.S.C.
§§ 2272(a)(2)(A)(iii), 2272(a)(2)(B)(ii).
Section 222(d) of the Act, 19 U.S.C. § 2272(d), defines the
terms “Supplier” and “Downstream Producer.” For the Department to
issue a secondary worker certification under Section 222(c) of the
Act, 19 U.S.C. § 2272(c), to workers of a Supplier or a Downstream
Producer, the following criteria must be met:
(1) a significant number or proportion of the workers in the
workers’ firm or an appropriate subdivision of the firm
have become totally or partially separated, or are
threatened to become totally or partially separated;
(2) the workers’ firm is a Supplier or Downstream Producer to
a firm that employed a group of workers who received a
certification of eligibility under Section 222(a) of the
Act, 19 U.S.C. § 2272(a), and such supply or production
is related to the article or service that was the basis
for such certification; and
(3) either
(A) the workers’ firm is a supplier and the component parts
it supplied to the firm described in paragraph (2)
accounted for at least 20 percent of the production or
sales of the workers’ firm; or
(B) a loss of business by the workers’ firm with the firm
described in paragraph (2) contributed importantly to the
workers’ separation or threat of separation.
Workers of a firm may also be considered eligible if they
are publicly identified by name by the International Trade
Commission as a member of a domestic industry in an investigation
resulting in a category of determination that is listed in
Section 222(f) of the Act, 19 U.S.C. § 2272(f).
The group eligibility requirements for workers of a firm under
Section 222(f) of the Act, 19 U.S.C. § 2272(f), can be satisfied if
the following criteria are met:
(1) the workers’ firm is publicly identified by name by the
International Trade Commission as a member of a domestic
industry in an investigation resulting in--
(A) an affirmative determination of serious injury or
threat thereof under section 202(b)(1);
(B) an affirmative determination of market disruption
or threat thereof under section 421(b)(1); or
(C) an affirmative final determination of material
injury or threat thereof under section 705(b)(1)(A)
or 735(b)(1)(A) of the Tariff Act of 1930 (19
U.S.C. 1671d(b)(1)(A) and 1673d(b)(1)(A));
(2) the petition is filed during the 1-year period beginning
on the date on which--
(A) a summary of the report submitted to the President
by the International Trade Commission under section
202(f)(1) with respect to the affirmative
determination described in paragraph (1)(A) is
published in the Federal Register under section
202(f)(3); or
(B) notice of an affirmative determination described in
subparagraph (1) is published in the Federal
Register; and
(3) the workers have become totally or partially
separated from the workers’ firm within--
(A) the 1-year period described in paragraph (2); or
(B) notwithstanding section 223(b)(1), the 1-year
period preceding the 1-year period described in
paragraph (2).
The investigation was initiated in response to a petition
filed on November 25, 2009 on behalf of workers of Western Digital
Technologies, Inc., Corporate Headquarters/Hard Drive Development
Division, Lake Forest, California. The workers are engaged in
activities related to the supply of engineering services. The Lake
Forest, California corporate headquarters of Western Digital
Technologies house the Hard Drive Development (HDD) function and
supporting departments. Workers in the HDD division are
responsible for design and development of digital storage devices.
The petitioners alleged that worker separations are
attributable to the firm using workers brought to the United States
from a foreign country. The investigation included analysis of
data provided by a company official.
With respect to Section 222(a) of the Act, the investigation
revealed that Criterion II has not been met because there have
not been increased imports of articles produced or services
supplied by the workers’ firm and there has not been a shift to a
foreign country in the production of articles or the supply of
services by the firm.
With respect to Section 222(c) of the Act, the investigation
revealed that Criterion (2) has not been met because Western
Digital Technologies is not a Supplier or Downstream Producer to a
firm that employed a TAA-certified worker group.
Finally, the group eligibility requirements under Section
222(f) of the Act, 19 U.S.C. § 2272(f), have not been satisfied
because Western Digital has not been publicly identified in an
affirmative finding of injury by the International Trade
Commission.
Conclusion
After careful review of the facts obtained in the
investigation, I determine that workers of Western Digital
Technologies, Inc., Corporate Headquarters/Hard Drive Development
Division, Lake Forest, California, who are engaged in activities
related to engineering services, are denied eligibility to apply
for adjustment assistance under Section 223 of the Act, 19 U.S.C. §
2273.
Signed in Washington, D.C., this 5th day of August, 2010
/s/Michael W. Jaffe
______________________________
MICHAEL W. JAFFE
Certifying Officer, Office of
Trade Adjustment Assistance
- 29 -
Employment and Training Administration
TA-W-72,949
WESTERN DIGITAL TECHNOLOGIES, INC.
HARD DRIVE DEVELOPMENT ENGINEERING GROUP
IRVINE (FORMERLY AT LAKE FOREST), CALIFORNIA
Notice of Negative Determination
On Remand
On November 22, 2011, the U. S. Court of International Trade
(USCIT) granted the Department of Labor’s second request for
voluntary remand to conduct further investigation in Former
Employees of Western Digital Technologies, Inc. v. United States
Secretary of Labor (Court No. 11-00085).
On November 25, 2009, former workers of Western Digital
Technologies, Inc., Hard Drive Development Engineering Group,
Lake Forest, California (subject firm) filed a petition for Trade
Adjustment Assistance (TAA) on behalf of workers at the subject
firm. AR 1. The worker group covered under this petition
(subject worker group) consists of workers engaged in the supply
of engineering functions for the development of hard disk drives.
The initial investigation revealed that the subject firm had
not shifted abroad the supply of services like or directly
competitive with those provided by the subject worker group, that
the subject firm had not acquired such services from abroad, and
there had not been an increase in imports of articles or services
like or directly competitive with those produced or supplied by
the subject firm. AR 72-77. Further, the initial investigation
revealed that the subject firm could not be considered a Supplier
or Downstream Producer to a firm that employed a worker group
eligible to apply for TAA. AR 72-77. On August 5, 2010, the
Department of Labor (Department) issued a Negative Determination
regarding eligibility to apply for TAA applicable to workers and
former workers of the subject firm. The Department’s Notice of
Negative Determination was published in the Federal Register on
August 23, 2010 (75 FR 51849). AR 82.
The group eligibility requirements for workers of a Firm under
Section 222(a) of the Act, 19 U.S.C. § 2272(a), can be satisfied if
the following criteria are met:
(1) a significant number or proportion of the workers in such
workers’ firm have become totally or partially separated, or
are threatened to become totally or partially separated; and
(2)(A)(i) the sales or production, or both, of such firm have
decreased absolutely;
(ii)(I) imports of articles or services like or directly
competitive with articles produced or services supplied by
such firm have increased;
(II) imports of articles like or directly competitive with
articles—
(aa) into which one or more component parts produced by
such firm are directly incorporated, or
(bb) which are produced directly using services supplied
by such firm,
have increased; or
(III) imports of articles directly incorporating one or
more component parts produced outside the United States that
are like or directly competitive with imports of articles
incorporating one or more component parts produced by such
firm have increased; and
(iii) the increase in imports described in clause (ii)
contributed importantly to such workers’ separation or threat
of separation and to the decline in the sales or production
of such firm; or
(B)(i)(I) there has been a shift by such workers’ firm to a
foreign country in the production of articles or the supply of
services like or directly competitive with articles which are
produced or services which are supplied by such firm; or
(II) such workers’ firm has acquired from a foreign
country articles or services that are like or directly
competitive with articles which are produced or services
which are supplied by such firm; and
(ii) the shift described in clause (i)(I) or the acquisition
of articles or services described in clause (i)(II)
contributed importantly to such workers’ separation or threat
of separation.
By application dated September 14, 2010, the petitioning
workers requested administrative reconsideration of the
Department’s negative determination. AR 83. In the request, the
petitioners alleged that increased imports of articles that were
produced using the services supplied by the subject worker group
contributed importantly to worker separations at the subject
firm. AR 83.
To investigate the petitioners’ claim, the Department issued
a Notice of Affirmative Determination Regarding Application for
Reconsideration on October 7, 2010. AR 84. The Department’s
Notice of Affirmative Determination was published in the Federal
Register on October 25, 2010 (75 FR 65517). AR 286.
During the reconsideration investigation, the Department
obtained information from the subject firm regarding the
petitioners’ claims and collected data from the U.S.
International Trade Commission regarding imports of articles like
or directly competitive with those produced using the services
supplied by the subject worker group. AR 89-125, 126, 127.
Based on the findings of the reconsideration investigation,
the Department concluded that worker separations at the subject
firm were not caused by a shift in services abroad or increased
imports of services like or directly competitive with those
provided by the subject worker group. AR 89-125. Further, the
reconsideration investigation revealed that the subject firm did
not import articles like or directly competitive with those
produced directly using services supplied by the subject worker
group, AR 89-125, and U.S. aggregate imports of articles like or
directly competitive with hard disk drives declined in the
relevant time period. AR 126, 134-136, 137, 141-142, 143-145.
Consequently, the Department issued a Notice of Negative
Determination on Reconsideration on February 4, 2011. AR 129-130.
The Department’s Notice of determination was published in the
Federal Register, on February 24, 2011 (75 FR 10403). AR 287.
FIRST REMAND INVESTIGATION
On April 11, 2011, Plaintiffs filed a complaint with the
USCIT in which they claimed that their separations were directly
caused by the subject firm’s foreign operations and increased
imports of hard disk drives, and provided information in support
of these claims. The Plaintiffs stated that the subject firm
trained foreign engineers at the Lake Forest, California
facility, who then returned to their respective countries to
perform the same services as the Plaintiffs, and provided a list
of job announcements for engineers posted by the subject firm in
Malaysia at the same time as the domestic layoffs. Further, the
Plaintiffs provided import statistics pertaining to hard disk
drives, specifically pointing to increased imports of these
articles from Malaysia.
In a letter submitted to the Department on June 13, 2011,
Plaintiffs provided additional information surrounding the
layoffs of the workers, including supporting information relating
to the allegations made in the complaint to the USCIT. AR 154-
182. Plaintiffs provided a list of several engineering positions
and functions that allegedly shifted to Asia from the Lake
Forest, California facility and included statements on how
engineering functions were transferred abroad, presenting details
regarding the training of foreign workers who returned overseas
to perform the same functions as Plaintiffs. AR 154-182.
The Department requested voluntary remand to address the
allegations made by the Plaintiffs, to determine whether the
subject worker group is eligible to apply for TAA under the Trade
Act of 1974, as amended (hereafter referred to as the Act), and
to issue an appropriate determination.
At the time of the first remand investigation, the subject
firm was in the process of transferring the corporate
headquarters facility from Lake Forest, California to Irvine,
California. AR 213. During the first remand investigation, the
Department confirmed all previously collected information,
obtained additional information from the subject firm regarding
domestic and foreign operations, solicited input from the
Plaintiffs, and addressed all of Plaintiffs’ allegations.
The information the Department received during the first
remand investigation contained more detail regarding the
operations of the subject firm domestically and abroad. In order
to determine whether there was a shift abroad of the engineering
services provided by the subject worker group, the Department had
to first determine whether the subject firm employs engineers at
its facilities in Asia who supply engineering services like or
directly competitive with those supplied by the subject worker
group.
The first remand investigation revealed that the business
model of the subject firm is to develop new products domestically
and carry out the manufacturing at its facilities overseas. AR
152, 212-218, 228-231, 244, 245-246, 271-279. After the design
and development of the products is provided by the subject worker
group, the production takes place at the foreign facilities -- a
process that the subject firm asserted did not change during the
relevant time period for the investigation of this petition. AR
152, 212-218, 228-231, 244, 245-246, 271-279.
Although Plaintiffs declared that the subject firm shifted
abroad the supply of engineering services which are like or
directly competitive with those provided by the subject worker
group (AR 154-182), based upon the data collected during the
first remand investigation, the Department determined that the
engineers employed at foreign facilities of the subject firm and
the engineers employed at domestic facilities of the subject firm
do not perform like or directly competitive functions. AR 152,
212-218, 228-231, 244, 245-246, 271-279. Because of the stage of
production at which the workers’ functions are performed, the
work performed by the engineers domestically and the engineers
abroad is not interchangeable; hence, the activities of the
subject firm at the manufacturing facilities overseas could not
have impacted the subject worker group. AR 152, 212-218, 228-231,
244, 245-246, 271-279.
According to the subject firm, the engineering work
performed abroad not only requires the engineers to be present at
the manufacturing location, but is also different and less
complex than the development work performed by the domestic
engineers. AR 152, 212-218, 228-231, 244, 245-246, 271-279.
Therefore, the Department determined that the work performed
overseas did not contribute importantly to worker separations
domestically because the services are not like or directly
competitive.
Regarding Plaintiffs’ allegation that the subject firm
brought foreign workers to be trained at the Lake Forest,
California facility, the subject firm asserted that the firm’s
business model calls for the development of products domestically
and for manufacturing at foreign facilities. AR 152, 212-218,
228-231, 244, 245-246, 271-279. The subject firm also stated
that the foreign engineers must be knowledgeable about the new
products in order to carry out their work; hence, they visit the
domestic facilities of the subject firm in order to train on the
new products to oversee the production at the manufacturing
facilities. Given the nature of these visits, the training of
foreign workers in the U.S. does not show that the roles of the
domestic and foreign engineers are interchangeable. AR 152, 212-
218, 228-231, 244, 245-246, 271-279.
Plaintiffs submitted a list of job announcements posted by
the subject firm in Malaysia. AR 154-182. The subject firm
maintained that at the time of the domestic reduction in force
(RIF) in late 2008 and early 2009, hiring efforts on a global
level were suspended. AR 208-218. The Department collected
employment numbers of engineers at Lake Forest, California,
Malaysia, and Thailand. AR 271-285. The numbers revealed that
employment of engineers decreased from December 2008 to June
2009, but started to increase at all three locations in late
2009. AR 241, 242, 243, 271-285. Based on the findings pertaining
to the work performed by the domestic and foreign engineers, the
Department did not consider the services of the domestic
engineers like or directly competitive with those provided by the
engineers at the production facilities overseas. Therefore, the
employment levels in these groups were not pertinent to the
outcome of the investigation.
Plaintiffs also alleged that increased imports of hard disk
drives contributed to worker separations. AR 154-182. Aggregate
U.S. import data of hard disk drives or articles like or directly
competitive showed a decline in the period under investigation.
Nonetheless, the Department determined that increased imports of
articles could not have contributed to worker separations because
the subject firm develops hard disk drives domestically and
manufactures them at the facilities in Asia. Therefore, an
increase in imports of articles could not have contributed to a
decline in the engineering services supplied by the subject
worker group.
For Section 222(a)(A)(ii)(II)(bb) of the Act to be met,
imports of articles like or directly competitive with articles
which are produced directly using services supplied by such firm,
must have increased. Because the subject firm does not produce
articles like or directly competitive with hard disk drives
domestically, this criterion was not met.
Based on careful consideration of all previously submitted
information and new facts obtained during the first remand
investigation, the Department determined that the subject worker
group did not meet the eligibility criteria of the Act and issued
a Negative Determination on Remand on September 23, 2011. AR 301.
The Notice of Determination was published in the Federal Register
on October 5, 2011 (76 FR 61746). SAR 1.
SECOND REMAND INVESTIGATION
On October 25, 2011, one of the Plaintiffs filed comments
with the USCIT regarding the negative remand determination. In
the comments, the Plaintiff made new allegations, stating that
the Department’s determination was erroneous because engineers at
the subject firm’s foreign facilities provide engineering
services like or directly competitive with those of the domestic
engineers and that the subject firm manufactures hard disk drives
domestically. In particular, the Plaintiffs alleged that the
subject worker group was engaged in activity related to the
production of hard disk drives -- “white label” pilot products –
and attached seven exhibits.
In response to the Plaintiffs’ comments, the Department
requested a second voluntary remand to review previously
collected information and conduct further investigation to
address the new allegations raised by the Plaintiff.
The comments contained statements intended to support the
Plaintiff’s claim that engineers at the foreign facilities engage
in design work and domestic engineers engage in production. The
comments included a list of job vacancies at the subject firm’s
facilities in Asia for engineering positions involving
production, design, and development work. In addition, the
Plaintiff stated that during his employment with the subject
firm, he provided services related to the domestic production of
hard disk drives. Further, the Plaintiff claimed that he trained
foreign engineers to perform design and development work, and
asserted that the employment data collected by the Department
during the first remand investigation demonstrated a shift of
engineering services abroad. AR 241, 242, 243, 271-285. The
comments highlighted that the subject firm manufactures hard disk
drives domestically through a pilot, or prototype, hard disk
drive production line, which produces hard disk drives for sale
to customers and that the hard disk drives imported from Malaysia
are like or directly competitive with the ones produced by
Western Digital domestically. Lastly, the Plaintiff commented
that the Department failed to collect import data of disk drives
during the first remand investigation.
In support of the allegations, the Plaintiff provided seven
exhibits. The first exhibit was a statement, which included the
Plaintiff’s position description at the subject firm and
information intended to establish that the Department had based
its negative determinations on erroneous findings that 1)the work
of the subject firm’s foreign and domestic engineers was not
interchangeable and that 2)the subject firm did not produce hard
disk drives, domestically.
In the first exhibit, the Plaintiff pointed to the list of
positions, submitted with the initial complaint to the USCIT, of
engineering services that appear to relate to production and
design work and one position advertised by Western Digital in
Malaysia that called for co-development of new product “with U.S.
counterpart”. The Plaintiff compared his job duties to those
advertised in Malaysia in an effort to show that the duties
overlapped. The Plaintiff added that he was engaged in New
Product Integration (NPI) work, which was considered production
work. The Plaintiff also stated that he trained foreign engineers
to perform the same development functions that he performed
during his employment with the subject firm, noting that he
worked directly with a foreign engineer who returned to the
subject firm’s Malaysian facility to perform the same work. In
addition, the Plaintiff claimed that the subject firm produces
hard disk drives domestically for sale to customers and that much
of its pilot hard disk drive production was transferred to Asia,
along with the associated engineering services.
In addition, the Plaintiff stated that the majority of the
job vacancies identified in the complaint to the USCIT involved
production and development work. However, according to the
position descriptions, none of the vacant positions involved the
design or development of hard disk drives. Further, careful
examination of the duties listed for each position establishes
that the work of these engineers relates to manufacturing. For
example, positions include duties such as “Willing to travel to
Asia QC Manufacturing-Drive” and “Communicate with US counterpart
to resolve factory issues.” The subject firm confirmed that the
engineering teams in Asia have never performed new product design
and their duties extend to sustaining production. AR 152, 212-
218, 228-231, 244, 245-246, 271-279.
Exhibit 1 also contained additional Asian job postings.
However, those vacancies were posted in October 2011, which is
almost three years after the reduction in force from which this
proceeding arose. Since that time, employment at the subject firm
has increased, both domestically and abroad. AR 241, 242, 243,
271-285. Therefore, the posting of these positions, almost three
years after worker separations occurred, could not have
contributed to the layoffs.
The Plaintiff stated that during his employment with Western
Digital he engaged in work related to domestic production of hard
disk drives. Based on the Plaintiff’s position description in
Exhibit 1, the Plaintiff had no work duties related to
production, other than program management support, which did not
specify location. Additionally, the Plaintiff was employed at the
headquarters facility of the subject firm, where no production
lines are operated. (Domestic manufacturing and the role of the
subject worker group in that production are discussed below.)
The Plaintiff also stated that the Department had ignored
employment data which demonstrated a shift in engineering
services abroad. Because, as determined during the initial remand
investigation, the functions of the subject worker group were not
like or directly competitive with those of the engineers at
Western Digital’s foreign facilities, the employment data in
question could not demonstrate that a relative increase in
employment abroad contributed to layoffs at the subject facility.
AR 292-300. During the second remand investigation, the subject
firm provided information which confirmed that domestic engineers
are solely responsible for the development and design of hard
disk drives. SAR 20.
The Plaintiff also claimed that the Department failed to
collect import data of hard disk drives. As explained in the
first remand determination, above, because there is no domestic
production of these products (see below for more information on
domestic production), any increases in imports of hard disk
drives would not have contributed to layoffs in the subject
worker group. As such, import statistics of hard disk drives were
irrelevant to the determination.
During the second remand investigation, the Department
contacted the subject firm to obtain more information regarding
the Plaintiff’s involvement in any domestic pilot hard disk drive
production. SAR 6. In response to the claim that the Plaintiff
was part of the New Product Integration team (NPI) and provided
work related to domestic production, the subject firm responded
that the NPI team handles the initial design work before mass
production takes place in Asia. SAR 8, 20, 26. The NPI team also
administers the pilot hard disk drive production at the San Jose,
California facility of the subject firm (see below for more
information on domestic production). As this team plays a role in
validating the design of a product before production, this part
of the process is considered part of the design and development
work. SAR 8, 20, 26. Therefore, the Department has concluded that
Exhibit 1 does not support a finding that the plaintiffs have met
the criteria for TAA eligibility
The second exhibit consisted of a list of 17 positions
posted by Western Digital in Malaysia. The listings are dated
October 19, 2011, which is almost three years after the
separations in the subject worker group were announced in
December 2008. Close examination of the listings showed that only
one position called for “co-develop new product and channel
feature with U.S. counterpart”. In any event, the position
description does not specify that the “co-development” refers to
hard disk drives. None of the other positions listed call for
development work of hard disk drives or any other products. Also,
out of the 17 listings, only three contain the words “develop” or
“design” and these three positions call for the development and
design of software and code applications, not hard disk drives,
which the subject firm has ascertained is the function of the
domestic engineers. AR 152, 212-218, 228-231, 244, 245-246, 271-
279 and SAR 8, 20, 26. Also, none of the positions provided by
the Plaintiffs with the complaint contained the words “develop”
or “design”.
The third exhibit consisted of a job announcement and
position description of “Western Digital Senior Engineer/Staff
Engineer – Asia R&D – Advance Read Channel Engineering”. The
description of this position does not mention new product design
or any related duties. The description, however, mentions
“failure analysis”, which is a duty that the subject firm has
explained that occurs both domestically and in Asia, depending on
the life stage of a product. AR 208, 292 and SAR 8, 20, 26.
Additionally, this position was posted in August 2011, more than
two and a half years after the RIF was announced at the subject
firm.
The fourth exhibit consisted of a position description of a
Product Engineer. This position announcement mentions that the
position may include failure analysis and research and
development but it does not include a specific description of
duties. The work duties listed in this announcement are
consistent with those described by the subject firm. In
particular, the subject firm has stated that the work of the
engineers overseas is designed to carry out the manufacturing
process and sustain the work performed on existing hard disk
drives. AR 152, 212-218, 228-231, 244, 245-246, 271-279.
The fifth exhibit consisted of the profile, as listed on an
online social network, of an engineer employed at one of the
subject firm’s facilities in Asia. Although the profile shows
that the engineer was employed at the Lake Forest, California
facility and then transferred to Malaysia, the profile does not
include a description of job duties performed at either location.
The sixth exhibit consisted of Western Digital’s career
opportunities page from the subject firm’s website which shows
that there are manufacturing facilities in California. As the
findings of the first remand investigation showed, the subject
firm operates two domestic manufacturing sites in California. The
articles produced at the domestic locations are component parts
used for internal purposes. The second remand investigation found
that one of the domestic facilities also manufactures pilot hard
disk drives (see below).
The last exhibit consisted of the subject firm’s company
profile from an employment website. The profile does not list
any specifics related to positions domestically or abroad but
mentions that the subject firm operates manufacturing facilities
in California. The domestic manufacturing operations of the
subject firm are addressed above.
The second remand investigation produced further explanation
of the process by which the subject firm produces hard disk
drives. As discussed above, the subject worker group designs the
hard disk drives domestically. Before the design is sent overseas
for mass production, the subject firm manufactures prototype hard
disk drives to ensure that the new designs are functional. SAR 8,
20, 26. The subject firm stated that prototype creation is part
of the design of hard drives because a prototype must be created,
tested, and validated before sending the product for mass
production. SAR 8, 20, 26.
Although the pilot hard disk drives produced are used mainly
for development purposes, the subject firm operates a White Label
program via which it sells a portion of the pilot hard disk
drives externally. SAR 8, 20, 26. The subject firm has three
prototype production lines located in San Jose, California,
Malaysia, and Thailand. SAR 20, 26. In response to Plaintiff’s
allegation that prototype production has shifted abroad, the
subject firm substantiated that no domestic production of the
pilot drives has shifted overseas in the period under
investigation. SAR 20, 26.
The Department collected information from the subject firm
related to the size of each operation and the number of
prototypes that are sold. The numbers revealed that the domestic
production of the pilot drives constitutes a small number of the
prototypes sold under the White Label program and a negligible
portion of overall hard disk drive production. SAR 8, 20, 26.
It is well-established that a negligible shift of production
to a foreign country cannot be a basis for TAA certification. In
Barry Callebaut USA, Inc., Van Leer Division, Jersey City, New
Jersey (TA-W-37,000; USCIT No. 03-1113; February 10, 2004), the
Department determined that a three percent shift of production
was not sufficient basis to satisfy the criteria for
certification. Appling the same analysis in the present case,
the Department has determined that because the pilot hard disk
drive production at the subject firm is not significant relative
to overall hard disk drive production, any trade impact on the
pilot hard disk drive production line could not have contributed
to separations in the subject worker group.
Upon review of the facts collected during the earlier
investigations and the additional information procured through
the second remand investigation, the Department has determined
that the services provided by engineers at the subject firm’s
Asian facilities are not like or directly competitive with the
services of the engineers located at the subject facility.
Additionally, the domestic production of hard disk drives is de
minimus relative to the subject firm’s overall operations, such
that any trade impact could not have contributed to worker
separations at the subject firm. Accordingly, the Department
reaffirms that the petitioning workers have not met the
eligibility criteria of section 222(a) of the Act.
Conclusion
After careful consideration of the record, I affirm the
original notice of negative determination of eligibility to apply
for worker adjustment assistance applicable to workers and former
workers of Western Digital Technologies, Inc., Hard Drive
Development Engineering Group, Irvine (formerly at Lake Forest)
California.
Signed at Washington, D.C. this 23rd day of January, 2012
/s/ Del Min Amy Chen
___________________________________
DEL MIN AMY CHEN
Certifying Officer, Office of
Trade Adjustment Assistance
4510-FN-P
DEPARTMENT OF LABOR
Employment and Training Administration
TA-W-72,949
WESTERN DIGITAL TECHNOLOGIES, INC.
COPORATE HEADQUATERS/HARD DRIVE DEVELOPMENT DIVISION
LAKE FOREST, CALIFORNIA
Notice of Negative Determination
on Reconsideration
On October 7, 2010, the Department of Labor issued an
Affirmative Determination Regarding Application for
Reconsideration for the workers and former workers of Western
Digital Technologies, Inc., Corporate Headquarters/Hard Drive
Development Division, Lake Forest, California (Western Digital
Technologies). The Department’s Notice was published in the
Federal Register on October 25, 2010 (75 FR 65517). The subject
workers supply engineering (development) services in support of
hard drive (also known as disk drive) manufacturing.
The initial negative determination was based on the
Department’s findings that that the subject firm did not
increase imports of like or directly competitive services and
did not shift to a foreign country the supply of these
services. The investigation also revealed that the subject firm
does not supply services that were directly used in the
production of an article by a firm that employed a worker group
eligible to apply for TAA. Because the services were supplied
internally, no customer survey was conducted.
The request for reconsideration alleges that increased imports
of articles that were produced directly using the services supplied
by the subject workers contributed importantly to separations at
the subject firm.
Information obtained during the reconsideration investigation
confirmed that, during the relevant period, the workers’ firm did
not shift to a foreign country the supply of services like or
directly competitive with the engineering services supplied by the
workers nor has there has been an acquisition by the subject firm
from a foreign country of like or directly competitive services;
that the subject firm did not increase services like or directly
competitive with the engineering services supplied by the workers;
and the subject firm did not increase imports of articles that were
produced directly using services supplied by the subject workers.
Conclusion
After reconsideration, I affirm the original notice of
negative determination of eligibility to apply for worker
adjustment assistance for workers and former workers of Western
Digital Technologies, Inc., Corporate Headquarters/Hard Drive
Development Division, Lake Forest, California.
Signed in Washington, D.C., on this 4th day of February, 2011
/s/ Del Min Amy Chen
_______________________________
DEL MIN AMY CHEN
Certifying Officer, Office of
Trade Adjustment Assistance
4510-FN-P
DEPARTMENT OF LABOR
Employment and Training Administration
TA-W-72,949
WESTERN DIGITAL TECHNOLOGIES, INC.
CORPORATE HEADQUARTERS/HARD DRIVE DEVELOPMENT DIVISION
LAKE FOREST, CALIFORNIA
Negative Determination Regarding Eligibility
To Apply for Worker Adjustment Assistance
In accordance with Section 223 of the Trade Act of 1974, as
amended (“Act”), 19 U.S.C. § 2273, the Department of Labor herein
presents the results of an investigation regarding certification of
eligibility to apply for worker adjustment assistance.
Workers of a firm may be eligible for worker adjustment
assistance if they satisfy the criteria of subsection (a), (c) or
(f) of Section 222 of the Act, 19 U.S.C. § 2272(a), (c), (f). For
the Department of Labor to issue a certification for workers under
Section 222(a) of the Act, 19 U.S.C. § 2272(a), the following three
criteria must be met:
I. The first criterion (set forth in Section 222(a)(1) of the
Act, 19 U.S.C. § 2282(a)(1)) requires that a significant
number or proportion of the workers in the workers’ firm must
have become totally or partially separated or be threatened
with total or partial separation.
II. The second criterion (set forth in Section 222(a)(2) of the
Act, 19 U.S.C. § 2272(a)(2)) may be satisfied in one of two
ways:
(A) Increased Imports Path:
(i) sales or production, or both, at the workers’ firm must
have decreased absolutely, AND
(ii) (I) imports of articles or services like or directly
competitive with articles or services produced or
supplied by the workers’ firm have increased, OR
(II)(aa) imports of articles like or directly
competitive with articles into which the component
part produced by the workers’ firm was directly
incorporated have increased; OR
(II)(bb) imports of articles like or directly
competitive with articles which are produced
directly using the services supplied by the
workers’ firm have increased; OR
(III) imports of articles directly incorporating
component parts not produced in the U.S. that are
like or directly competitive with the article into
which the component part produced by the workers’
firm was directly incorporated have increased.
(B) Shift in Production or Supply Path:
(i)(I) there has been a shift by the workers’ firm to a
foreign country in the production of articles or supply
of services like or directly competitive with those
produced/supplied by the workers’ firm; OR
(i)(II) there has been an acquisition from a foreign country
by the workers’ firm of articles/services that are like
or directly competitive with those produced/supplied by
the workers’ firm.
III. The third criterion requires that the increase in imports or
shift/acquisition must have contributed importantly to the
workers’ separation or threat of separation. See Sections
222(a)(2)(A)(iii) and 222(a)(2)(B)(ii) of the Act, 19 U.S.C.
§§ 2272(a)(2)(A)(iii), 2272(a)(2)(B)(ii).
Section 222(d) of the Act, 19 U.S.C. § 2272(d), defines the
terms “Supplier” and “Downstream Producer.” For the Department to
issue a secondary worker certification under Section 222(c) of the
Act, 19 U.S.C. § 2272(c), to workers of a Supplier or a Downstream
Producer, the following criteria must be met:
(1) a significant number or proportion of the workers in the
workers’ firm or an appropriate subdivision of the firm
have become totally or partially separated, or are
threatened to become totally or partially separated;
(2) the workers’ firm is a Supplier or Downstream Producer to
a firm that employed a group of workers who received a
certification of eligibility under Section 222(a) of the
Act, 19 U.S.C. § 2272(a), and such supply or production
is related to the article or service that was the basis
for such certification; and
(3) either
(A) the workers’ firm is a supplier and the component parts
it supplied to the firm described in paragraph (2)
accounted for at least 20 percent of the production or
sales of the workers’ firm; or
(B) a loss of business by the workers’ firm with the firm
described in paragraph (2) contributed importantly to the
workers’ separation or threat of separation.
Workers of a firm may also be considered eligible if they
are publicly identified by name by the International Trade
Commission as a member of a domestic industry in an investigation
resulting in a category of determination that is listed in
Section 222(f) of the Act, 19 U.S.C. § 2272(f).
The group eligibility requirements for workers of a firm under
Section 222(f) of the Act, 19 U.S.C. § 2272(f), can be satisfied if
the following criteria are met:
(1) the workers’ firm is publicly identified by name by the
International Trade Commission as a member of a domestic
industry in an investigation resulting in--
(A) an affirmative determination of serious injury or
threat thereof under section 202(b)(1);
(B) an affirmative determination of market disruption
or threat thereof under section 421(b)(1); or
(C) an affirmative final determination of material
injury or threat thereof under section 705(b)(1)(A)
or 735(b)(1)(A) of the Tariff Act of 1930 (19
U.S.C. 1671d(b)(1)(A) and 1673d(b)(1)(A));
(2) the petition is filed during the 1-year period beginning
on the date on which--
(A) a summary of the report submitted to the President
by the International Trade Commission under section
202(f)(1) with respect to the affirmative
determination described in paragraph (1)(A) is
published in the Federal Register under section
202(f)(3); or
(B) notice of an affirmative determination described in
subparagraph (1) is published in the Federal
Register; and
(3) the workers have become totally or partially
separated from the workers’ firm within--
(A) the 1-year period described in paragraph (2); or
(B) notwithstanding section 223(b)(1), the 1-year
period preceding the 1-year period described in
paragraph (2).
The investigation was initiated in response to a petition
filed on November 25, 2009 on behalf of workers of Western Digital
Technologies, Inc., Corporate Headquarters/Hard Drive Development
Division, Lake Forest, California. The workers are engaged in
activities related to the supply of engineering services. The Lake
Forest, California corporate headquarters of Western Digital
Technologies house the Hard Drive Development (HDD) function and
supporting departments. Workers in the HDD division are
responsible for design and development of digital storage devices.
The petitioners alleged that worker separations are
attributable to the firm using workers brought to the United States
from a foreign country. The investigation included analysis of
data provided by a company official.
With respect to Section 222(a) of the Act, the investigation
revealed that Criterion II has not been met because there have
not been increased imports of articles produced or services
supplied by the workers’ firm and there has not been a shift to a
foreign country in the production of articles or the supply of
services by the firm.
With respect to Section 222(c) of the Act, the investigation
revealed that Criterion (2) has not been met because Western
Digital Technologies is not a Supplier or Downstream Producer to a
firm that employed a TAA-certified worker group.
Finally, the group eligibility requirements under Section
222(f) of the Act, 19 U.S.C. § 2272(f), have not been satisfied
because Western Digital has not been publicly identified in an
affirmative finding of injury by the International Trade
Commission.
Conclusion
After careful review of the facts obtained in the
investigation, I determine that workers of Western Digital
Technologies, Inc., Corporate Headquarters/Hard Drive Development
Division, Lake Forest, California, who are engaged in activities
related to engineering services, are denied eligibility to apply
for adjustment assistance under Section 223 of the Act, 19 U.S.C. §
2273.
Signed in Washington, D.C., this 5th day of August, 2010
/s/Michael W. Jaffe
______________________________
MICHAEL W. JAFFE
Certifying Officer, Office of
Trade Adjustment Assistance
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