E8-12971. Invista, S.A.R.L., Nylon Apparel Filament Fibers Group, a Subsidiary of Koch Industries, Inc., Chattanooga, TN; Notice of Negative Determination on Remand

On March 27, 2008, the U.S. Court of International Trade (USCIT) granted the Department of Labor's motion for a second voluntary remand in Former Employees of Invista, S.A.R.L. v. U.S. Secretary of Labor, Court No. 07-00160.

On December 15, 2006, an official of Invista, S.A.R.L., Nylon Apparel Filament Fibers Group, A Subsidiary of Koch Industries, Inc., Chattanooga, Tennessee (the subject firm) filed a petition for Trade Adjustment Assistance (TAA) and Alternative Trade Adjustment Assistance (ATAA) on behalf of workers and former workers at the subject firm engaged in activity related to the production of nylon fiber. AR 1. The company official stated that the “petition is a continuation of the shift of production to Mexico as described in TA-W-55,055 that expired August 20, 2006. After the shift in production to another country * * * . all orders continued to be processed from the United States until now. The Customer Service Representatives (CSRs) losing their jobs are being replaced by CSRs located in South America who will handle orders for companies located in the United States.” AR 2.

The TAA/ATAA certification applicable TA-W-55,055 (issued August 20, 2004) was based on the Department's findings that the subject firm shifted production of three types of nylon filament to Mexico. AR 5-6.

The Department of Labor (Department) issued a negative determination regarding workers' eligibility to apply for TAA/ATAA on February 7, 2007. The determination was based on the Department's findings that, during the relevant period, the subject workers did not produce an article or support an appropriate subdivision that produced an article domestically, and, as such, cannot be adversely impacted or affected by a shift in production. AR 30-32. The Department's Notice of determination was published in the Federal Register on February 21, 2007 (72 FR 7909). AR 43.

In the request for administrative reconsideration, dated February 18, 2007, a worker at the subject firm stated that after TA-W-55,055 was filed, the subject firm ceased to produce apparel textile and began producing Performance Materials. The worker also stated that “after the petition (TA-W-55,055) expired, (the subject firm) let go the last of the apparel fibers personnel. Since I sold 100% apparel fiber, there was no reason to keep me.” AR 35. The worker further stated that “I was downsized, yet there were people in Brazil hired to do my work.” AR 36.

In a subsequent letter, the worker who filed the request for reconsideration stated that “I was informed by management on 11/14/06, that my job was being split up; part of it going to Brazil and part going to Wilmington, Delaware.” AR 37. The worker also stated that “All the apparel people were let go. This is a direct result of the textile industry going to developing countries and the loss of textile manufacturing in the U.S.” AR 38.

In a letter dated March 15, 2007, the Department stated that the request for reconsideration was being dismissed because insufficient evidence was furnished to warrant reconsideration pursuant to 29 CFR 90.18(c) and reiterated that, because the subject workers did not produce an article or support domestic production of an article during the one year period prior to the petition, the subject workers are not eligible to apply for worker adjustment assistance under the Trade Act of 1974, as amended. AR 45. The Dismissal of Application for Reconsideration was issued on March 21, 2007. AR 47. The Department's Notice of dismissal was published in the Federal Register on March 30, 2007 (72 FR 15169). AR 48.

By application dated May 11, 2007, Plaintiffs sought review by the USCIT. The complaint stated that the certification of TA-W-55,055 was based on a shift of textile machines to Mexico and that the negative determination of TA-W-60,808 was “due to the machines having been shipped to Mexico more than a year earlier. Yet my job did not officially terminate till the reorganization to rid the Chattanooga plant of ALL textile employees.”

Under the Trade Act of 1974, as amended, certification of group eligibility to apply for TAA will be issued provided that (1) a significant number or proportion of the workers of such workers' firm, or an appropriate subdivision, have been totally or partially separated or are threatened to become totally or partially separated; and (2) there has been a shift in production from the workers' firm or subdivision to an eligible foreign country of articles like or directly competitive with those produced by the subject firm or subdivision under section 222(a)(2)(B)(i); and, either the foreign country is a party to a free trade agreement with the United States under section 222(a)(2)(B)(ii)(I), is a beneficiary country under section 222(a)(2)(B)(ii)(II), or there has been or is likely to be an increase in imports of like or directly competitive articles. The Department interprets this standard for certification as requiring that the shift of production of an article to a foreign country must be a cause of the separations of workers of the firm that were engaged in or supported the production of that article.

After the shift of nylon filament production to Mexico in 2004, the subject firm continued to employ the subject workers to market nylon apparel filament produced in Mexico and to process orders of nylon apparel filament produced in Mexico. AR 2, 26-27, 29, 35-38, SAR 8.

Information provided by the subject firm during the remand investigation revealed that the workers' separations are not related to the shift of production of apparel nylon filament to Mexico in 2004. During the relevant period, customer service functions were performed at Invista facilities in Canada, South America, Chattanooga, Tennessee, and Wilmington Delaware. The customer service functions were consolidated to Paulinia, Brazil, and Wilmington, Delaware due to a business decision to improve the efficiency of the customer service organization. At the time of plaintiff separations the subject firm terminated other workers whose functions were unrelated to the production of apparel nylon filaments. SAR 11, 18. The separated workers were “two (2) Apparel Nylon Customer Service Representatives located at Chattanooga, one (1) Performance Materials Customer Service Representative located at Chattanooga, and one (1) Performance Materials Product Coordinator located at Chattanooga.” SAR 8. The fact that two of the four separated workers worked on a product line (Performance Materials) whose production was not shifted to Mexico confirms the company's statements that the layoffs were part of a business decision to increase efficiency in the customer service operation. This bolsters the conclusion that the plaintiff separations were not caused by the shift of production of apparel nylon filaments to Mexico over two years earlier.

That the subject workers were not threatened with separation until November 14, 2006 (more than two years after the subject firm's shift of production of nylon apparel filament to Mexico) and that the customer service representatives have been replaced by workers in Brazil and Delaware, SAR 3, 8, 11, 18, and not by workers in Mexico, support the Department's findings that the subject workers' employment with the subject firm was not dependent upon domestic production and that the subject firm's shift of nylon apparel filament production to Mexico was not a factor in the subject workers' separations.

Based on previously-submitted material and information provided during the remand investigation, the Department finds that, while the subject firm shifted its production of nylon apparel filament to Mexico, that event was not a cause of the subject workers' separations. Therefore, the Department determines that the group eligibility to apply for benefits under the Trade Act of 1974, as amended, has not been met.

Because the administrative record clearly demonstrates that the shift of production to a foreign country was not a cause to the workers' separations, the Department has not addressed the impact of the fact that no production took place at the subject firm during the twelve month period prior to filing of the petition.

In addition, in accordance with Section 246 of the Trade Act of 1974, as amended, the Department herein presents the results of its investigation regarding certification of eligibility to apply for ATAA.

In order to apply for ATAA, the subject worker group must be certified eligible to apply for TAA. Since the workers are denied eligibility to apply for TAA, they cannot be certified eligible to apply for ATAA.

Conclusion

After careful review of the findings of the remand investigation, I affirm the notice of negative determination of eligibility to apply for worker adjustment assistance for workers and former workers of Invista, S.A.R.L, Nylon Apparel Filament Fibers Group, A Subsidiary of Koch Industries, Inc., Chattanooga, Tennessee.

Signed at Washington, DC this 2nd day of June 2008.

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.