03-20101. Cypress Semiconductor Design Center, Colorado Springs, CO; Notice of Negative Determination Regarding Application for Reconsideration

By application of July 9, 2003, a petitioner requested administrative reconsideration of the Department's negative determination regarding eligibility for workers and former workers of the subject firm to apply for Trade Adjustment Assistance (TAA). The denial notice applicable to workers of Cypress Semiconductor Design Center, Colorado Springs, Colorado was signed on June 25, 2003, and published in the Federal Register on July 10, 2003 (68 FR 41179).

Pursuant to 29 CFR 90.18(c) reconsideration may be granted under the following circumstances:

(1) If it appears on the basis of facts not previously considered that the determination complained of was erroneous;

(2) If it appears that the determination complained of was based on a mistake in the determination of facts not previously considered; or

(3) If in the opinion of the Certifying Officer, a mis-interpretation of facts or of the law justified reconsideration of the decision.

The TAA petition was filed on behalf of workers at Cypress Semiconductor Design Center, Colorado Springs, Colorado. Subject firm workers performed computer programming related to integrated circuit test development of products manufactured abroad. The petition was denied because the petitioning workers did not produce an article within the meaning of Section 222 of the Act.

The petitioner contends that the Department erred in its interpretation of work performed at the subject facility as a service. He further quotes a section that he describes as “DOL Strategic Goals” that imply that TAA is designed to help workers “displaced by shifts in production to offshore locations” and states that the shift of production to the Phillipines prompted an alleged subsequent shift of software development performed at the subject facility to the Philippines.

A company official was contacted for clarification in regard to the nature of the work performed at the subject facility. The official clarified that the majority of the software was developed to be installed in test equipment at the Colorado facility or to be shipped to be installed in test equipment at other domestic facilities. A lesser portion, however, was also required to go through a “product check requirement” in conjunction with an internal contracting process that would be shipped to facilities both domestic and foreign (Philippines). This last portion of software would be further fine tuned at the facilities that received the software.

As a result of this clarification, it was revealed that the software was never marketed as an external product, nor was it a component part incorporated into production of a marketed product. There is no evidence that the company imports competitive software. Thus, even if the services performed by the petitioning worker group were considered production, there is no evidence of like or directly competitive products. The petitioner's allegation of a shift in work functions from the subject facility to the Philippines appears to stem from the transfer of a machine used to test integrated circuits for company products from Colorado Springs to the company's Philippines facility. The petitioner contends that if the machine was moved, so were the software development jobs that were responsible for designing software for the machine.

A company official who was questioned on this issue stated that, in affect, some software development was shifted to other domestic facilities, but not to the Philippines. The software previously exported by the subject firm to the Philippines is being maintained by existing staff that has always performed fine tuning on existing software. The official concluded that layoffs at the subject firm, as well as other company facilities including the one in the Philippines, are attributable to a general downturn in the semiconductor industry.

Conclusion

After review of the application and investigative findings, I conclude that there has been no error or misinterpretation of the law or of the facts which would justify reconsideration of the Department of Labor's prior decision. Accordingly, the application is denied.

Signed at Washington, DC, this 30th day of July, 2003.

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.