Mellon Bank, N.A., Pittsburgh, PA; Notice of Negative Determination on Reconsideration on Remand
The United States Court of International Trade (USCIT) granted the Secretary of Labor's motion for a voluntary remand for further investigation in Former Employees of Mellon Bank, N.A. v. Elaine Chao, U.S. Secretary of Labor, No. 03-00374.
The Department's initial negative determination for the workers of Mellon Bank, N.A. (hereafter “Mellon Bank”) was issued on April 14, 2003, and published in the Federal Register on May 1, 2003 (68 FR 23322). The determination was based on the finding that workers did not produce an article within the meaning of section 222 of the Trade Act of 1974. The Department determined that the subject worker group were not engaged in the production of an article, but engaged in activities related to computer technology services.
By letter to the U.S. Court of International Trade, filed on June 13, 2003, the petitioner requested administrative reconsideration. The petitioner asserted that the workers produced a product through development and creation of software and, therefore, were not service providers.
On remand, the Department conducted an investigation to determine whether the petitioners were production workers and, if so, whether the workers were eligible to apply for TAA. The remand investigation consisted of independent research and analysis of software as a commodity and requesting additional information from the petitioner and the company regarding the functions of the subject worker group and the operations of the subject company.
The remand investigation revealed that Mellon Bank provides financial services for corporations, institutions and wealthy individuals. These services include asset management, trust and custody securities lending, foreignexchange, annuities, private wealth management, private banking, cash management, and credit and capital market services. In addition, it was determined that neither Mellon Bank nor the petitioning workers produce an “article” within the meaning of the Trade Act of 1974.
The remand investigation also revealed that the petitioning workers designed and developed computer software applications that allow the subject company to provide financial services to its customers, such as software that were custom-designed to fit end-users' needs and produced reports that are electronically transmitted to the customer. These applications are not sold as manufactured products to the general public or sold as a component to an article that is available to the general public.
While the Department considers workers who are engaged in the mass copying of software and manufacturing of the medium upon which the software is stored, such as compact disks and floppy disks, to be production workers, the Department does not consider the design and development of the software itself to be production and, therefore, does not consider software designers and developers to be production workers.
The U.S. Customs Service does not regard software design and development as a tangible commodity and determines the value of software based only on the cost of the carrier media, such as compact discs, floppy disks, records, and tapes. Further, computer software is not listed on the Harmonized Tariff Schedule of the United States (HTS), a code that represents an international standard maintained by most industrialized countries as established by the International Convention on the Harmonized Commodity Description and Coding.
Throughout the Trade Act, an article is often referenced as something that can be subject to a duty. To be subject to a duty on a tariff schedule, an article will have a value that makes it marketable, fungible and interchangeable for commercial purposes. While a wide variety of tangible products are described as articles and characterized as dutiable in the HTS, informational products that could historically be sent in letter form and that can currently be electronically transmitted are not listed in the HTS. Such products are not the type of employment work products that customs officials inspect and that the TAA program was generally designed to address.
After reconsideration on remand, I affirm the original notice of negative determination of eligibility to apply for adjustment assistance for workers and former workers of Mellon Bank, N.A., Pittsburgh, Pennsylvania.Signed at Washington, DC, this 6th day of January, 2004. Linda G. Poole, Certifying Officer, Division of Trade Adjustment Assistance.