BMC Software, Inc., Houston, TX; Notice of Negative Determination Regarding Application for Reconsideration

By application of February 9, 2004, 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 BMC Software, Inc., Houston, Texas was signed on January 20, 2004, and published in the Federal Register on March 12, 2004 (69 FR 11888).

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 misinterpretation of facts or of the law justified reconsideration of the decision.

The TAA petition was filed on behalf of workers at BMC Software, Inc., Houston, Texas engaged in design and development of software. 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. As proof, the petitioner submitted three URL locations of the BMC Web site which contain references to BMC products and product lines. The petitioner emphasizes that because the Web site uses the word “product” in regards to BMC software, the Department should consider workers of BMC Software, Inc. as production workers.

A company official was contacted for clarification in regard to the nature of the work performed at the subject facility. The official stated that workers of BMC Software, Inc., Houston, Texas are software developers. The official further clarified that software developed at the subject firm is not mass-produced on media devices and is not sold off-the-shelf. The developers mostly customize software for individual users and provide services to support the software. The company official further stated that due to significant restructuring actions to reduce ongoing operational expenses, BMC Software, Inc. implemented large reduction of worldwide workforce, which included some of the workers of the subject firm.

The sophistication of the work involved is not an issue in ascertaining whether the petitioning workers are eligible for trade adjustment assistance, but rather only whether they produced an article within the meaning of section 222 of the Trade Act of 1974.

Software design and developing are not considered production of an article within the meaning of section 222 of the Trade Act. Petitioning workers do not produce an “article” within the meaning of the Trade Act of 1974. Formatted electronic software and codes are not tangible commodities, that is, marketable products, and they are not listed on the Harmonized Tariff Schedule of the United States (HTS), as classified by the United States International Trade Commission (USITC), Office of Tariff Affairs and Trade Agreements, which describes articles imported to the United States.

To be listed in the HTS, an article would be subject to a duty on the tariff schedule and have a value that makes it marketable, fungible and interchangeable for commercial purposes. Although 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 products that customs officials inspect and that the TAA program was generally designed to address.

The petitioner also alleges that imports impacted layoffs, asserting that because workers lost their jobs due to a transfer of job functions overseas, petitioning workers should be considered import impacted.

The petitioning worker group is not considered to have been engaged in production, thus any foreign transfer of their job duties is irrelevant within the context of eligibility for trade adjustment assistance.

Only in very limited instances are service workers certified for TAA, namely the worker separations must be caused by a reduced demand for their services from a parent or controlling firm or subdivision whose workers produce an article and who are currently under certification for TAA. The investigation revealed no such affiliations. -

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.