Former Employees of Kleinerts, Inc. v. Herman

74 F. Supp. 2d 1280, 23 Ct. Int'l Trade 647, 23 C.I.T. 647, 1999 Ct. Intl. Trade LEXIS 104
CourtUnited States Court of International Trade
DecidedSeptember 14, 1999
DocketSlip Op. 99-96; Court 98-05-01438
StatusPublished
Cited by16 cases

This text of 74 F. Supp. 2d 1280 (Former Employees of Kleinerts, Inc. v. Herman) is published on Counsel Stack Legal Research, covering United States Court of International Trade primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Former Employees of Kleinerts, Inc. v. Herman, 74 F. Supp. 2d 1280, 23 Ct. Int'l Trade 647, 23 C.I.T. 647, 1999 Ct. Intl. Trade LEXIS 104 (cit 1999).

Opinion

OPINION

POGUE, Judge.

This matter is before the Court on Former Employees of Kleinerts, Inc.’s (“Plaintiffs”) motion for judgment on the agency record pursuant to USCIT Rule 56.1. Plaintiffs challenge the Secretary of Labor’s (“Labor”) remand determination that Plaintiffs are not eligible for certification for trade adjustment assistance because increased imports did not contribute importantly to the workers’ separation from employment within the meaning of Section 222 of the Trade Act of 1974. See 19 U.S.C. § 2272(a)(3)(1994). This Court has jurisdiction pursuant to 19 U.S.C. § 2395(c)(1994) and 28 U.S.C. § 1581(d)(l)(1994).

Background

The purpose of the trade adjustment assistance program, is “to offer unemployment compensation, training, job search and relocation allowances, and other employment services to workers who lose their jobs because of import competition.” Former Employees of Parallel Corp. v. United States Secretary of Labor, 14 CIT 114, 118, 731 F.Supp. 524, 527 (1990).

In order to certify a group of workers as eligible to apply for trade adjustment assistance, Labor must determine:

(1) that a significant number or proportion of the workers in such 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) that sales or production, or both, of such firm or subdivision have decreased absolutely, and
(3) that increases of imports of articles like or directly competitive with articles produced by such workers’ firm or an appropriate subdivision thereof contributed importantly to such total or partial separation, or threat thereof, and to such decline in sales or production.

19 U.S.C. § 2272(a).

In order to receive trade adjustment assistance benefits, Plaintiffs must satisfy all three requirements of 19 U.S.C. § 2272(a). See, e.g., Former Employees of Bass Enterprises Prod. Co. v. United States, 13 CIT 68, 70, 706 F.Supp. 897, 900 (1989); Abbott v. Donovan, 8 CIT 237, 239, 596 F.Supp. 472, 474 (1984).

On February 6, 1998, Kleinerts Inc. of Alabama (“Kleinerts”), a garment manufacturing company, closed its plant in Greenville, Alabama. As a result of the closing, Kleinerts terminated the Plaintiffs’ employment. See Petition Screening and Verification, Conf. Rec. at 2. In anticipa *1283 tion of the closing of the Greenville plant, Plaintiffs, pursuant to 19 U.S.C. § 2271(a) (1994), filed a petition for certification of eligibility to apply for adjustment assistance on January 81, 1998. In their petition, Plaintiffs described the products manufactured at Greenville as “T-shirts” and “sweatshirts.” 1 See Petition for Trade Adjustment Assistance, Jan. 31, 1998, Conf. Rec. at 1.

In response to the petition, Labor began an investigation of whether Plaintiffs were eligible to apply for adjustment assistance. On February 17, 1998, Labor sent a questionnaire to Bud Daniels, Director of Personnel at Kleinerts, inquiring: (1) about the organizational structure of Kleinerts Inc. and its Greenville plant; (2) about the company’s sales, production, and employment; (3) about the company’s imports; (4) whether the company transferred production to an offshore location; and (5) about its existing primary customers. See Feb. 17, 1998, Fax from Kleinerts, Conf. Rec. at 7-8.

In response, Mr. Daniels asserted that “Greenville is a satellite sewing plant of Kleinerts Inc. of Alabama[, which] is a wholly owned subsidiary of Kleinerts Inc.” Id. at 7. In addition, Mr. Daniels identified the main products manufactured by the Greenville plant as “T-shirts” and “fleece tops.” See id. Mr. Daniels further reported that neither Kleinerts nor its affiliates imported products competitive with those produced at the Greenville plant. See id. Mr. Daniels also noted that the Greenville plant layoffs occurred as a result of transferring production to the company’s Elba, Alabama, facility, not to an offshore location. See id. at 8. Finally, Mr. Daniels indicated that the Greenville plant had one primary “declining” customer (“Primary Customer”), and that Primary Customer only purchased T-shirts from the Greenville facility. 2 See id.

In addition, Labor, in accord with its general practice, surveyed the Greenville plant’s customers to determine whether the “contributed importantly” test was satisfied. On February 24, 1998, Labor sent a letter to the human resources department of Primary Customer, requesting that it report the total quantities of its domestic and foreign purchases of T-shirts similar to or like those produced by the Greenville plant. See Feb. 24, 1998, Letter from Labor, Conf. Rec. at 11. In response, Primary Customer asserted that it did not purchase imports and that its contract with Kleinerts ended because Kleinerts elected to discontinue the business relationship. See Mar. 12, 1998, Fax from Primary Customer, Conf. Rec. at 14.

Based on the information obtained from Kleinerts and Primary Customer, Labor concluded on March 19, 1998, that the reasons for Plaintiffs’ dislocation from Kleinerts’ Greenville plant did not satisfy the third requirement of the statutory test for group eligibility: that imports contribute importantly to the workers’ separation. See Negative Determ. Regarding Eligibility, Mar. 19, 1998, Conf. Rec. at 18-19. Accordingly, Labor denied Plaintiffs’ petition for trade adjustment assistance. See id.

On March 27, 1998, Plaintiffs requested reconsideration of Labor’s negative determination. See Mar. 27, 1998, Letter from Plaintiffs, Conf. Rec. at 24. Plaintiffs’ request reiterated that the Greenville plant produced fleece tops in addition to T-shirts. See id. Moreover, Plaintiffs alleged that Kleinerts transferred equipment from the Greenville plant to Honduras for the purpose of shifting fleece top production to Honduras. See id.

On April 15, 1998, Labor adhered to its denial of Plaintiffs’ petition based on the following findings: (1) that Primary Customer reported no imports of T-shirts like *1284 those produced by the Greenville plant in 1996 and 1997, and (2) that the shift of machines from Greenville, Alabama, to Honduras did not form a basis for worker group certification. See

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74 F. Supp. 2d 1280, 23 Ct. Int'l Trade 647, 23 C.I.T. 647, 1999 Ct. Intl. Trade LEXIS 104, Counsel Stack Legal Research, https://law.counselstack.com/opinion/former-employees-of-kleinerts-inc-v-herman-cit-1999.