Accenture LLP, Oaks, PA; Notice of Negative Determination Regarding Application for Reconsideration

By application of March 15, 2004, petitioners 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 Accenture LLP, Oaks, Pennsylvania, was signed on February 13, 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 Accenture LLP, Oaks, Pennsylvania engaged in maintenance and development of software code. 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. The petitioner further compares software programs developed under the auspices of Accenture to Microsoft software packages and computer games which are packaged and sold as “products”. Consequently, the petitioner concludes that software developed by the subject group of workers should be considered a product as well.

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 at the subject firm are engaged in application development and maintenance services of a trust accounting software to a customer, which in its turn provides investment processing services for financial institutions. Accenture workers perform application fault fixes, enhancements and modifications. The official further clarified that software developed by the subject group of workers is not recorded on media devices for further distribution. All Accenture activities are performed on the application code residing on customer's mainframe and transferred electronically.

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 development and maintenance 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 databases 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 Department does acknowledge software as a product in cases when the software is recorded and marketed on a physical media device, in which case the process of recording (burning) is considered a production and the physical media device a product.

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

The company official stated that Accenture LLP did transfer a number of junior level Programmer-Analyst positions to Philippines during the relevant time period. However, none of these positions involve any sort of production. The Philippine team of analysts is performing programming activities by remotely accessing mainframe system, which is located in Oaks, Pennsylvania and making changes directly to the software on that system. Informational material that is electronically transmitted is not considered production within the context of TAA eligibility requirements, so there are no imports of products in this instance. Further, as the edited material does not become a product until it is recorded on media device, there was no shift in production of an “article” within the meaning of the Trade Act of 1974.

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.