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Today is February 15, 2004 |
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January
22, 2004
Lawsuit may bring extended benefits for unemployed tech
workersWashTech News
By Jeff Nachtigal
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| Photo
by Jeff Nachtigal |
| Lisa
Pineau and her family. |
Lisa
Pineau lost her position as a mainframe computer programmer when her
company outsourced her job to Canada in October of 2002. Nine months
later her Texas state unemployment benefits ran out, so she applied
for certification for eligibility for extended federal benefits
under the Trade Adjustment Assistance Reform Act (TAA). She was
denied.
The federal Trade Adjustment Assistance program
extends unemployment compensation for up to two years and offers
training, job search, and health insurance coverage assistance to
U.S. workers whose jobs have been outsourced to foreign competition,
within specific guidelines.
But the ambiguity of those
guidelines has left unemployed IT workers like Pineau frustrated
with their inability to access a support system that would appear to
be set up precisely for them.
With very few exceptions, IT
workers have been denied certification for eligibility for TAA
benefits. The U.S. Department of Labor doesn’t consider the software
created by programmers to be an “article,” or tangible item, within
the narrow guidelines of the Act.
Pineau is one of 16 named
plaintiffs in a class action
suit filed January 2, 2004 in the U.S. Court of International
Trade that seeks to make software programmers whose jobs were
outsourced eligible for TAA benefits.
“When they came up with
NAFTA,” said Pineau, 46, who worked for Computer Horizons in Irving,
Tex., for nine years, “they said ‘we’ll train you for new jobs, help
you train for new work,’ but they’re not doing that. They keep
saying we’ll get better jobs, but there aren’t any, and we can’t
afford to get the training.”
This case is the first of its
kind to argue the specific point that software programmers should be
eligible based on the fact that they create a “tangible commodity.”
“What we’re arguing is that yes, software is an article,”
said lead attorney Michael G. Smith.
“We’re really excited,”
Smith said. “This is an issue that is ripe to be decided in favor of
the programmers. If we get the result we think we should, I think
they are terribly overdue.”
Originally developed about 40
years ago to assist U.S. manufacturing workers who lost their jobs
due to global trade expansion, the TAA
pays benefits to workers whose jobs were outsourced to countries
that have free trade agreements with the U.S. In 2002 the Act was
amended to cover all foreign competition – opening the door to
software engineers whose jobs were sent to any foreign country,
including India.
The case
The United States Court
of International Trade determines whether workers are eligible for
TAA benefits by establishing whether the firm where the employees
work “create or manufacture a tangible commodity, or transform it
into a new and different article.”
“The reason they were
getting turned down is that the Department of Labor has been saying
that these computer programmers do not produce an article,” said
Smith, who before becoming a patent attorney spent 15 years as a
programmer.
Smith believes the case is a strong one, based
upon multiple rulings called the “new machine doctrine” in the Court
of Appeals for the Federal Circuit. The rulings hold that by
installing new software on a computer, it transforms the computer
into a “new machine.”
By extension, software should be ruled
an article, Smith says.
That point is critical to the case,
because under TAA guidelines unemployed workers are eligible only if
they created an article such as a new machine.
In many cases
the Labor Department has ruled that software is a service, rather
than an article that was produced.
The idea that software is
a service is, “totally bogus,” according to Smith.
Smith
says several software programmer groups have been granted TAA
benefits by the Labor Department, including a group of Nintendo
employees in Washington State. The rulings appear to contradict the
department’s stance, he says, since there is little difference
between a programmer who makes computer games and one that works on
mainframe computers.
Smith said there should be a clear
ruling on the TAA for all IT workers.
Class
members
With the number of U.S. workers involved in creating
software, Smith says he believes the number of class members could
easily reach into the thousands.
"Eligible class members
include all software coders whose jobs were offshored to foreign
nations, according to Smith.
"There are no restrictions on
which nation the work is transferred to, as long is the work is
transferred outside the U.S.," Smith said.
A key piece of
language was added to the TAA Reform
Act of 2002 that opened the door to make nearly all software
developers whose jobs were outsourced to foreign countries eligible
for TAA benefits. Previously, only workers whose jobs were sent to
countries party to free trade trade agreements with the U.S. were
eligible.
A favorable ruling would give a much needed-assist
to IT workers hard-hit by outsourcing. It could also mean
substantial retroactive payment of benefits to class members. The
class does not, include managers or tech support personnel, such as
a telephone tech support personnel. It also doesn’t include workers
whose work was transferred to a worker in the U.S on a H-1B visa or
a L-1 visa.
Smith estimated that one unemployed
software programmer in California who was eligible for all the
benefits – including unemployment compensation ($52,000), retraining
benefits ($10,000), job search expenses and relocation expenses
($1,250 for each), and the 65 percent tax credit for health care
expenses – could be due an amount of more than $40,000 under the
TAA.
Judge Richard W. Goldberg of the U.S. Court of
International Trade is slated to preside over the case. An initial
ruling is expected by June, but Smith expects this case to extend
through an appeals process in the Court of Appeals for the Federal
Circuit, and perhaps even to the U.S. Supreme Court before a final
decision is made.
Class action plaintiff Jim Fusco of East
Brunswick, N.J. worked for AT&T for 13 years before his job was
outsourced to IBM. Fusco, now 50, transferred to IBM, but now IBM is
outsourcing his job to India.
He was turned down for TAA
benefits, but returned to school anyway for Web development
training. Recently he found another job.
“The work I’m doing
is not really related to what I did at IBM,” Fusco says. “But I feel
fortunate to have it, or I would still be living off my savings. My
motivation is to make a point that tech workers are entitled to same
protections as any other workers.”
Jack Lake, 58, hasn’t been
able to find a job since Computer Horizons outsourced his job. His
unemployment compensation has run out, and he says he will have to
live on his savings or his 401k plan.
“I’d love to take Web
design and Java programming, but that’s expensive,” said Lake, who
has 33 years of programming experience. “I need my money to pay my
taxes. I know that if you can get on your resume anything with
Internet, you have a lot better shot at a job.”
In Irving,
Texas, the job market for computer programmers is so bad that
18-year veteran programmer Pineau and her husband are considering
getting out of high-tech for good and buying a fast food franchise.
“It would be nice if we got money,” Pineau said, “but that’s
not really why I’m doing this. It’s more the principle of the thing,
and to really get publicity towards the whole offshoring
issue.”
---
Sidebar: Smith sponsors TAA benefits
bill
Congressman Adam Smith, (D-Wash) and Congressman
Charles B. Rangel (D-New York) are co-sponsoring a bill to extend
TAA benefits to all workers and software engineers in the IT
industry who are laid off due to outsourcing to anywhere in the
world, including jobs offshored to India. Funding sources for the
bill are still in the planning stages, according to Lars Anderson,
Rep. Smith’s Director of Communications. Anderson said he expects
the bill to be submitted to the House by February 1 of this
year.
Smith, who represents a Seattle district with many
high-tech workers, also pushed for the General Accounting Office to
study the impact offshore outsourcing the U.S. economy. The findings
from that study are due for release in March or April 2004.
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