Lawsuit Seeks Govt Benefits For Laid-Off Software Workers
By PETER
LOFTUS
Of DOW JONES NEWSWIRES
NEW YORK -- Laid-off
software workers have filed a lawsuit accusing
the U.S. Department of Labor
of illegally denying them federal
job-training benefits.
The suit,
which seeks class-action status, was filed Jan. 2 in the
U.S. Court of
International Trade in New York, said Michael G. Smith,
attorney for the
plaintiffs. The suit wants a judge to order the Labor
Department to make
laid-off software workers eligible for weekly cash
payments and other
benefits under the Trade Adjustment Assistance
program.
In recent
years, U.S. companies have laid off thousands of software
workers and other
high-technology employees. At the same time,
companies are adding tech staff
in India and other developing
countries where labor is inexpensive, in what's
known as "offshore
outsourcing." Companies say the shift overseas saves
money.
Some displaced American workers have turned to the Trade
Adjustment
Assistance program for help. Begun in the 1960's, TAA was designed
to
soften the blow to U.S. workers of increased imports or transfers
of
jobs overseas. Traditionally, workers in manufacturing have
been
eligible for the benefits, which include vouchers for
job-training
classes and cash payments after regular unemployment
compensation runs
out.
But over the past two years, the Labor
Department has ruled many
software workers ineligible for TAA benefits. The
Labor Department has
said software and information-technology services don't
qualify as
products, or "articles," under TAA guidelines. Only workers who
made
more tangible products, such as clothing and furniture, can get
TAA
benefits, the department has ruled.
The lawsuit claims that about
10,000 software workers in the U.S.
should be eligible for TAA benefits, but
would be ruled ineligible
under current Labor Department practices. Those
that have been denied
benefits include former workers at International
Business Machines
Corp. (IBM), Electronic Data Systems Corp. (EDS) and Nortel
Networks
Corp. (NT) and Motorola Inc. (MOT), according to the
lawsuit.
Lead plaintiffs in the lawsuit include James Fusco, a former
software
developer at IBM who was denied TAA benefits in June; and Barbara
Lisa
Pineau, Dick Young and John Lake, former employees of
Computer
Horizons Corp. (CHRZ) who were denied benefits in January 2003.
Named
as defendants are Labor Secretary Elaine Chao and Attorney
General
John Ashcroft.
Labor Department spokeswoman Lorette Post said
the department doesn't
comment on pending litigation. Justice Department
spokesman Charles
Miller said the department wouldn't comment because it
hasn't yet
filed its response to the trade court.
According to the
lawsuit, software workers should be eligible for TAA
benefits because
software qualifies as an article under the law that
authorized
TAA.
"The Labor Department has been saying that software is not
an
article," said Smith, the plaintiffs' attorney. "They've been
saying
that software is a service. The programmers that I know -
including
myself because I worked in software development for 15 years -
we
think that kind of position doesn't comport with the true nature
of
software."
A series of federal court opinions since 1969 support
the case that
software is an article, Smith said. They have ruled that
the
transformation of a "thing" into something "new and
different"
qualifies as a production process whose workers are eligible for
TAA,
Smith said. Court opinions also have found that software transforms
a
computer into a new machine, Smith said.
Smith said there was no
evidence in the record of congressional debate
about TAA that suggests
software workers shouldn't receive benefits.
TAA was last authorized by
Congress in 2002, when it expanded the
benefits and categories of eligible
workers.
-By Peter Loftus, Dow Jones Newswires; 201-938-5267;
peter.loftus@dowjones.com
Updated
January 28, 2004 3:51 p.m.