Strikes and lockouts in Trade Adjustment Assistance

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                  TAA
               ADVISORY SYSTEM                             CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                         OTAA
             Washington, D.C. 20210                        DATE
                                                           December 22, 2016


ADVISORY:         TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 12-16

TO:               STATE WORKFORCE AGENCIES
                  STATE WORKFORCE LIAISONS
                  AFFILIATE AMERICAN JOB CENTER MANAGERS
                  COMPREHENSIVE AMERICAN JOB CENTER MANAGERS
                  STATE WORKFORCE ADMINISTRATORS
                  STATE AND LOCAL WORKFORCE BOARD CHAIRS AND DIRECTORS
                  STATE LABOR COMMISSIONERS
                  TRADE ADJUSTMENT ASSISTANCE LEADS

FROM:             PORTIA WU /s/
                  Assistant Secretary


SUBJECT:          Questions and Answers on the Effects of Strikes and Lockouts on Eligibility for
                  Trade Adjustment Assistance (TAA) and Trade Readjustment Allowance
                  (TRA)

1. Purpose. To assist State Workforce Agencies (SWAs) or agencies designated by Governors
   as “Cooperating State Agencies” (CSAs) (also jointly referred to as “states”) in administering
   the TAA Program by providing guidance on the effects of strikes and lockouts on eligibility
   for TAA Program benefits, including TRA.

2. References.
    Chapter 2 of Title II of the Trade Act of 1974, as amended (Pub. L. 93-618) (1974 Act
      and, as amended, Trade Act);
    Trade Adjustment Assistance Reauthorization Act of 2015 (TAARA 2015), Title IV of
      the Trade Preferences Act of 2015, (P.L. No. 114-27);
    Federal Unemployment Tax Act (FUTA) Section 3304 (26 U.S.C. 3304 (2012));
    20 Code of Federal Regulations (CFR) Part 617;
    Unemployment Insurance Program Letter (UIPL) No. 17-87 Questions and Answers on
      the Effects of Strikes and Lockouts on Eligibility for Trade Readjustment Allowances
      dated May 20, 1987.

3. Background. The Employment and Training Administration (ETA) is updating guidance on
   the effects of labor disputes on TAA Program benefits, and particularly the effects on TRA
   eligibility, after receiving a number of inquiries from states. While answers were provided in
   UIPL No. 17-87, this directive consolidates the questions asked, rescinds UIPL No. 17-87,
   and provides further guidance. This guidance includes a new statement that an individual

 RESCISSIONS                                              EXPIRATION DATE
 UIPL No. 17-87                                           Continuing


   experiencing a lockout can be an adversely affected worker who, if otherwise eligible, may
   be eligible to receive TAA benefits, including TRA.

   The Trade Act of 1974 (Pub. L. No. 93-618), as amended (codified at 19 U.S.C. §§ 2271 et
   seq.), Title II, Chapter 2, established the Trade Adjustment Assistance for Workers (TAA),
   Alternative Trade Adjustment Assistance (ATAA), and Reemployment Trade Adjustment
   Assistance (RTAA) programs. These programs collectively referred to as the TAA Program,
   provide assistance to workers who have been adversely affected by foreign trade. The Trade
   Act was last amended by the Trade Adjustment Assistance Reauthorization Act of 2015
   (TAARA 2015).

   To obtain TAA Program reemployment services and benefits, a worker must first be part of a
   group of workers that is the subject of a petition filed with and certified by the U.S.
   Department of Labor. After a worker group certification is issued, each worker in the group
   must then individually apply for services and benefits through their local American Job
   Center (sometimes known locally as One-Stop Centers or by other names). The CSA will
   issue a determination of the workers’ individual eligibility for TAA Program benefits.

4. Questions and Answers.

      Sub-Section 1: Lockouts

      1)      Q. May a worker establish individual eligibility for TAA Program benefits based
              on a separation which is due to a lockout?

              A. Yes. To qualify for TRA, or other TAA Program benefits, the Trade Act
              requires that a worker meet the definition of “adversely affected worker.” Section
              247(2) of the Trade Act (19 U.S.C. §2319 (2)) defines “adversely affected
              worker” as “an individual who, because of lack of work in adversely affected
              employment, has been totally or partially separated from such employment.” A
              “total separation” is defined in Section 247(10) (19 U.S.C. § 2319 (10)) as “the
              layoff or severance of an individual from employment with a firm in which
              adversely affected employment exists.” The regulations, at 20 CFR 617.3(z),
              define a layoff as “a suspension of or separation from employment by a firm for
              lack of work, initiated by the employer, and expected to be for a definite or
              indefinite period of not less than seven consecutive days.”

              The Department has determined that a separation due to a lockout, where the
              lockout is expected to be for a definite or indefinite period of not less than seven
              consecutive days, is a qualifying separation for TAA purposes and a worker may
              establish TAA Program benefit eligibility based on such separation. Whether the
              worker was separated due to the lockout or for another reason must be determined
              for each individual by the state.

      2)      Q. If state law allows Unemployment Insurance (UI) benefits to be paid to a
              worker who is locked out, can the worker be eligible to receive TRA?


      A. Yes, TRA may be paid to a worker who is locked out if all other TRA
      eligibility requirements, including the UI eligibility and the wage qualifying
      requirements, are met.

Sub-Section 2: Strikes
1)    Q. May a worker establish individual eligibility for TAA Program benefits based
      on a separation which is due to a strike?

      A. No. The Trade Act requires that a worker have a lack of work separation from
      adversely affected employment to qualify for TRA, or other TAA Program
      benefits. Since a separation due to a strike was not initiated by the employer, it is
      not a lack of work separation under the Trade Act, and, a worker may not
      establish individual TAA Program eligibility based on such a strike.

2)    Q. If a worker who was on strike for fewer than 26 weeks returns to work after
      the dispute has ended, and is told by the employer that there is no longer any work
      for him or her, can he or she establish individual TAA Program eligibility?

      A. Yes. This separation is due to lack of work and not a strike. However, all
      other requirements, including the requirement to have 26 or more weeks in
      adversely affected employment with wages of $30 or more (including qualifying
      weeks of leave or other work absences listed in Trade Act section 231(a)(2)) (19
      U.S.C. §2291(a)(2)) within the 52 week period ending with the week of
      separation, must also be met with respect to the separation.

3)    Q. If a worker who was on strike for more than 26 weeks returns to work, and is
      then laid off within two weeks because of lack of work, can he or she meet the
      wage qualifying requirements to receive TRA?

      A. No. In all cases, the worker must have 26 or more weeks in adversely affected
      employment with wages of $30 or more (including qualifying weeks of leave or
      other work absences listed in Trade Act section 231(a)(2)) (19 U.S.C.
      §2291(a)(2)) within the 52 week period ending with the week of separation to
      meet the qualifying requirements of Section 231(a)(2) of the Trade Act (19 U.S.C.
      §2291(a)(2)). Since the strike was for more than 26 weeks, it will not be possible
      for the worker to meet that requirement.

4)    Q. If a worker who is out of work because of a strike decides to enter training,
      may the training be approved for TAA purposes?

      A. Training may be approved under the Trade Act only if there is a lack of work
      separation to establish eligibility, which, as noted above, cannot be established by
      a strike. However, if the worker had established individual eligibility for TAA
      Program benefits before the strike through a previous qualifying separation, he or
      she may be approved for TAA training if the requirements of Section 236(a) of


     the Trade Act (19 U.S.C. §2296(a)) and 20 CFR 617.22 are met. Additionally,
     eligibility for basic or additional weeks of TRA may be available if all
     requirements for receipt set forth in Trade Act section 231(a) (19 U.S.C. §
     2291(a)) are met and state law allows payment of UI during a strike.

5)   Q. Is a worker, who was on leave at the time a strike occurred, individually
     eligible for TAA Program benefits if he or she does not return to work because of
     the strike?

     A. No. There is no lack of work separation to establish eligibility.

6)   Q. Where a worker receives a notice of layoff after the settlement of a strike in
     which he/she participated, what is the date of separation for purposes of the
     worker’s eligibility for TRA?

     A. The date of separation is the effective date of the notice for TRA purposes. A
     worker on strike remains in employment status and is not separated from
     employment until an actual separating action is taken by the employer. Whether a
     separating action taken by an employer is a layoff for lack of work for TAA
     purposes is a fact to be determined in each case, and this finding is necessary to
     establish that the worker is an adversely affected worker.

7)   Q. Would an individual who was receiving TRA while in TAA approved training
     be disqualified from receiving further TRA payments if, while a strike was in
     progress, the individual was offered and refused employment in an establishment
     where jobs are vacant because of the strike?

     A. No. The individual could not be denied TRA by a state on these facts without
     violating the labor standards in Section 3304(a)(5)(A) of the Federal
     Unemployment Tax Act (FUTA). This section requires that compensation not be
     denied to an otherwise eligible individual for refusing to accept new work if the
     position offered is vacant due directly to a strike, lockout, or other labor dispute.
     Denial of TRA in this situation would also be inconsistent with Section
     3304(a)(8) of the FUTA (prohibiting denial of benefits based upon lack of
     availability for work while the individual is in training approved by the State) and
     Section 236(d)(2) of the Trade Act (19 U.S.C. §2296(d)(2)) (prohibiting denial of
     benefits “because of the application to any such week in training of the provisions
     of State law or Federal unemployment insurance law relating to availability for
     work, active search for work, or refusal to accept work”) and 20 CFR §
     617.18(b)(1).

8)   Q. If a plant is permanently closed down immediately following the settlement of
     a strike, what is the date of separation for those workers who participated in the
     strike?


               A. The date of separation is the effective date of the notice the employer provided
               to the claimant that work is not available or the effective date of the plant closure.

       9)      Q. May a worker who is not participating in a strike qualify for individual TAA
               Program benefits if the worker is laid off because his/her employer supplies a firm
               involved in the strike?

               A. If the worker group of which he or she is a member has been certified as
               eligible to apply for TAA Program benefits, then a worker who is laid off because
               the firm for which his or her employer supplied workers no longer needs the
               workers due to a strike may experience a lack of work separation for which he or
               she could qualify for TAA Program benefits.

5. Action Requested. States are requested to review the above information and disseminate
   this guidance to appropriate staff. This guidance must be followed in future determinations.
   In addition, any pending determinations, including those determinations that are under
   review or appeal at any stage of the administrative or judicial process, that are impacted by
   this guidance must be remanded for reconsideration in accordance with this guidance, if
   permissible under state law.

6. Inquiries. States should direct all inquiries to the appropriate ETA Regional Office.