TELECOM Digest OnLine - Sorted: Outsourced IBM Workers Will Get Unemployment Benefits

Outsourced IBM Workers Will Get Unemployment Benefits

Paul McDougall (
Thu, 18 May 2006 15:32:25 -0500

By Paul McDougall

The federal government says a former IBM programmer whose job in New
Jersey was outsourced to Canada is eligible to apply for the same
employment benefits typically extended to manufacturing workers who
lose their jobs to lower-cost offshore competition.

Under a ruling handed down by the Department of Labor, the former IBM
staffer-who helped develop billing software for businesses-can seek
benefits under the Trade Adjustment Act. The Act provides for extended
unemployment payments, federally funded retraining, and relocation
allowances for workers hit by foreign competition. In the past, IT
workers have been shut out from claiming TAA benefits.

In a written ruling dated May 11, DOL official Elliot Kushner noted
that "a shift in production of software like, or directly competitive
to, that produced at the subject facilities to Canada contributed to
the total or partial separation of a significant number or proportion
of workers at the subject [IBM] facilities" in New Jersey.

The former IBM worker, James Fusco, took the DOL to trade court after
he was initially denied TAA benefits. The DOL's May 11 ruling in favor
of Fusco applies to all workers at IBM centers in Piscataway, New
Jersey and Middletown, New Jersey whose jobs were outsourced after
November 13, 2001. It was not immediately clear how many IBM workers
that would affect.

The ruling comes on the heels of similar decisions recently handed
down by the DOL that granted TAA status to former tech workers at
Computer Sciences Corp. and Land's End. Those decisions came after the
U.S. Court of International Trade ordered the DOL to review a policy
under which it declined to grant TAA status to programmers because
they do not produce a tangible good. The trade court characterized the
DOL's previous thinking on the issue as "arbitrary and capricious."

Copyright 2006 CMP Media LLC.

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