Outsourced IBM Workers To Get Unemployment Benefits - InformationWeek

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Outsourced IBM Workers To Get Unemployment Benefits

The Department of Labor has ruled that former IBM staffers can seek benefits under the Trade Adjustment Act. In the past, IT workers were shut out from claiming TAA benefits.

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."

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