STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)


SANDRA J NORDQUIST, Claimant

TRADE ACT DECISION
Hearing No. 99400638AP


An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Claimant Sandra J. Nordquist ("Nordquist") worked for over 29 years for Paragon Electric Company ("Paragon"). For her last 25 years there, she was a production supervisor. Nordquist was laid off when Paragon shut down its Wisconsin manufacturing plant and moved the majority of its operation to Mexico.

Because of the circumstances in which Paragon shut down, Nordquist was potentially eligible not only for benefits under Wisconsin's Unemployment Insurance Act (Wisconsin Statutes Ch. 108), but also for benefits under the Trade Act of 1974, 19 USC § 2101 et seq., a federal law intended to ameliorate the effects on workers from foreign competition which adversely affects businesses here in the U.S. (1)

One of the potential benefits under the Trade Act is "trade readjustment allowances" (TRA), which are, like unemployment insurance benefits, weekly payments intended to partially replace lost wages. The Trade Act provides a certain number of weeks of TRA as a basic allowance; it also provides for certain additional weeks of TRA beyond the "basic TRA" entitlement. In addition, in certain cases, the Trade Act will provide payments ("training assistance allowances", or TAA) to cover expenses of training programs which the worker participates in while receiving TRA.

Trade Act assistance in the development of and payment for training programs is not an absolute entitlement; by law it can be approved and paid only if certain conditions, described in the Trade Act, are met.

The Trade Act requires that if they are to receive TRA benefits, workers must also be in an approved training program. This training requirement can be waived in certain cases while workers are receiving "basic TRA", but it cannot be waived for workers receiving "additional TRA". Therefore, if a worker who has exhausted their "basic TRA" seeks to continue receiving benefits in the form of "additional TRA", but the applicable conditions do not allow approval of a training program for them, then neither TAA nor "additional TRA" benefits may be paid.

Following her layoff, Nordquist initiated a claim for unemployment insurance and Trade Act benefits. In connection with her claim, she applied for TAA. She sought approval for a training program involving a course of study at Silver Lake College in Manitowoc which would lead to an undergraduate degree in Art with Commercial Art emphasis. This program would have involved providing TAA benefits to cover the expenses of the training, and "additional TRA" payments to cover Nordquist's living expenses while participating in the training.

A determination was made that the applicable statutory conditions did not allow approval of the training program sought by Nordquist. As a result, it was determined that she was not eligible to receive "additional TRA" benefits, or TAA training benefits. Nordquist appealed this determination, and following a hearing before an administrative law judge for the Division of Unemployment Insurance, the determination was affirmed. Nordquist has now sought commission review of the denial of her request for approval of a training program

The Trade Act sets out the standards which must be met for training to be approved, in 29 USC § 2296:

19 U.S.C. § 2296. Training

(a) Approval of training; limitation on expenditures; reasonable expectation of employment; payment of costs; approved training programs; nonduplication of payments from other sources; disapproval of certain programs; exhaustion of unemployment benefits; promulgation of regulations

(1) If the Secretary determines that -

(A) there is no suitable employment (which may include technical and professional employment) available for an adversely affected worker,

(B) the worker would benefit from appropriate training,

(C) there is a reasonable expectation of employment following completion of such training,

(D) training approved by the Secretary is reasonably available to the worker from either governmental agencies or private sources (which may include area vocational education schools, as defined in section 195(2) of the Vocational Education Act of 1963, and employers)

(E) the worker is qualified to undertake and complete such training, and

(F) such training is suitable for the worker and available at a reasonable cost,

the Secretary shall approve such training for the worker. Upon such approval, the worker shall be entitled to have payment of the costs of such training (subject to the limitations imposed by this section) paid on his behalf by the Secretary directly or through a voucher system. Insofar as possible, the Secretary shall provide or assure the provision of such training on the job, which shall include related education necessary for the acquisition of skills needed for a position within a particular occupation.
. . .
(e) "Suitable employment" defined.

For purposes of this section the term "suitable employment" means, with respect to a worker, work of a substantially equal or higher skill level than the worker's past adversely affected employment, and wages for such work at not less than 80 percent of the worker's average weekly wage.

The commission finds and concludes that the request for approval of training was properly denied both because there is suitable employment available for Nordquist without the training, and because there is not a reasonable expectation of employment following completion of the training Nordquist seeks approval for.

Availability of suitable employment without the need for training - Nordquist resides in Two Rivers, in Manitowoc County. She is exceptionally well suited, both by her 25 years' experience, and by her training (a Bachelor's Degree in Business with a major in Management, awarded in 1995), to perform work in the field of production management in a manufacturing operation.

In Manitowoc County, more than 36% of all workers are engaged in manufacturing. In Sheboygan County, more than 40% of all workers are engaged in manufacturing, and in Brown County the figure is 20%. The total number of workers engaged in manufacturing, in these three counties, is in excess of 65,000. In the area comprised of Manitowoc County and other counties near it, more than 28% of all workers are engaged in manufacturing. The commission infers from this, that there are, in Nordquist's labor market, a significant number of employment opportunities in the field of production management in a manufacturing operation.

In the multi-county area encompassing Manitowoc, Kewaunee, Door, Brown, Sheboygan, and other area counties, the mean wage for a Production Supervisor is $16.50/hour. The median wage for the Production Supervisor job is $15.20/hour. 60 out of 93 workers in this job classification earn between $14 and $15.99/hour; 24 more workers in this job classification earn $16/hour or more, with 12 of them earning more than $20/hour.

For purposes of determining whether there is no suitable employment available for an adversely affected worker within the meaning of 19 U.S.C. § 2296(a)(1)(A), "suitable employment" means work of a substantially equal or higher skill level than the worker's past adversely affected employment, and wages for such work at not less than 80 percent of the worker's average weekly wage. 19 U.S.C. § 2296(e). Nordquist earned $18.75/hour when she last worked for Paragon. 80 percent of that amount is $15/hour. Both the mean and the median earnings for Production Supervisors in Nordquist's area, are greater than this.

The commission does not agree with Nordquist's argument, that there must be affirmative proof that there are specific open positions, at specific wage rates, before there can be a finding that the "no suitable work" standard is not met. First, the significant number of manufacturing workers and of well-paid Production Supervisor positions in Nordquist's area supports the inference that there will generally be some level of availability of positions of this type. More important, Nordquist's argument reverses the statutory test. The question is not, whether there is evidence showing that there are positions available. The question is, whether it has been demonstrated that there are no positions available. Nordquist is the proponent of this proposition, in that this proposition must be established in order for Nordquist to prevail. The burden of showing that a statutory exception applies is on the proponent of the exception. Chicago & Northwestern R.R. v. LIRC, 91 Wis. 2d 462, 467, 283 N.W.2d 603 (Ct. App. 1979). Even if there were not an initial burden on Nordquist to demonstrate that there are no suitable positions available, the evidence in the record which supports the contrary inference surely places on Nordquist the obligation to present some contrary evidence to rebut it. In the commission's view, her evidence has not persuasively done so.

The commission does not believe that Nordquist's citation of the evidence as to the average starting rate for production supervisors is persuasive. Nordquist is a highly experienced Production Supervisor with a recently-awarded Bachelor's Degree in Business with a major in Management. It can reasonably be expected, that she would be able to command pay rates well in excess of the rate offered to persons starting in that occupation.

The commission therefore finds and concludes that it has not been demonstrated that the condition expressed in 19 U.S.C. § 2296(a)(1)(A) - that there is no suitable employment available for Nordquist - is satisfied.

No reasonable expectation of employment following completion of the training - Nordquist's proposed training would result in her obtaining a (second) undergraduate degree, in Art, with a Commercial Art emphasis. Under 29 U.S.C. § 2296(a)(1)(C), this training can not be approved unless "there is a reasonable expectation of employment following completion of such training".

The commission has considered the evidence relied on by Nordquist, but it finds it less persuasive than the testimony and evidence provided by Maura Yost, who has over 10 years of experience as a Job Service Specialist working with information about Wisconsin's labor market. The commission finds the most persuasive evidence to be, that the occupational outlook for commercial art is low. Commercial art is a very small occupation in the state, with few jobs, and growth in the occupation is not expected to absorb the number of qualified artists.

Nordquist relies on 19 U.S.C. § 2296(a)(3), which provides that for purposes of applying paragraph 19 U.S.C. § 2296(a)(1)(C),

a reasonable expectation of employment does not require that employment opportunities for a worker be available, or offered, immediately upon the completion of training approved under this paragraph (1).

She argues that this means, that she need only meet a "lower" standard of "availability" of employment upon completion of training. The commission does not agree. The reservation in 19 U.S.C. § 2296(a)(3) merely makes it clear that employment does not have to be available immediately following completion of training for the test to be met. It does not address the question of how reasonable it is to expect the employment to be obtained eventually.

It is worthwhile to note, that there is a distinct difference between the approach of 2296(a)(1)(A), which concerns the availability of employment without the training, in an area in which the worker is already job-ready, and 2296(a)(1)(C), which concerns the availability of employment with the training, in the trained area. These two tests do involve the same degree of certainty with respect to the availability, or unavailability, of employment. Under 2296(a)(1)(A), the test is not met unless it is shown that there is no suitable employment available for the worker (without the training, in an area in which they already job-ready). Under 2296(a)(1)(C), the test is not met unless it is shown that there is a reasonable expectation of employment with the training, in the trained area.

Thus, the availability of some work is sufficient to establish that the 2296(a)(1)(A) test is not met -- because it requires a showing that no work is available.

However, the mere availability of some work is not sufficient to meet the 2296(a)(1)(C) test, because it requires more than this: it requires a reasonable expectation of employment following the training.

The evidence may show, as Nordquist argues, that there may be "some" work in her labor market in the field of commercial art. However, the commission does not believe that the evidence in the record establishes that there would be a reasonable expectation of employment for Nordquist in the commercial art area following her training.

The commission therefore finds and concludes that it has not been demonstrated that the condition expressed in 19 U.S.C. § 2296(a)(1)(C) - that there is a reasonable expectation of employment following completion of such training - is satisfied.

Conclusion -- The conditions listed in 19 U.S.C. § 2296(a)(1) are stated in the conjunctive. All must be met before training can be approved. In this case, two of the conditions are not met. The training thus cannot be approved.

The commission therefore finds that as of week 7 of 1999, the claimant's request for approval of training under the Trade Act of 1974 (as amended), 19 U.S.C. § 2296, must be denied.

DECISION

The department's determination is affirmed. Accordingly, the claimant's request for approval of training under the Trade Act of 1974 (as amended), 19 USC § 2296, is denied. The claimant is not eligible for trade readjustment allowances.

Dated and mailed October 6, 1999
nordqsa.trr : 110 :

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

James A. Rutkowski, Commissioner

MEMORANDUM OPINION

Nordquist argues that the Administrative Law Judge held that training should be denied because the employment opportunities for which Nordquist's planned training would prepare her would not be "suitable employment", and that this was error because this is not a required condition of approval of training.

The Administrative Law Judge observed that employment as a graphic designer/commercial artist would not pay Nordquist at least 80% of her previous earnings, and she stated that for this reason "the training would not amount to `suitable employment' for the worker". This, the commission agrees, seems to reflect a mis-reading of 19 U.S.C. 2296(a)(1)(A) and 2296(e). The "suitable employment" standard looks to whether "suitable employment" would be available to the worker, without the training, not to whether it will be made available by the training. The question of how much the worker can earn in the occupation they propose to be trained for, is presented more directly by 19 U.S.C. 2296(a)(1)(B), which asks whether the worker would "benefit" from appropriate training.

However, the commission believes, for the reasons discussed above, that Administrative Law Judge correctly determined that the conditions described in 19 U.S.C. 2296(a)(1)(A) and (C) were not met, because there was suitable employment available without the training, and because there was not a reasonable expectation of employment following completion of the proposed training. The conditions in 19 U.S.C. 2296(a)(1) are stated in the conjunctive: all of them must be satisfied before training can be approved. In this case, the failure of Nordquist to establish either one of these two conditions would require that her request for training be denied.

The result here is consistent with the purposes - and the limitations - of the Trade Act. Unlike the unemployment insurance system, which is funded by a direct tax on employers, the Trade Act is funded by general appropriations. The sums available for benefits under the Act, to attempt to ameliorate the effects of foreign competition on domestic workers, are thus limited. They must be used where they are most needed and where they will be most effective. Undoubtedly, there will be workers, such as Nordquist, who might benefit from certain training which will allow them to move into a new line of work, and who might be able to obtain employment in that new line of work. In enacting the Trade Act, though, congress had to balance against that possibility, the plight of displaced workers whose only existing skills were not marketable, but who could, with appropriate training, be put back to work. To focus the available training funds where they would be most useful, some limits had to be put on the training that would be funded. Expending funds to train a worker who already has marketable job skills to do a completely new type of work for which employment opportunities are low, goes beyond those limits.

For these reasons, the commission agrees with the result reached by the Administrative Law Judge.

NOTE: The commission had no disagreement with the material findings of fact of the Administrative Law Judge. It has issued its own decision in this matter in order to be able to set forth more fully the rationale on the basis of which it agreed with the result reached by the Administrative Law Judge.

cc:
Attorney Mark R. Rohrer
Attorney Gregory Frigo


[ Search UC Decisions ] - [ UC Digest - Main Index ] - [ UC Legal Resources ] - [ LIRC Home Page ]


Footnotes:

(1)( Back ) Benefits under the Trade Act are administered by the Unemployment Insurance Division of the Wisconsin Department of Workforce Development, in coordination with the Wisconsin Unemployment Insurance program.