Skip to Content

Notice

Hercules Incorporation, Aqualon Division, Parlin, NJ; Notice of Termination of Investigation

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble

On August 23, 2006, the U.S. Court of International Trade (USCIT) granted the Department of Labor's consent motion for voluntary remand in Former Employees of Hercules Incorporation v. United States, Court No. 05-00602.

On June 24, 2005, a duly authorized representative for the State of New Jersey filed a petition for Trade Adjustment Assistance (TAA) and Alternative Trade Adjustment Assistance (ATAA) on behalf of workers and former workers of Hercules, Parlin, New Jersey (subject facility) producing nitrocellulose (subject worker group). AR 1.

Following an investigation, the Department of Labor (Department) issued a negative determination regarding the subject worker group's eligibility to apply for TAA and ATAA on July 20, 2005. AR 24. The Department's Notice of determination was published in the Federal Register on August 26, 2005 (70 FR 50411). AR 31.

During the investigation, the Department found that the subject facility produces not nitrocellulose but natrosol and that Hercules, Inc. (subject firm) did not separate or threaten to separate a significant number or proportion of workers as required by the Trade Act of 1974. AR 24.

In a letter dated August 11, 2005, a representative of the International Union of Operating Engineers, Local 68, (Union) requested administrative reconsideration by the Department. The Union stated that they represent “7 Power plant employees” and alleged that the “Power House” workers produce steam used in the production of natrosol and nitrocellulose. The Union inferred that the subject workers are eligible to apply for TAA as workers of a secondarily-affected company, asserting that the Power House supplied a component part to Green Tree Chemical Technologies (Green Tree), which was TAA-certified on January 16, 2004 (TA-W-53,831), and that the workers' separations occurred because “Green Tree ceased production of Nitrocellulose in November of 2003.” The Union also stated that “if it wasn't for the Nitrocellulose business going out of business, the larger power house would have been left and employees would all stay working.” The subject firm's new power house “would only require 5 of the 12 people already employed.” AR 32, 33.

The Department issued a Notice of Affirmative Determination Regarding Application for Reconsideration on August 19, 2005. AR 36. The Department's Notice was published in the Federal Register on September 1, 2005 (70 FR 52131). AR 44.

Following the reconsideration investigation, the Department issued a Notice of Negative Determination on Reconsideration on September 13, 2005. AR 42. The Department's Notice of Determination on Reconsideration was published in the Federal Register on September 28, 2005 (70 FR 56741). SAR 1. In the reconsideration investigation, the Department found that steam produced by the Power House was used in the production of natrosol and sold to a TAA-certified company. The Department also found that the sale of steam to the TAA-certified company ceased in 2003, prior to the relevant period. As such, the subject workers were not certified for TAA. AR 42.

In a letter dated November 1, 2005 to the USCIT, the Union requested judicial review, stating that “all Hercules employees prior to 6/2000 and all of Green Tree employees which lost there (sic) jobs had gotten the TAA benefits.” SAR 2. In response to the complaint, the Department filed an administrative record.

In a July 27, 2006 letter to U.S. Department of Justice (Justice) counsel, Plaintiff's counsel provided Justice with a copy of an order of the Superior Court of New Jersey, Middlesex County, filed November 21, 2003. SAR 5-12. Plaintiff's counsel asserts that the Department's conclusions are inconsistent with facts reflected in the AR and the Superior Court of New Jersey order, and that the Department's secondarily-affected analysis was inappropriate. SAR 6.

Because the Department was previously unaware of the Superior Court of New Jersey order and is obligated to issue its determinations based on a thorough analysis for all available and facts, the Department requested voluntary remand.

Nitrocellulose is a highly-flammable chemical compound powder that is formed from nitric acid and cellulose. Common uses for nitrocellulose are gunpowder and magician's “flash paper” (sheets of paper than burn almost instantly with a bright flash and leave no ash). Because of its applications, it is also commonly known as guncotton. Unless the nitrocellulose is wet, it will self-explode. SAR 26-32.

Due to the volatile nature of the chemical compound, steam is an important part of the nitrocellulose production process. Steam is used to keep nitrocellulose wet, thus stable. Steam is not a component part of nitrocellulose but is used in the production process. For example, heat is used to bake cookies but is not a component part of the cookie, and the workers who create the heat are considered to be engaged in the production of cookies. Likewise, steam is used to produce nitrocellulose but is not considered a component part of nitrocellulose, and the workers who create steam are considered to be engaged in the production of nitrocellulose. Steam is generated from a power house.

For purposes of the Trade Act, the relevant period is from one year prior to the petition date (June 24, 2005) through the date the initial determination was issued (July 20, 2005). Therefore, the relevant period is June 24, 2004 through July 20, 2005. While events and facts that fall outside the relevant period may not be used as a basis for TAA certification, they may be used to provide context for the remand investigation.

During the remand investigation, the Department spoke to the former owner of Green Tree, SAR 33, and Hercules company officials. SAR 14, 34, 35. The purposes of the conversations are to gather information in order to determine the subject workers' eligibility to apply for TAA and to reconcile factual discrepancies.

According to the former owner of Green Tree, Green Tree purchased from Hercules the nitrocellulose line at the Parlin, New Jersey location. Under the agreement, Green Tree would rent the land from Hercules and purchase the buildings (including the Power House), machines, and equipment from Hercules. The former owner also stated that that nitrocellulose production ceased at Green Tree in November 2003 but some workers stayed on-site during the plant closure (including cleaning, fire safety, and power house staff). The company official also explained that that steam was produced throughout the shut-down process because it was Start Printed Page 75276needed to keep the nitrocellulose stable. SAR 33.

The Hercules counsel confirmed the facts surrounding the Superior Court of New Jersey, November 21, 2003, order, SAR 14, and provided the Department with a copy of a Superior Court of New Jersey, July 2, 2004, order. SAR 19. A brief history of the subject facility follows.

In June 2000, Hercules leased a parcel of land to Green Tree and sold the nitrocellulose production line, which sat on the parcel of leased land, to Green Tree. Under the agreement, Green Tree would take ownership of the Power House, which also sat on the leased land, and supply Hercules with steam for Hercules' natrosol production, which sat on a lot adjacent to the leased parcel of land. SAR 14.

In 2003, when Green Tree went out of business, Hercules was granted permission by the Superior Court of New Jersey to operate the subject facility as part of an effort to properly close it down. Such measures were required since Green Tree was unable to shut down the facility in a manner that was in compliance with New Jersey regulations. SAR 16-21.

Once Hercules obtained permission by the Superior Court of New Jersey to do so, it began the first phase of the shut down: removing the hazardous materials off-site, per New Jersey regulations. This process began in November 2003 and was completed on July 14, 2005. During that process, steam was required to keep the nitrocellulose stable, and the Power House was in operation to generate the required steam. When the hazardous material removal process was completed, Hercules terminated nonessential Green Tree employees, per the Superior Court of New Jersey orders. SAR 34.

Hercules is currently in the second phase of the shut down: demolishing the buildings and disposing of the debris. There is no projected completion date for this phase since disposal of the debris is a dangerous and tedious process. Because of its nature, nitrocellulose permeates the buildings and equipment. Each piece of material and equipment must be wiped clean of nitrocellulose particles and the nitrocellulose disposed of, per New Jersey regulations. SAR 34.

When asked about the Green Tree Power House, the Hercules' counsel stated that Hercules' decision to construct a modern and efficient power house of its own was made prior to Green Tree's bankruptcy in 2003 and was based on the advanced age and poor condition of the Green Tree Power House. SAR 14. Construction of Hercules' power house began in April 2005 and was completed in July 2005. SAR 35. After a trial run, the Hercules power house was deemed fully operational in August 2005. SAR 34, 35. When the Hercules power House began producing steam for its natrosol production, the Green Tree Power House was permanently shut down. SAR 34, 35. Because the Hercules power house is smaller and more efficient than the Green Tree Power House, only five of the twelve Green Tree Power House workers were offered employment with Hercules. SAR 34.

There are two allegations in the Plaintiff's complaint: 1) the subject workers are Hercules employees (“In July of 2004 Hercules made the Power House employees Hercules employees”) and 2) increased imports of nitrocellulose caused the workers' separations (“if Nitrocellulose business didn't deteriorate over the years due to foreign competition repairs would have been made to the older powerhouse, and both the nitrocellulose plant and the powerhouse would still be running.”) SAR 2.

The first issue is whether the subject workers are Green Tree employees or Hercules employees.

The Plaintiff stated in the complaint that “In July of 2004 Hercules made the Power House employees Hercules employees.” SAR 2. Plaintiff's counsel's letter suggests that the subject workers are Hercules employees (“Thus, from November 21, 2003 until the time at which it was shut down, the power house in question was still being operated in the name of and authority of Green Tree and not Hercules. The administrative record does not appear to provide any indication of when (if ever) the power house thereafter was operated by Hercules acting as Hercules.”) SAR 6.

According to a Hercules company official located on-site, the steam requirement for natrosol is one-third of the steam requirement of nitrocellulose. SAR 35. Therefore, when nitrocellulose removal was completed on July 14, 2005, steam production and employment levels at the Green Tree Power House was reduced accordingly. After those separations occurred, the remaining Green Tree workers continued to operate the Power House until the Hercules power house was able to produce its own steam in August 2005. When the Green Tree Power House was permanently shut down in August 2005, the remaining Power House workers were separated from employment with Green Tree and offered positions with Hercules to operate the Hercules power house. SAR 34, 35.

Hercules' decision to operate the Green Tree Power House after the conclusion of the nitrocellulose removal as cannot be construed as a constructive conversion of Green Tree employees into Hercules employees. The July 2, 2004 Superior Court of New Jersey order stated that “this authorization shall not relieve Green Tree of any obligations it may have, including that under any permit.” SAR 19. The June 2000 agreement between Hercules and Green Tree obligated Green Tree to provide Hercules steam for its natrosol production. SAR 14, 34.

Because Green Tree's legal obligation to provide steam to Hercules was not voided, SAR 16, 20, the operation of the Green Tree Power House to supply steam for Hercules' natrosol production is not “Hercules acting as Hercules,” SAR 6, but Hercules acting in Green Tree's name to maintain the operations of the Power House, as provided by the Superior Court of New Jersey July 2, 2004 order. SAR 19.

The July 2, 2004 order reinforces the “Green Tree-as-principle/Hercules-as-agent” relationship and identifies the workers at the Power Plant as Green Tree employees. As such, the Department determines that the subject workers are not employees of Hercules, Inc., Parlin, New Jersey but employees of Green Tree Chemical Technologies, Parlin, New Jersey.

Because the Department has determined that the subject workers are in fact employees of Green Tree engaged in the production of nitrcellolose, the subject workers are covered by a TAA/ATAA certification which was in effect at the time of the petition (Green Tree Chemical Technologies, Parlin, New Jersey; TA-W-53,831; issued January 16, 2004; expired January 16, 2006).

The second issue is whether increased imports of nitrocellulose caused the workers' separations. Because the workers are certified under Green Tree Chemical Technologies, Parlin, New Jersey (TA-W-53,831), it is apparent that the answer is in the affirmative.

Since the subject workers are covered by TA-W-53,831, further investigation in this case would serve no purpose and the investigation has been terminated.

Recognizing that there has been a significant delay between the workers' separations and their notification of certification under TA-W-53,831, the Department is providing guidance to the appropriate State agencies to enable the subject workers to apply for worker adjustment assistance. Start Printed Page 75277

Conclusion

After careful review of the findings of the remand investigation, I am terminating the investigation of the petition for worker adjustment assistance filed on behalf of workers and former workers of Hercules Incorporation, Aqualon Division, Parlin, New Jersey.

Start Signature

Signed at Washington, DC this 6th day of December 2006.

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.

End Signature End Preamble

[FR Doc. E6-21252 Filed 12-13-06; 8:45 am]

BILLING CODE 4510-30-P