JUL 2 5 2003

B.C.D. 03-63

EMPLOYER STATUS DETERMINATION

DECISION ON RECONSIDERATION

Chicago Heights Switching Company

This is a determination of the Railroad Retirement Board on reconsideration of

the status of Chicago Heights Switching Company (CHSC) as an employer

under the Railroad Retirement Act (45 U.S.C. § 231 et sea.) (RRA) and the

Railroad Unemployment Insurance Act (45 U.S.C. § 351 et sea.) (RUIA).

On November 21,2002, in Board Coverage Decision (B.C.D.) 02-84, the Board

held CHSC to be an employer under the Acts based on its providing railswitching operations within Bulkmatic Distribution Center at Chicago Heights,

Illinois as an agent for Bulkmatic Railroad Corporation (BRC). BRC is a Surface

Transportation Board (STB)-authorized rail carrier unaffiliated with CHSC. BRC has

been held by the Board to be a covered employer under the Acts (B.C.D. No.

02-39), B.A. No. 4411.

In its request for reconsideration, CHSC submits that it is a private carrier which

does not hold itself out to the public generally. CHSC claims that it has never

provided rail service as a rail common carrier and has not operated pursuant to 

the exemption for rail operation issued by the STB. Instead, CHSC reports that

BRC is providing rail service at the Bulkmatic Distribution Center as a common

carrier by rail.

The Bulkmatic Distribution Center is operated by Bulkmatic Transport Company

pursuant to a long-term lease from Fork Chop Limited Partnership. Bulkmatic

Transport Company is a motor common carrier and participates in the truck

portion of the transportation that takes place after the transloading operation at

the Distribution Center. The rail trackage at the Distribution Center is subleased

by Bulkmatic Transport Company to BRC. That trackage connects with

trackage owned and operated by Union Pacific Railroad and by Elgin, Joliet &

Eastern Railroad Company. BRC has undertaken the common carrier

responsibility for rail operations at the Bulkmatic Distribution Center.

CHSC provides rail service at Bulkmatic Distribution Center pursuant to an

agreement with BRC. Pursuant to that agreement, CHSC provides rail service for

Bulkmatic Transport Company only, and does not provide services to any other

company or individual1. The information submitted regarding CHSC is supported

, I

1 When requested to do so by BRC, CHSC arranges for a crew to maintain the trackage over which BRC

operates as a common carrier. The maintenance work is performed by employees of DOT Rail Service,

Inc., an affiliate of CHSC. The Board’s Audit and Compliance Section is reviewing the possible coverage 

status of DOT Rail Service underthe Acts administered by the Board.
-2-

EMPLOYER STATUS DETERMINATION

DECISION ON RECONSIDERATION

Chicago Heights Switching Company

by a Notice of Exemption, which was filed with the Surface Transportation Board

and issued March 7, 2002 (STB Finance Docket Number 34179), and provided to

the Board in connection with the request for reconsideration, and an affidavit

by Don L. Gibson, President of CHSC. The STB decision in Finance Docket

No.34179 noted that an exemption granted to CHSC in Finance Docket No.

34146 had not been consummated and that BRC would be the operator of the

line in question.

A majority of the Board finds that the additional evidence submitted in

connection with CHSC's request for reconsideration indicates that CHSC

provides rail-switching operations only as a private carrier. Accordingly, a

majority of the Board finds that the Board's previous decision regarding Chicago

Heights Switching Company should be reversed and holds that that company is

not an employer within the meaning of section 1 (a) (1) (i) of the Railroad

Retirement Act and the corresponding provision of the Railroad Unemployment

Insurance Act.

One additional aspect of this case must be considered. Under the “Scope of

Work, Compensation and Billing Procedure" contained in Appendix 2 of the

contract between CHSC and BRC, CHSC is required to furnish a locomotive

engineer and railroad switchman “to provide railroad switching service as agent

of [BRC] and in the name of [BRC] at the Bulkmatic Distribution Center. * * *"

Any CHSC employee who provides service as a locomotive engineer or railroad

switchman to BRC, a covered rail carrier under the RRA and RUIA, is an

employee of BRC with respect to such service and the compensation paid for it.

Such service and compensation must be reported to the Board.

Michael S. Schwartz
DISSENT OF

V. M. SPEAKMAN, JR.

ON EMPLOYER STATUS DETERMINATION

CHICAGO HEIGHTS SWITCHING COMPANY

I dissent from that portion ofthe Board’s decision on reconsideration which find that

Chicago, Heights Switching Company (CHSC) is a private carrier and thus not a rail 

carrier under the Railroad Retirement and Railroad Unemployment Insurance Acts.

CHSC has rights to operate trains of Bulkmatic Railroad Corporation (BRC), a Surface

Transportation Board (STB)-authorized rail carrier which has been held by the Board to

be a covered employer under the Acts, over CHSC’s trackage for the purpose of

providing rail service to shippers and receivers. The switching services provided by

CHSC are provided over a line engaged in interstate commerce in the name of BRC.

CHSC performs switching of the locomotives leased to it. It was granted an exemption

by the STB to operate the line in question. That operation involves switching trains for

BRC, a company, as mentioned above, operating in interstate commerce.

Accordingly, it is my opinion that CHSC should be held to be a covered employer under

the Railroad Retirement and Railroad Unemployment Insurance Acts. I concur with the 

majority’s conclusion that the employees of the CHSC who perform services for BRC are

covered employees under the Acts.

V. M. Speakman, Jr.

7- Z 2 -63

Date