B.C.D. 04-52

OCT 0 6 2004

Employer Status Determination

Employee Service Determination

Grant Railway Services, Inc.

This is the decision of the Railroad Retirement Board regarding the status of

Grant Railway Services, Inc., as an employer under the Railroad Retirement and

Railroad Unemployment Insurance Acts.

The Board received information regarding Grant from both Grant and ISG

Cleveland Works Railway, an employer under the Acts (B.A. No. 4276).

Information received from both companies is consistent in its description of

Grant's operations. Grant is a privately-held corporation which was

incorporated December 18, 2003, began operations February 15, 2004, and

engages in the inspection and repair of all freight cars owned by ISG Cleveland

Works Railway. It also performs inspection and repair on other common carrier

owned cars inbound and outbound from the ISG Cleveland plant. All services

are within ISG Cleveland facilities with ISG Cleveland equipment and materials. 

Grant "employees provide both daily and planned maintenance via direction

from [ISG Cleveland] supervision and operational personnel. Priority for work is

the responsibility of [ISG Cleveland] personnel. All work is approved and signed 

off on by [ISG Cleveland] on a daily basis." "All [Grant] employees are under

the direction, control and supervision of [ISG Cleveland]." Grant does not

provide services for any company other than ISG Cleveland and has no other

source of revenue.

Section 1 (a) (1) of the Railroad Retirement Act (45 U.S.C. § 231 (a)(1), insofar as

relevant here, defines a covered employer as:

(i) any carrier by railroad subject to the jurisdiction of the Surface 

Transportation Board under Part A of subtitle IV of title 49, United States

Code;

(ii) any company which is directly or indirectly owned or controlled

by, or under common control with, one or more employers as defined in

paragraph (i) of this subdivision, and which operates any equipment or

facility or performs any service (except trucking service, casual service,

and the casual operation of equipment or facilities) in connection with 

the transportation of passengers or property by railroad * * *
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Sections 1 (a) and 1 (b) of the Railroad Unemployment Insurance Act (45 U.S.C.

§§ 351 (a) and (b) contain substantially similar definitions, as does section 3231 of

the Railroad Retirement Tax Act (26 U.S.C § 3231).

Grant clearly is not a carrier by rail. Further, the available evidence indicates that

it is not under common ownership with any rail carrier nor is it controlled by officers

or directors who control a railroad. Therefore, Grant is not a covered employer

under the Acts.

This conclusion leaves open, however, the question whether the persons who

perform work for Grant under its arrangements with ISG Cleveland should be 

considered to be employees of the railroad rather than of Grant. Section 1 (b) of

the Railroad Retirement Act and section 1 (d) of the Railroad Unemployment

Insurance Act both define a covered employee as an individual in the service of

an employer for compensation. Section 1 (d) (1) of the RRA further defines an 

individual as “in the service of an employer" when:

(i) (A) he is subject to the continuing authority of the employer to

supervise and direct the manner of rendition of his service, or (B) he

is rending professional or technical services and is integrated into

the staff of the employer, or (C) he is rendering, on the property

used in the employer's operations, personal services the rendition of

which is integrated into the employer’s operations; and

(ii) he renders such service for compensation * * *.

Section 1 (e) of the RUIA contains a definition of service substantially identical to

the above, as do sections 3231(b) and 3231 (d) of the RRTA (26 U.S.C. §§ 3231 (b)

and (d). The focus of the test under paragraph (A) is whether the individual

performing the service is subject to the control of the service-recipient not only

with respect to the outcome of his work but also with respect to the way he

performs such work.

The evidence submitted shows that work performed by Grant employees is

performed under the direction and control of ISG Cleveland employees on ISG

Cleveland premises.
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Accordingly, the Board finds that the control test in paragraph (A) is met, and

employees of Grant are considered to be employees of ISG Cleveland effective

with the beginning of operations on February 15, 2004.

Michael S. Schwartz

V. M. Speakman, Jr.

erome F. Kever