EMPLOYEE STATUS DETERMINATION

Genesee Valley Transportation Company, Inc.

This is the determination of the Railroad Retirement Board

concerning the status of the officers and employees of Genesee

Valley Transportation Company, Inc. (Genesee) 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). Since

a majority of the Board finds that these individuals should be

treated as employees of railroads covered under those Acts, the

Board does not reach the status of Genesee.

Genesee is a holding company that owns five railroads: (1) Mohawk,

Adirondack & Northern Railroad Corporation (BA No.3286); (2)

Lowville & Beaver River Railroad (BA No.3215); (3) Depew, Lancaster

& Western Railroad Co., Inc. (BA No.3275); (4) the DelawareLackawanna Railroad Co. (BA No.2260); and (5) the Genesee & Mohawk

Valley Railroad. Genesee began operations in August 1993, and

provides all of its services, consisting of managerial and

technical advice, to those five railroads and derives all of its

revenue from rail-connected service. In addition to its officers,

Genesee had three employees as of January 31, 1995, all of whom

work in positions related to the operation of the rail carriers and

one of whom works part-time as an engineer and conductor on

property owned by a railroad. Mr. Louis Andolora, Accounting

Coordinator for Genesee, in a letter of March 11, 1992, states that

employees of Genesee will be working alongside railroad employees.

Genesee's officers are David J. Monte Verde, President; Charles J.

Riedmiller, Senior Vice President, Marketing/CFO; Jeffrey P.

Baxter, Senior Vice President of Operations; Michael D. Thomas,

Vice President Engineering/Acquisitions; and John S. Herbrand,

Secretary/General Counsel. These same men are the directors of

Genesee and also hold the same capacity as officers and directors

in the Depew, Lancaster & Western Railroad Co., the Mohawk

Adirondack & Northern Railroad Co., the Lowville & Beaver River

Railroad Co., Inc., and the De1aware-Lackawanna Railroad. These

same men also collectively own one hundred (100%) percent of

Genesee's stock. (See ICC Finance Docket No. 32170, Petition for

Exemption.)

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 rendering

professional or technical services and is integrated into

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

BCD 1996-75
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Genesee Valley Transportation Company, Inc.

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 that above, as do sections 3231(b) and

3231(d) of the RRTA [26 U.S.C. §§ 3231(b) and (d>].

The record establishes that Genesee's officers and other employees

perform services essential to the operations of the rail carriers.

Accordingly, it is the determination of the majority of the Board,

that these individuals are also employees of the affiliated rail

carriers to the extent of the service rendered.

/ Glen L. Bower

opinion attached)
CONCURRING OPINION OF

V. M. SPEAKMAN, JR.

ON EMPLOYER STATVS DETERMINATION OF

GENESEE VALLEY TRANSPORTATION COMPANY, INC.

I agree with the determination that officers ofGenesee Valley Transportation Company,

Inc., (Genesee) and employeesperforming servicesfor its affiliated railroads should be

covered under the RailroadRetirement Act and the Railroad Unemployment Insurance

Act (the Acts). However, I would also consider these individuals to be employees of

Genesee itself, and that Genesee should be a covered employer as well.

As the majority ofthe Boardpoints out, Genesee is a holding company that ownsfive

railroads andprovides all ofits service to thosefive, deriving all ofits revenuesfrom rail

connected service. Furthermore, the samefive individuals who own Genesee, serve as

Genesee’s officers and directors, as well as directors offour ofthefive railroads that

Genesee owns. Therefore, both Genesee and thefour railroads are controlled by the

same group offive individuals. Accordingly, it should be undisputed that Genesee is

under common control withfour ofitsrailroad affiliates (especially considering their

common interests and thefact that individuals acting as directors ofone entity would not

necessarily have separate interests when actingfor another entity), and is providing

service in connection with railroad transportation.

Following the majority's determination in this case would require that each Genesee

employee must literally be carried on up tofive rail carrier affiliate payrolls. Moreover,

I don't agree that the employees in question should be covered only to the extent that

theyperform workfor the rail affiliates. All services should be covered, since they

should be considered employees ofa covered entity.

For the reason stated, it is my position that Genesee should be an employer covered

under the Acts effective August l, 1993, thefirst day in which it began to provide

managerial and technical advice to its affiliates.

Date