■B.C.D. 00-20

Employer Status Determination

Employee Service Determination

Ryder Integrated Logistics, Inc.

WAY 3 0 2000

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

Ryder Integrated Logistics, Inc. (Ryder) as an employer under the Railroad

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

Insurance Act (45 U.S.C. §351 et seq.) (RUIA) and regarding the status of Ryder

employees under those Acts.

Under a contract with Union Pacific, Customized Transportation, Inc. (CTI), a

subsidiary of CSX Corporation, has been transporting diesel fuel to and

refueling Union Pacific locomotives for the last three years. Since January 1,

1998, CTI has also had a refueling contract with CSXT. Ryder serves as the

refueling operator for CSXT (and not for Union Pacific) under a subcontract

with CTI. A determination regarding the status of CTI under the Railroad

Retirement and Railroad Unemployment Insurance Acts is currently pending.

Ryder provides the drivers, tractors, and certification necessary to perform the

obligations under the contract. Ryder is a subsidiary of Ryder System, Inc., a

logistics company. Formerly, O/O Truck Sales, Inc., an affiliate of CSXT and

an employer under the Acts, performed the refueling service for CSXT (under a

contract between CSXT and the parent of O/O Truck Sales, CSX Intermodal,

Inc.). O/O Truck Sales was dissolved into CSX Intermodal on December 11,

1996.1 In 1995 CSX Intermodal contracted with Ryder for refueling services for

CSXT. On January 1,1998, the service agreement was assigned to CTI.

After November 1995, over half of the O/O Truck Sales employees obtained

employment with Ryder. A check of 1996 social security earnings records

indicates that of 201 O/O Trucking employees, 103 had earnings from Ryder.

Ryder uses 57 tankers owned by CTI, 4 supertankers and 7 locomotive service

trucks (LSTs) owned by CSXT, and tractors owned by Ryder. The LSTs are

trailers that carry traction sand, water, and oil to service the locomotives. They

have the capacity to unload toilets and suck out used oil from locomotives.

LSTs are dispatched to various locations with a chase truck carrying 2 CSXT

employees, a mechanic and a service attendant to service the locomotives. The

1 Board Coverage Decision (BCD) number 96-82 held CSX Intermodal not to be

an employer.
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Ryder driver is prohibited by work procedures contained in the Ryder

Employee Handbook from boarding the locomotive. The driver does not

perform Federal Railway Administration-required services. The CSXT

employees do not board or drive the LST. The driver fuels the locomotive, and

extends the watering hose or sand hand for the CSXT crew to use. The LST

driver does not check the oil, empty toilets, or work on the locomotive. The

LST driver is required to notify the CSXT yardmaster before starting a task,

when the task is completed, and when the driver is preparing to move the unit

to another location. The Handbook also provides that the driver “will receive

instructions from” the yardmaster.

Ryder employees are given work assignments and scheduling from Ryder

supervisors. Daily dispatch oflocomotives is provided by communication from

CSXT employees to Ryder supervisors. Ryder employees are not supervised by 

CSXT employees. CSXT does not provide insurance coverage for Ryder

employees. After a Ryder employee has fueled a CSXT locomotive, he fills out

an employee time sheet, activity shift report, meter tickets, a bill of lading,

weekly service summary, and a LST report. These documents are provided to 

Ryder supervisors; the last two are then shared with CSXT. The Ryder

Operations Manual provides that every fuel truck will receive instructions from

yardmasters. Ryder supervisors and CSXT machinists instruct Ryder drivers

on the road. The Power Desk is an operation of CSXT and is responsible for 

knowing the location of CSXT trains, their destinations, and the amount of fuel

they have and the amount they need. The Power Desk decides what engines

are to be fueled and where. Yardmasters communicate directly or indirectly

with the Power Desk. The Power Desk organizes the line up that will

determine what the LST operators will do. The LST operator starts his day by

either contacting the trainmaster or yardmaster directly to obtain the schedule

or receives it from the driver he is relieving. The Central Dispatching Center, a

part of CSXT, processes reports from Ryder drivers. The data from these

reports is processed and transmitted to the Power Desk. All training for Ryder

employees is provided by Ryder.

Ryder’s web site states that the company designs, operates, and manages

custom-tailored logistics2 systems for companies such as Whirlpool, Xerox, 

Target Stores, the Saturn and Cadillac divisions of General Motors, Hewlett

Ryder Integrated Logistics, Inc.

2 Ryder’s web site defines “logistics” as “the process of getting the right

products to the right place at the right time in the right condition.”
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Packard, Bell South, and Ford Motor Company. It operates in the United

States, Canada, the United Kingdom, Germany, Poland, Mexico, the

Netherlands, Brazil, and Argentina. Revenue in the twelve months ending

June 30,1999, was $5.4 billion. Assets as of that date were $6.2 billion.

Section 1(a)(1) of the Railroad Retirement Act [45 U.S.C. §231(a)(l)], 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;

(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) ofthis

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

*** [45 U.S.C. §23 l(a)(l)(i) and (ii)].

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 (RRTA) (26 U.S.C. §3231).

Ryder is clearly not a carrier by rail. Further, there is no evidence that Ryder is

under common ownership with any rail carrier or controlled by officers or

directors who control a railroad. Ryder therefore is not a covered rail carrier

affiliate employer. As Ryder meets no other definition of a covered employer

under the Acts, the Board finds that Ryder is not a covered employer.

This conclusion leaves open, however, the question of whether the individuals

who performed work for Ryder under its arrangements with CSXT should be 

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

the Railroad Retirement Act and section l(d)(i) of the Railroad Unemployment

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

Ryder Integrated Logistics, Inc.
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an employer for compensation. Section 1(d) ofthe Railroad Retirement Act

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 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) ofthe Railroad Unemployment Insurance Act contains a definition of

service substantially identical to the above, as do sections 3231(b) and 3231(d) of

the Railroad Retirement Tax Act (26 U.S.C. §§ 3231(b) and (d)). Paragraph (A) of

the definition dates from the inception of the railroad retirement system. See 

Public Law No. 162, 75th Cong., Ch. 382, Part I, (50 Stat. 307). A majority of the

Board finds that the evidence indicates that employees of Ryder who performed

services under the contract between CTI and Ryder are not "subject to the

continuing authority of the employer to supervise and direct the manner of 

rendition of [their] service" as specified in paragraph (A). The only evidence to

the contrary is the statement in the Ryder Employee Handbook that drivers will

receive instructions from yardmasters. It is the view of a majority of the Board

that this language does not mean that the yardmasters have “continuing

authority * * * to supervise and direct the manner of rendition of’ service of the

drivers but that the yardmasters are in charge of the CSXT property where the

refueling takes place. Accordingly, a majority of the Board finds that the

individuals performing services under the contract do not meet the definition

contained in subparagraph (A), above.

The tests set forth under paragraphs (B) and (C) go beyond the test contained

in paragraph (A) and would hold an individual to be a covered employee if he is

integrated into the railroad's operations even though the control test in

paragraph (A) is not met. However, under an Eighth Circuit decision

consistently followed by the Board, these tests do not apply to employees of

independent contractors performing services for a railroad where such

contractors are engaged in an independent trade or business. See Kelm v.

Ryder Integrated Logistics, Inc.
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Ryder Integrated Logistics, Inc.

Chicago. St. Paul. Minneapolis and Omaha Railway Company. 206 F. 2d 831

(8th Cir. 1953). Ryder is a multi-billion dollar company which provides services

for a wide variety of companies other than CSXT. It is indisputably engaged in

an independent trade or business.

Accordingly, it is the decision of a majority of the Board that the services

performed by employees ofRyder for CSXT are not creditable under the Railroad 

Retirement and Railroad Unemployment Insurance Acts.

opinion attached)
DISSENT OF

V. M. SPEAKMAN, JR.

ON

EMPLOYER STATUS DETERMINATION

RYDER INTEGRATED LOGISTICS, INC.

It is my position that employees working as “contractors” for Ryder are in fact under the

direction and supervision of CSX Transportation (CSXT) rather than Ryder, especially

when performing service at the location ofthe railroad. Employees performing work

under the contract rely on a significant amount of equipment, resources and supervision

by CSXT in the performance oftheir duties. As stated in the majority’s determination,

Ryder uses 57 tankers owned by CTI and 4 supertankers and 7 locomotive service trucks

(LST’s) owned by CSXT. Those individuals driving the LST’s are required to report to

the CSXT yardmaster before starting their tasks, and must receive their schedules and

instruction from the trainmaster or yardmaster.

One employee stated during the course ofthe Railroad Retirement Board’s audit that he

seldom sees a Ryder representative and has daily contact with the CSXT yardmasters and

trainmasters. Those individuals give him the orders on where to go and what to do.

Safety training is performed by CSXT. Travel expenses are apparently paid by Ryder,

but employees say that they believe it is later billed to CTI.

I dissent from the majority ofthe Board’s determination and would find the individuals in

question to be under the continuing authority ofCSXT, thus covered under the Acts.

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