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EMPLOYER STATUS DETERMINATION

S. Technology, Inc.

This is a determination of the Railroad Retirement Board concerning the status of P S.

Technology, Inc. (PST) 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).

PST is a wholly-owned subsidiary of Rio Grande Holding. Rio Grande Holding has a

controlling interest in The Denver & Rio Grande Western Railroad, an employer under the Acts.

Information regarding PST was provided by W. D. Falconer, President & CEO of PST, in a

letter dated May 1, 1995. That letter stated that PST was incorporated March 10, 1988, and

began its operations on that date. PST employs 28 employees. According to the letter, PST is

an independently operated subsidiary of Rio Grande Holding which installs and maintains

computer software for the railroad and transportation industry. In the period 1991-1994 2.6%

of PST’s revenues were derived from affiliated railroads, 46.2% of its revenues were derived

from other U.S. railroads, 38.9% of its revenues were derived from Canadian railroads, and the

remainder from either other foreign railroads or non-railroad sources.

Section 1 of the RRA defines the term employer to include the following:

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(i) any express company, sleeping car company, and carrier by railroad, subject

to subchapter I of chapter 105 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) of this 

subdivision, and which operates any equipment or facility or performs any

services (except trucking service, casual service, and the casual operations of

equipment or facilities) in connection with the transportation of passengers or

property by railroad.... [45 U.S.C. §231 (a)(l)(i) and (ii)]

The RUIA contains the same definition.

Section 202.5 of the Board’s regulations, defines when a company or person is under common

control:

A company or person is under common control with a carrier whenever the 

control of such company or person is in the same person, persons, or company

as that by which such carrier is controlled, [20 CFR 202.5],

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According to the information provided by W.D. Falconer, both PST and The Rio Grande and

Western Railroad are owned by Rio Grande Holding. Based on the common ownership of PST

and the Rio Grande and Western Railroad by Rio Grande Holding, the Board finds that PST is

nder common control with a rail carrier. The Board must now determine whether PST 

erforms a service in connection with rail transportation. The facts of this case are quite similar

BCD 1995-74 BA # 9752
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P.S. Technology, Inc.

to the facts addressed in Board Coverage Decision 93-79, In Re VMV Enterprises Incorporated.

VMV performed only 2.5% of its services for its rail affiliate and derived only 2.5% of its

revenues from that business. VMV did perform a substantial amount of its work, 55.7%, for

the rail industry as a whole. Because of the small amount of work performed by VMV for its

affiliated railroad, a majority of the Board found that VMV was not performing a service in

connection with railroad transportation.

The evidence of record shows that 2.6% of PST’s business comes from its railroad affiliate.

This level of service is almost exactly the level of affiliate service found insufficient for coverage

in Board Coverage Decision 93-79. Consistent with our earlier opinion in B.C.D. 93-79, a

majority of the Board finds that P.S. Technology, Inc. is not an employer under the RRA and 

the RUIA.

Glen L. Bower

V/ // ./ ,

V. M . Speakman, Jr. '0issenting

opinion attached)

/Jerome F. Kever
I

DISSENT OF V M. SPEARMAN, JR.

ON THE CO VERA GE DETERMINA TION OF

P.S. TECHNOLOGY, INC

I am in agreement that P.S. Technology, Inc. (PST) is under common control with a rail

carrier, but strongly disagree with the majority’s determination that it does notperform

service in connection with rail transportation. The basisfor the majority's decision is

Board coverage decision 93-79, VMVEnterprises. Inc. For the same reasons stated in

my dissent in VMV. I dissent in this case.

Section 1(a)(1)(H) ofthe Railroad RetirementAct of 1974 in plain language with plain

meaningprovides that an entity which is under common controlwith a railroad and is

performing railservices, is covered under the Acts. That section oflaw contains no

requirement that the railservice be performedfor the ajfdiate.

V. M. Speakman, Jr. ^

Date