EMPLOYER STATUS DETERMINATIONS

Railcar Repair of the South, Incorporated

Arkansas Motive Power Services, Inc.

Arkansas Railroad Contractors

This is a determination of the Railroad Retirement Board of the employer status of Railcar

Repair of the South, Incorporated, doing business as Russellville Railcar Repair (RRR), 

Arkansas Motive Power Services, Inc. (AMPS), and Arkansas Railroad Contractors (ARC) 

under the Railroad Retirement Act (45 U.S.C. sec 231 et seq.) and the Railroad

Unemployment Insurance Act (45 U.S.C. sec.351 et seq.). All of these companies are

subsidiaries of the Arkansas Short Line Railroads, Inc. (ASLR), which is a holding company 

incorporated under the laws of Arkansas for the purposes of running short lines and related

transportation. ASLR owns and operates the Dardanelle & Russellville Railroad (D&R), a

covered employer (BA No. 3813), and the Ouachita Railroad, Inc. (ORI), a covered 

employer (BA No. 3882). All of the above companies share a common office where all

payroll and accounting records are maintained.

Railcar Repair of the South d/b/a

Russell Rail Car Repair (RRR)

The following information was obtained by the Division of Audit and Compliance from the

records of RRR.

Railcar Repair of the South, Inc., d/b/a Russellville Railcar Repair, was incorporated in the

State of Arkansas on March 19, 1991. The purposes for which RRR is organized are: "the

repair, refurbishing, construction, and remanufacturing of all types of railroad rolling stock 

and equipment together with the purchase and sale of all railroad parts and equipment and 

related activities."

The principal shareholders and officers of RRR are William K. Robbins, Jr. and Timothy 

K. Robbins. These two individuals are also the principal shareholders and officers of the

following corporations: Arkansas Short Line Railroads, Inc. (ASLR), Dardanelle &

Russellville Railroad Inc. (D&R) and Ouachita Railroad, Inc. (ORI).

RRR employs approximately 9 individuals. Mr. Jerry Wesley, Vice President

Finance/Comptroller-D&R, estimated that RRR performs approximately 90% of its work for 

railroad customers, including a minimal amount (3%) for its affiliates, and the remaining 

10% for non-railroad customers. A review of accounts receivable shows that customer 

payments for service performed by RRR are being made to its affiliates the D&R and ORI.

RRR invoices direct customers to remit payment to the D&R or ORI respectively.

Mr. Wesley stated that Mr. Raymond Vaughn is the supervisor of RRR employees.

Mr. Vaughn is shown on payroll records to be an employee of the D&R railroad.

BCD 1995-101.2 
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Railcar Repair of the South, Incorporated

Arkansas Motive Power Services, Inc.

Arkansas Railroad Contractors

Arkansas Motive Power Services (AMPS)

The following information was obtained from the records of AMPS:

Arkansas Motive Power Services, Inc. (AMPS), is a subsidiary corporation of Arkansas

Short Line Railroads, Inc. (ASLR). AMPS was incorporated in the State of Arkansas on

May 25, 1991. The purposes for which AMPS is organized are: "to buy, sell, lease, and

repair railroad machinery and all related activities." The principal shareholders and officers

of AMPS are William K. Robbins, Jr. and Timothy K. Robbins.

AMPS currently employs two mechanics who work on D&R property and repair

locomotives. Twenty seven percent of their work is for railroads; the remaining work is for

private industry. AMPS performs all the mechanical repairs for its affiliated railroads which

amount to 3% of its railroad related business. One of the mechanics who performs work for 

AMPS is actually an employee of D&R and is carried on the payroll of that company. The

evidence shows that the work performed by the other employee is supervised by D&R.

Arkansas Railroad Contractors, Inc.

The following information was obtained from the records of ARC:

Arkansas Railroad Contractors, INC. (ARC), is a subsidiary corporation of Arkansas Short

Line Railroads, Inc. (ASLR). ARC was incorporated in the State of Arkansas on April 15,

1992. The purposes for which ARC is organized are: "the repair, maintenance, and

construction of railroad tracks, beds, right-of-way, bridges, and all structures or assents

commonly located upon railroad rights-of-way together with all related activities." The

principal shareholders officers of ARC are William K. Robbins, Jr. and Timothy K.

Robbins.

Mr. Jerry Wesley, Vice President Finance/Comptroller-D&R, estimated that ARC performed

approximately 20%-30% of its rail related service and construction work for railroad

customers. He estimated that approximately 70%-80% of ARC’S work is performed for nonrailroad customers. In 1992, 18% of ARC’S revenues were derived from its affiliate, ORI,

but this has dropped to less than 1% at the present time. There is no evidence that D&R or

ORI employees are involved in the supervision of ARC employees.

Legal Analysis
3

Railcar Repair of the South, Incorporated

Arkansas Motive Power Services, Inc.

Arkansas Railroad Contractors

Section 1(a)(1) of the RRA defines the term "employer" to include:

(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 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, or the receipt, delivery,

elevation, transfer in transit, refrigeration or icing, storage, or handling of

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

Section 1 of the RUIA contains essentially the same definition.

Section 202.5 of the Board’s regulations provides that a company is under common control

with a carrier whenever the control of such company is in the same person, persons, or

companies as that by which the carrier is controlled. In this case, the same individuals own 

railroads and RRR, AMPS, and ARC. Thus, RRR, AMPS and .ARC are under common

control with a carrier under the Acts. In addition, all three companies perform services 

which are reasonably directly related, both functionally and economically, to the common

carrier operations. Thus, these companies in the broadest sense are performing services in

connection with railroad transportation. See section 202.7 of the Board’s regulations.

However, the facts in these cases are virtually identical to those in Board Coverage Decision

93-79, In re VMV Enterprises Incorporated. VMV did only a small portion of its work,

amounting to 2.5% of its revenue, for its affiliated railroad although it performed a

substantial amount of its work for the rail industry as a whole. Based on the low level of

service for its rail affiliate, the Board (Labor Member dissenting) found that VMV was not 

performing a service in connection with railroad transportation.

In this case, 3% of RRR’s services, 3% of AMPS services, and 1% of ARC’S sendees are

performed for their rail affiliates. These percentages are nearly identical to the service level

at issue in VMV. Consequently, consistent with its holding in VMV. the Board (Labor

Member dissenting) finds that RRR, AMPS, and ARC are not covered employers under the

Acts.
4

However, this leaves open the question as to whether employees of the non-railroad affiliates

should be considered employees of the covered railroads. As indicated above, employees of

RRR perform all their work on property of D&R or ORI and are supervised by employees of 

the rail affiliates. Employees of AMPS perform all their work on D&R property, one

mechanic is already carried on the D&R payroll and, as noted earlier, the evidence is that the

other employee is supervised by D&R employees. Billings for RRR are done by D&R and

remittances for services performed are made to the railroad.

Section l(d)(l)(A)(i) of the RRA provides that an individual is in the service of an employer 

when he or she is subject to the continuing authority of an employer to supervise and direct

the manner of rendition of his services. (A similar provision is found in the RUIA.) Since

employees of RRR are supervised by an employee of D&R, the Board finds that employees

of RRR are statutory employees of D&R, and are thus covered under the Acts. Likewise, 

the employees of AMPS are subject to the direction of D&R and, for purposes of the RRA

and the RUIA, are employees of that carrier.

The evidence does not, however, support a finding that employees of ARC are statutory 

employees of either D&R or ORI. Accordingly, these individuals are not covered under the

Acts.

In conclusion, the Board (Labor Member dissenting) finds that RRR, AMPS, and ARC are

not employers under the Acts. However, the Board finds that employees of RRR and AMPS

should be considered employees of D&R, an employer under the Acts.

Railcar Repair of the South, Incorporated

Arkansas Motive Power Services, Inc.

Arkansas Railroad Contractors

Glen L. Bower

V. M. Speakman, Jr. (Dissenting in

part)

Jerome F. Kever
DISSENT OF

V M. SPEARMAN, JR.

ON EMPLOYER STATUS DETERMINATION

RAILCAR REPAIR OF THE SOUTH, INC,

ARKANSAS MOTIVE POWER SERVICES, INC

ARKANSAS RAILROAD CONTRACTORS

I agree that the individuals workingforRailcar Repair ofthe South, Inc., doing business

as Russellville Railcar Repair (RRR) andArkansasMotive Power Services (AMPS) are

covered railroad employees. However, in the case ofRRR, 90% ofits work isfor

railroad customers, and since a substantial amount ofits work isfor the railroad industry

as a whole, itshould be a covered employer as well. Thefact that only a small

percentage ofits revenue is derivedfrom it's affiliates is not relevant (See my dissent in

the VMVEnterprises. Inc., decision).

I do not take issue with the determination on Arkansas Railroad Contractors.

V. M. Speakman, Jr.