B.C.D. 01-43

JUN 0 4 2001

Employer Status Determination

Watchmasters, Inc.

This is the decision of the Railroad Retirement Board regarding the

status of Watchmasters, Inc., as an employer under the Railroad 

Retirement and Railroad Unemployment Insurance Acts. The following

information was provided by Mr. F. F. Stuart, President and Chief

Executive Officer of Watchmasters.

Watchmasters was incorporated August 28, 1998, and began operations 

September 16, 1998. It is a privately held company owned and run by

Mr. Stuart and by Mr. J. T. Brock, both of whom are retired former 

employees of the Florida East Coast Railway Company1. Watchmasters

hires individuals as independent contractors to act as watchmen on an

as needed basis.

Watchmasters is notified that its services are required when Florida 

East Coast Railway receives a request by an outside party (such as

utility companies, telecommunication companies, and other contractors

and entities) seeking to construct on or adjacent to the railroad’s rightof-way. The watchmen are assigned by Watchmasters, but perform

their jobs essentially unsupervised.

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

Mr. Stuart and Mr. Brock both left their employment with the railroad industry in 1994. 1
Watchmasters, Inc.

casual operation of equipment or facilities) in connection

with the transportation of passengers or property by railroad

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).

Watchmasters 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, Watchmasters is not a covered employer under the Acts.

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

who perform watchman services under arrangements with Florida East

Coast Railway should be considered to be employees of those railroads.

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)

(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) 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 the watchmen are assigned to their

positions by the individuals who run Watchmakers and that they are 

otherwise unsupervised. Accordingly, they are not supervised by

employees of Florida East Coast Railway, and the control test in

paragraph (A) is not met. Moreover, those individuals are not

rendering professional or technical services and are not integrated into

the staff of the employer, so that the test contained in paragraph (B) is

not met. Further, they are not rendering personal services that are

integrated into the employer's operations. Thus, the test in paragraph

(c) is not met. The Board therefore finds that the watchmen do not 

perform employee service for Florida East Coast Railway.

Watchmasters, Inc.

V. M. Speakman, Jr.

Jerome F. Kever