FEB 1 2 2002

EMPLOYER STATUS DETERMINATION

Southern California Regional Rail Authority

Segregation of Dispatching Department

B.C.D. 02-12

This is the decision of the Railroad Retirement Board with respect to a

request by the Southern California Regional Rail Authority (SCRRA)

that the Board rule as to whether its employees that will be organized

into the Dispatching Department are covered by 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).

Specifically, SCCRA has requested the Board to address the status of

the dispatch employees who currently work for AMTRAK and who

would be hired as employees of SCRRA in its Dispatching Department.

The Dispatching Department will be established effective October 1,

2002. The dispatchers will be responsible for dispatching all traffic on

SCRRA’s lines, which consist of: (1) Metrolink intrastate commuter

lines; (2) the “Coaster” intrastate commuter train administered by

public transit agencies in San Diego County; (3) AMTRAK interstate

and intercity passenger trains; and (4) Burlington Northern Santa Fe

and Union Pacific interstate freight trains. SCRRA also requests that

the Dispatching Department be segregated for coverage purposes in

accord with 20 CFR 202.3.

Background Information

In Board Coverage Decision (B.C.D). No. 94-116, issued December 14,

1994, the Board found that the SCRRA was not an employer under the

Railroad Retirement and Railroad Unemployment Insurance Acts.

That decision was based on the Board’s finding that SCRRA is a

governmental entity that is charged with the administration of

commuter rail operations in Southern California. SCRRA operates no

trains but contracts that function to AMTRAK. Based on previous

agency decisions that had held that a public entity that lacks the

capability of operating a railroad but rather contracts with an employer

under the Acts to operate the rail line is not a covered employer under

the Acts, the Board found that SCRRA was not an employer under the

Acts.

BA# 9749
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Southern California Regional Rail Authority

Segregation of Dispatching Department

A recent Board Coverage Decision in Railroad Ventures, Inc. (B.C.D. DO47, November 7, 2000) refined the standard that the Board would use to

determine when an entity that has its railroad functions performed by 

another would be found to be an employer under the Acts. In Railroad

Ventures, the Board set forth a three-part test that it would use to

determine the employer status of such an entity. The three-part test is

as follows:

1) whether the entity does not have as a primary purpose to

profit from railroad activities;

2) whether the entity does not operate or retain the capacity to

operate the rail line;

3) whether the operator of the rail line is already covered under

the RRA and RUIA. B.C.D 00-47, at pages 4-5.

SCRRA would continue not to be an employer under the three-part test

set forth in Railroad Ventures. SCRRA is a public entity charged with

the provision of commuter rail service in Southern California. As such,

it does not have as a primary purpose to profit from rail activities. Its

primary purpose is the provision of rail commuter service, rather than

any profit from that service. SCRRA does not retain the capacity to

operate a rail line. Finally, SCRRA has contracted with AMTRAK, an

employer under the Acts, to operate the trains. In conclusion, even

under the test set forth in Railroad Ventures, SCRRA remains not

covered by the RRA and the RUIA.

FUTURE ACTIVITIES

According to the record before us, the Dispatching Department is to

be established October 1, 2002. That Dispatching Department will

employ former employees of AMTRAK. The former AMTRAK

employees previously provided dispatch services for SCRRA on a 

contract basis. Effective October 1, 2002, SCRRA has decided to
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Southern California Regional Rail Authority

Segregation of Dispatching Department

provide its own dispatching services rather than rely on AMTRAK

for this service. AMTRAK will continue to provide other railroad

services on a contract basis.

Before deciding whether the Dispatching Department will be an

employer under the Acts administered by the Board, we must

address the issue of whether the Board should at this time issue a

ruling or delay until the Dispatching Department actually begins

operations. In a recent decision, the Board provided a coverage

opinion with regard to future operations. See Keokuk Electric

Railway, Inc., B.C.D. 01-83 (December 3, 2001). As in that case,

there is no doubt that the Dispatching Department will begin

operation October 1, 2002. In order to provide for as smooth a

transition as possible, a decision by the Board regarding the

coverage status of the Dispatching Department will facilitate rail

operations in the United States. Therefore, the Board will issue a 

decision regarding the Dispatching Department at this time.

Discussion

As noted in the background information, SCRRA is not an employer

under the RRA and the RUIA. As noted above, SCRRA’s principal

business is not as a rail carrier employer under the RRA and the RUIA,

but rather, SCRRA is a public entity charged with the provision of

commuter rail service in Southern California. Section 202.3 of the

Board’s regulations states that:

(a) With respect to any company or person

principally engaged in business other than

carrier business, but which, in addition to such

principal business, engages in some carrier

business, the Board will require submission of

information pertaining to the history and all
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Southern California Regional Rail Authority

Segregation of Dispatching Department

operations of such company or person with a view

to determining whether some identifiable and

separable enterprise conducted by the person or

company is to be considered to be the employer.

The determination will be made in the light of

considerations such as the following:

(1) The primary purpose of the company or

person on and since the date it was established;

(2) The functional dominance or

subservience of its carrier business in relation to

its non-carrier business;

(3) The amount of its carrier business and

the ratio of such business to its entire business;

(4) Whether its carrier business is a

separate and distinct enterprise.

(b) In the event that the employer is found

to be an aggregate of persons or legal entities or

less than the whole of a legal entity or a person

operating in only one of several capacities, then

the unit or units competent to assume legal

obligations shall be responsible for the discharge

of the duties of the employer. (Emphasis

supplied.) (20 CFR 202.3).

Information provided regarding SCRRA, demonstrates clearly that

SCRRA is not principally engaged in the railroad business and that

segregation is applicable to SCRRA. The number of employees

employed in the Dispatching Department will be less than 14% of

SCRRA’s total employees.

The Dispatching Department will be an identifiable and separable

enterprise. The Dispatching Department will have a separate payroll.

Employees in the Dispatching Department will be supervised solely by
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the Dispatching Manager. It is the intent of SCRRA to maintain strict

personnel separation between the Dispatching Department and the rest

of SCRRA’s operations. Employees not assigned to the Dispatching

Department will have no involvement with dispatching.

In summary, the Board finds that the evidence of record

overwhelmingly demonstrates that the principle business of SCRRA is

not rail service. The Dispatching Department, however, will be

performing rail related duties. As provided for in section 202.3 of the

Board’s regulations, the Dispatching Department is properly segregated

from the other activities of SCRRA. The Board finds that the

Dispatching Department will be a covered employer under the RRA and

the RUIA effective October 1, 2002, and its employees’ service and

compensation should be reported to the Board accordingly.

Southern California Regional Rail Authority

Segregation of Dispatching Department

V. M. Speakman, Jr.