B.C.D. 02-23

EMPLOYER STATUS DETERMINATION

White Pass Enterprises LLC

MAR 1 5 2002

This is the decision ofthe Railroad Retirement Board concerning the employer

status of White Pass Enterprises LLC 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).

Background Information

In B.C.D. No. 00-9, issued on March 24, 2000, the Board held that Pacific and

Arctic Railway and Navigation Company (PARN) was an employer under the

RRA and the RUIA from December 20, 1979 to April 30, 1988. PARN is an

Alaskan corporation which merged with a West Virginia corporation ofthe same

name on December 20, 1979. The West Virginia corporation had been a rail

carrier employer with service creditable from its commencement ofrail service in

1898. B.C.D. No. 00-9 also held that the West Virginia corporation ceased to be a

covered employer on the date ofits merger with PARN, and that PARN

subsequently ceased to be a covered employer on April 30, 1988, because it

operated a passenger excursion service that did not operate as part of an interstate

rail network. On November 2, 2000, the Board reopened that decision and

reversed that part of it which held that PARN ceased to be an employer effective

April 30, 1988, finding that PARN had been and continued to be a rail carrier

employer since December 20, 1979 (B.C.D. No. 00-44).

Subsequently, PARN requested that certain categories ofits employees, (1) retail

sales employees, consisting oftour guides (on board train clerks), gift shop clerks,

espresso makers (barista), and re-stockers; and (2) shuttle drivers, be held not to be

covered under the Acts. This request was later withdrawn.

PARN is one ofthree related railroads which conduct sendee under the trade name

ofthe White Pass and Yukon Route (White Pass). The other two related railroads

are the British Columbia-Yukon Railway Company (BCYR) and British-Yukon

Railway Company Limited (BYR).

White Pass Enterprises LLC

White Pass Enterprises, LLC was organized on November 5, 2001, as a limited

liability company in the State of Alaska. It is a wholly owned subsidiary of White
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White Pass Enterprises LLC

Pass & Yukon U.S. Inc., which is also the parent company and sole owner of

PARN. Information about White Pass Enterprises, LLC was furnished by Fred

McCorriston, President ofPARN.

PARN has owned and operated a gift shop that was constructed in 1997 as an 

attachment to PARN’s existing depot. PARN has subsequently expanded sales

operations to a small shop situated on one ofits port dock facilities as well to the

internet. Historically, individuals hired for retail sales positions were employed by

PARN. There are three categories ofretail sales employees involved: gift shop

clerks, espresso makers (barista), and re-stockers who maintain adequate inventory

levels of gift shop merchandise. PARN has also employed shuttle drivers who

transport cruise passengers on the dock. Except for one retail manager who is 

employed throughout the year, the retail sale positions and shuttle driving positions

are seasonal employment, and the employees are not entitled to company funded

benefits, such as health insurance and retirement other than those benefits required

by law.

During the height ofthe 2001 operating season, PARN employed a total of 148

employees, 17 ofwhom worked in the gift shops, including clerks, re-stockers, and

espresso makers. There were also 3 shuttle drivers. These 20 employees were

paid 4.9 percent of company-wide wages for the fiscal year ended June 30, 2001.

PARN’s operations are closed for the year and the seasonal workers referenced

above have been laid off. White Pass Enterprises plans to hire employees to

perform retail sales and shuttle driving for PARN’s next season of operations

beginning next spring.

In order to provide additional perspective, Mr. McCorriston provided the following

summary of all revenues reported for PARN for the fiscal year that ended June 30,

2001:
White Pass Enterprises LLC

Revenue Source Dollars

(thousandsj

Rail Passenger Service $17,568 71.4%

Port Facilities 4,519 18.4%

Retail Sales 1,390 5.7%

Joint Venture 1,086 4.4%

Other 37 .1%

Total $24,600 100 %

Authority

Section 1(a)(1) ofthe 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 ofthe

Surface Transportation Board under Part A ofsubtitle IV oftitle 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) 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 * * *.

Sections 1(a) and 1(b) ofthe Railroad Unemployment Insurance Act (45 U.S.C. §§

351(a) and (b)) contain substantially similar definitions, as does section 3231 ofthe

Railroad Retirement Tax Act (26 U.S.C. § 3231).
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White Pass Enterprises LLC

Section 202.7 ofthe Board’s regulations defines “service in connection with

railroad transportation” in pertinent part as service that “is reasonably directly

related, functionally or economically, to the performance of obligations which a

company or person or companies or persons have undertaken as a common carrier

by railroad.. .” (20 CFR 202.7).

Discussion and Conclusion

White Pass Enterprises LLC is not operating a railroad and thus does not fall under

the first definition of an employer under the RRA and RUIA. However, since

White Pass Enterprises is owned by White Pass & Yukon U.S., Inc., the same

company which owns PARN, it is under common control with a rail carrier

employer under the Acts. The question thus becomes whether White Pass

Enterprises performs any service in connection with railroad transportation. White

Pass Enterprises was formed to staffthe retail sales and shuttle driver positions

which support PARN’s tourist business. While the work performed by the holders

ofthose positions complements PARN’s tourist business, the majority ofthe Board

finds that those positions are separate from the rail transportation that PARN

furnishes. PARN could provide its rail transportation without the work done in

those positions. In fact, PARN did provide such transportation without the work

done in the retail positions for years until it constructed the gift shop in 1997. In

effect, what PARN did in 1997 was to expand into another type of business (i.e.,

retail sales). The formation of White Pass Enterprises now formally separates that

new (retail) business, as well as the shuttle drivers, from PARN’s rail

transportation business. A majority ofthe Board finds that the record as a whole in

this case does not support a finding that White Pass Enterprises performs service in

connection with railroad transportation.
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White Pass Enterprises LLC

Accordingly, it is determined that White Pass Enterprises is not an employer under

the Railroad Retirement and Railroad Unemployment Insurance Acts.

Cherryl T» Thomas

V. M. Speakman, Jr. (Dissenting

opinion attached)

Jerome F. Kever
DISSENT OF V. M. SPEAKMAN, JR.

EMPLOYER STATUS DETERMINATION

WHITE PASS ENTERPRISES, L.L.C.

I disagree with the majority ofthe Board’s decision on this coverage issue and would find

White Pass Enterprises, L.L.C., (WPE) to be a covered entity. The majority’s decision

states that WPE was formed to staff the retail sales and shuttle driver positions which

support PARN’s tourist business. However, WPE was not formed to staff these 

positions, rather these positions were staffed to perform the respective duties prior to the

existence of WPE, as PARN employees.

PARN could provide rail transportation, without the work done by the WPE employees, 

but, the fact remains that WPE still performs service in connection with the transportation

of passengers by railroad. The establishment of a separate payroll should not change the

status ofthese employees.

Accordingly, I dissent from the majority opinion on this decision.

V. M. Speakman, Jr.

Labor Member

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