EMPLOYER STATUS DETERMINATION

Boothill & Western Railway Company

NOV 2 1 2002

This is the determination ofthe Railroad Retirement Board concerning the status of

Boothill & Western Railway Company (B&W), as an employer under the Railroad

Retirement Act (45 U.S.C.. § 231 et seep) and the Railroad Unemployment

Insurance Act (45 U.S.C.. § 351 et seep).

Information regarding B&W was provided by attorney Marc E. Kliewer, and by

Brenda Kenton, Grain Division Manager ofthe Right Cooperative Association of

Wright, Kansas (Cooperative).1 According to a response from Mr. Kliewer sent by

telefacsimile April 23, 2001, the B&W, which is owned by the Right Cooperative

Association, acquired on September 1,2000, approximately 26 miles oftrack in

Kansas, running from Bucklin to Dodge City. The B&W interchanges with the

Union Pacific Railroad at Bucklin and the Burlington Northern Santa Fe Railway at

Dodge City. In Surface Transportation Board Finance Docket 33945,

December 13, 2001, B&W filed a notice of exemption to acquire the line from the

Dodge City Ford & Buklin Railroad Company. See: Boot Hill & Western Railway

Co. LC - Acquisition Exemption - Dodge City Ford & Bucklin Railroad Company.

December 13, 2000, 65 Fed. Reg. 77959.

Mr. Kliewer advised in April 2001 that although B&W had never had any

employees on its payroll, eight train movements had occurred since September

2000, with B&W equipment operated by an employee ofthe parent Cooperative.

Ms. Kenton confirmed by letter dated August 29, 2002 that “The railroad has no

full time employees and is presently operating on an as needed basis only using the

employees ofthe Right Cooperative Association.”

Section 1 (a)( 1) ofthe Railroad Retirement Act (RRA) (45 U.S.C. § 231 (a)( 1)), insofar

as relevant here, defines a covered employer as:

1 According to the Right Cooperative Association website (rightcoop.com), the Cooperative ships 

grain by truck and rail transportation, operates feed mills, processes soy beans into meal and oil,

operates 15 trucks to move grain and commodities through the United States, assists farmers in

crop production, sells petroleum products, and operates an auto repair and farm supply store.

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Boothill & Western Railway Company

(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;

Sections 1(a) and 1(b) of the Railroad Unemployment Insurance Act (RUIA), 45

U.S.C. 351(a) and (b), contain substantially similar definitions, as does section 3231 of

the Railroad Retirement Tax Act (RRTA), 26 U.S.C. 3231.

The evidence ofrecord establishes that B&W is a carrier operating in interstate

commerce. Accordingly, it is determined that B&W is an employer within the

meaning ofsection 1 (a)( 1 )(i) ofthe Railroad Retirement Act (45 U.S.C.

§ 231 a( 1 )(i)) and the corresponding provision ofthe Railroad Unemployment

Insurance Act as of September 8, 2000, the date as of which it acquired the rail line

and commenced operations.

The evidence available is that B&W is not staffed with administrative or operating

employees, but that employees of the Cooperative run the locomotive and conduct

duties associated with train movement such as switching and signaling as necessary.

While B&W nominally has no employees, it nevertheless does conduct train

operations. The last question is therefore whether B&W has employees which it must

report to the Board within the meaning of the Railroad Retirement and Railroad

Unemployment Insurance Acts. Section 1(b) of the RRA and section l(d)(i) of the

RUIA both define a covered employee as an individual in the service of an employer

for compensation. Section 1(d) of the RRA further defines an individual as "in the

service of an employer" when:

(i)(A) he is subject to the continuing authority ofthe employer to 

supervise and direct the manner ofrendition 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
Boothill & Western Railway Company

(ii) he renders such service for compensation * * *.

Section 1 (e) ofthe RUIA contains a definition ofservice substantially identical to the 

above, as do sections 3231 (b) and 3231 (d) ofthe 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 the way he performs such work. With respect to

locomotive engineers, the Board notes that the Federal Railway Safety Act and

regulations promulgated thereunder prescribe minimum standards for training, testing,

certification and monitoring. See 49 U.S.C. 20135, and regulations of the Federal

Railroad Administration (FRA) at 49 CFR Part 240. The FRA regulations further

specify that a contractor for a railroad who performs for a railroad any function

covered by the regulations must perform that function in accordance with the 

requirements. 49 CFR 240.3(c). These standards represent the judgment ofCongress

that the paramount importance ofsafe railroad operation requires oversight ofengineer

qualifications on a national basis. Cf. Peters v. Union Pacific Railroad Co.. 80 F.3d

257,261 (8th Cir., 1996) (pursuant to former 45 U.S.C. 434, now codified as 49 U.S.C.

20106, FRA locomotive engineer licensing procedures pre-empt engineer’s claim

under state law against railroad for withholding certificate).

It is the opinion ofthe Board that the duties of a locomotive engineer are so integral

to the operation of a rail carrier that the railroad must retain control over the manner

in which these individuals perform their service. It is further the opinion ofthe

Board that the operation ofrail service requires that B&W must direct and control

the duties of a brakeman/switchman as well. See Railway Express Agency v.

Railroad Retirement Board. 250 F. 2d 832, (7th Cir., 1958), (the nature ofthe

employer’s business requires retention of direction and control of non-exclusive

commission express agents).

Accordingly, in the opinion ofthe Board, the control test in paragraph (A) is met

with respect to individuals providing train operation services to the B&W,

including locomotive engineers, switchmen, and brakemen. Service and
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Boothill & Western Railway Company

compensation attributable to service performed for B&W is to be reported by B&W

for these individuals.

Cherryla. Thomas

V. M. Speakman, Jr.

Jerome F. Kever