B.C.D. 02-6 JAN 2 2 2002

EMPLOYER STATUS DETERMINATION

H & M International Transportation. Inc.

This is the determination of the Railroad Retirement Board concerning 

the status of H & M International Transportation, Inc., as an employer 

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

Railroad Unemployment Insurance Act (45 U.S.C. § 351 et seq.).

Information regarding H & M was provided by Thomas Vasiljevich, 

outside counsel for H & M. According to Mr. Vasiljevich, H & M began

doing business in 1968 and is jointly owned by Charles T. Conners and 

Robert Gildersleeve. H & M currently has 968 employees, 397 or 41

percent of whom are in positions related to business connected wdth rail

carriers.

H & M performs intermodal terminal operations at five sites. It

operates side loaders and cranes to load and unload trailers and

containers from railroad flat cars. It hostles trailers and containers to

and from parking places, and inspects containers and trailers to

determine any damages. It provides customer service and clerical

support at one terminal. Clerical support includes providing systems

input, trailer and container inventory, car programming, and office

administration. H & M also operates local area trucking terminals

throughout the country; provides custom examination sites; and

performs warehousing and distribution facilities. Effective June 1,

1998, under contract with the Union Pacific Railroad, H & M began

operating locomotives at the Marion, Arkansas, terminal to move

intermodal cars to and from operating tracks and to and from departure

tracks and arrival tracks.

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:

BA# 4575
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H & M International Transportation. Inc.

(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 (45

U.S.C. §§ 351(a) and (b)) contain substantially the same definition, as

does section 3231 of the Railroad Retirement Tax Act (26 U.S.C. §

3231).

The evidence of record establishes that H & M is a carrier operating in 

interstate commerce by reason of the switching operations which it

performs at the Marion, Arkansas, terminal. Although this operation

represents only a very small proportion of H & M’s enterprise, there is

no exclusion from coverage under the Railroad Retirement Act of a

carrier for that reason.

However, section 202.3 of the Board’s regulations provides 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 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;
-jH & M International Transportation. Inc.

(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. (20 CFR 202.3).

H & M’s switching operation consists of 18 employees out of a work

force of 968. H & M began operations in 1968 and did not begin

switching operations until 30 years later. H & M performs operations

at five separate railroad terminals, only one of which involves switching

operations, and at many other sites, where it operates local area

trucking terminals, custom examination sites, and warehousing and

distribution facilities. Accordingly, the Board finds that H & M would

be an appropriate case for the application of section 202.3 so that only

the switching operation portion of H & M’s enterprise is considered to 

be a covered employer under the Acts.

Accordingly, it is determined that the switching operation at Marion,

Arkansas, operated by H & M is an employer within the meaning of

section 1 (a)(1)(i) of the Railroad Retirement Act (45 U.S.C.§ 231
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H & M International Transportation, Inc.

(a)(l)(i)) and the corresponding provision of the Railroad

Unemployment Insurance Act as ofJune 1, 1998, the date as of which

the switching operations commenced.

Cherry1(T. Thomas

V. M. Speakman, Jr.

^Jerome F. Kever