|This is the decision on reconsideration
of the status of GLB as an employee under
the Railroad Retirement Act (45 U.S.C. §§ 231-231v)
(RRA) and the Railroad Unemployment Insurance
Act (45 U.S.C. §§ 351-369) (RUIA).
In B.C.D. No. 02-10, issued on February
11, 2002, the three-member Board of the
Railroad Retirement Board (RRB) held that
services performed for Utah Railway (URC)
by GLB are being performed as an employee
under the RRA and RUIA and that services
for Salt Lake City Southern (SLCSR) performed
by GLB during the period April 1, 1993 through
October 18, 1999 were performed as an employee
under the RRA and RUIA. Accordingly, such
service was found to be creditable under
the Acts insofar as permitted by RRB regulations.1
By letter dated May 10, 2002, GLB submitted
a request for reconsideration of that decision.
This request was followed by a letter dated
September 19, 2002, that contained argument
in support of GLB's contention.
As set forth in the initial decision, the
facts in this case are as follows:
The Utah Railway is a covered employer
under the RRA and RUIA (B.A. No. 2746).
The Utah Railway is the parent of the Salt
Lake City Southern Railroad Company, a covered
employer under the Acts from April 1, 1993,
until October 18, 1999 (B.A. No. 5730),
and a subsidiary of Arava Natural Resources
Company, Inc., which in turn is owned by
Mueller Industries, Inc. GLB is the President
and Chief Operating Officer of the Utah
Railway and the Salt Lake City Southern.
GLB was not reported as an employee of either
railroad. GLB performs the following services
for the Utah Railway: inspects locomotives
for purchase and lease; approves locomotive
repair and maintenance agreements; participates
in union management meetings; meets with
customers and suppliers to negotiate shipping
contracts and resolve trackage and switching
billing disputes; hires and discharges railroad
employees; conducts employee salary negotiations,
as well as disciplinary and arbitration
hearings; approves professional service
contracts; and executes instruments and
documents including checks, notes, mortgages,
deeds, security agreements, and contracts.
GLB is also the president, and, in some
cases, a director, of twelve natural resource
and mining companies. Estimates were that
GLB spends between 25-50 percent of his
time providing managerial services to the
Utah Railway. Utah Railway pays a monthly
management fee to Arava, which includes
APPLICABLE LAW AND REGULATIONS
Section 1(b) of the RRA (45 U.S.C. §
231(b)) defines the term “employee”
to mean any individual in the service of
one or more employers for compensation.
Section 1(d)(1) of the RRA provides that
an individual is in the service of an employer
(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. (45 U.S.C. § 231(d)(1)(i));
(ii) he renders such service for compensation***.
Section 1(e) of the RUIA (45 U.S.C. §
351(e)) contains essentially the same definition.
Section 1(k) of the Railroad Retirement
Act states as follows:
The term “employee” includes
an officer of an employer.
While the regulations of the Board generally
merely restate these provisions, it should
be noted that section 203.3(b) thereof (20
CFR 203.3(b)) provides that the foregoing
criteria apply irrespective of whether "the
service is performed on a part-time basis
* * *," and that section 203.2 (20
CFR 203.2) provides in pertinent part that
“An individual shall be an employee
whenever * * * (d) he is an officer of an
In his submission in support of his request
for reconsideration, GLB states that he
does not spend 25 – 50 percent of
his time on management activities for URC.
He concedes that he does devote some time
to management time for URC, but does not
state how much.
GLB's first allegation of error is
that he was not an employee of URC since
he was paid no compensation by URC. GLB
argues that since the general definition
of an employee contained in section 1(d)
(1) cited above is that the employee must
render the service to the railroad employer
for compensation. GLB further argues that
since he never received any compensation
directly from either URC or SLCSR he could
not be an employee.
It is uncontroverted that URC paid a management
fee to Arava. It is also uncontroverted
that GLB was an officer of URC and SLCSR
and performed services, as set forth above,
for those railroad employers. GLB was also
an officer of Arava and was paid a salary
directly by Arava. The Board's regulations
provide that compensation may be in any
form. See 20 CFR 211.2. It is reasonable
to conclude that the salary GLB received
from Arava was in part based on the management
fee paid by URC to Arava and the services
performed by GLB for URC and SLCSR. The
payment of the compensation for the services
GLB rendered to URC and SLCSR was by a third
party, Arava. This does not mean that GLB
was not paid compensation by the railroads.
GLB also argues that URC and SLCSR are
unable to determine the amount of compensation
that was paid to GLB since Arava paid that
amount. Difficulty in determining the amount
of compensation to be reported does not
relieve URC and SLCSR of the responsibility
to report compensation for services rendered
to the two employers by GLB. The amount
to be reported should reflect the value
of GLB's services to the covered employers.
GLB's next argument is that the language
in section 1(k) of the Act that defines
the term “employee” to include
an officer of an employer is not conclusive.
He argues that an officer must still meet
the definition of employee contained in
section 1(d)(1) of the Act. Interpretation
of a statute is to begin with the statute's
language. Mallard v. United States District
Court for the Southern District of Iowa,
490 U.S. 296, 300, 109 S. Ct. 1814, 1818,
104 L. Ed 2d 318,326 (1989). If that language
is plain, that is also where the inquiry
into the meaning of the statute must end,
for statutes are to be implemented according
to their terms. See United States v. Ron
Pair Enterprises, Inc., 489 U.S. 235, 241
(1889). There is no more persuasive evidence
of the purpose of a statute than the very
words by which the legislature undertook
to give expression to its wishes. United
States v. American Trucking Associations,
Inc., 310 U.S.534, 543 (1940). The only
recognized exception to this rule occurs
when a literal reading of a statute would
produce a result demonstrably at odds with
the intentions of the statute's drafters.
Griffin v. Oceanic Contractors, Inc., 458
U.S. 564, 571, 102 S. Ct. 3245, 73 L. Ed
2d 973,981 (1982).
In the present case, the plain meaning
of section 1(k) of the Act is that officers
of a railroad employer are employees. An
officer does not have to also meet the definition
of employee found in section 1(d)(1) of
the Act. Acceptance of GLB's argument
would make section 1(k) of the Act superfluous.
GLB is an officer of covered railroad employers
and, as such, is an employee of those employers.
GLB's final argument is that the
decision of the Board undermines “the
humanitarian intent of Congress”.
It is unclear what that humanitarian intent
is. GLB meets the definition of an employee
contained in the Act. The fact that he might
not obtain sufficient service to qualify
for an annuity is immaterial.
Upon reconsideration, the Board finds that
GLB was an employee of URC and SLCSR within
the definitions of employee in sections
1(d)(1)(i)(A), 1(d)(1)(i)(B) and section
1(k) of the RRA for the period in question.