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August 15, 1958

llr. Charles Donnelly, President Company St. Paul,

Dear Sir;

Reference is made to your letter of April 25, 1958 contain­ ing further information concerning the relationship of E. M. Burch to the Northern Pacific Railway Company under his contract with the com­ pany dated February 1, 1954.

The pertinent provisions of this contract are as follows:

♦’The contractor (Mr. Burch) agrees to furnish operators to check the work of such passenger train conductors, freight train conductors and dining car conductors of the Railway Company at such times as it may designate, for the purpose of determining -whether or not all moneys and tickets collect­ ed by the said conductors are turned over to the Railway Com­ pany. The contractor agrees to make reports covering the re­ sults of such checking in such form as the Railway Company may from time to time require. The Railway Company agrees to pay the contractor for his services the sum of seventy-five dollars ($75.00) per month and to reimburse the contractor for all railroad fares, wages, and expenses of the operators, including their subsistence end dining car incidental expenses incurred in connection with the checking of said conductors, provided, however, that in no event shall the Railway Company be required to pas'- the contractor on account of the wages and expenses of the operators, other than railroad fare, a greater sum than six dollars (^6.00) per day per operator. . . • The contractor shall indemnify and save the Railway Company harm­ less from and against all loss, cost, damage and expense caused by the injury to or death of the operators employed by the con­ tractor, in the transaction of the checking embraced in tnis contract, whether such injury or death results from the negli­ gence of the Railway Company or otherwise. . . » This agreement shall continue in force for a period of thirty (5G) days and thereafter until terminated by either party giving to the other narty thirty (30) days’ notice in writing of his desire to do so.” p, r Is, Charles Donnelly, President

It appears from the information furnished v.ith your letter of April 25, 1938, that the general manager of the Railway Company specifically directs Mr* Burch as to the manner in which operators shall perform their work for the Railway Company; that "while the con­ tract is silent as to the right of the Northern Pacific Railway Com­ pany to direct the means and methods used by Mr* Burch and his opera­ tives, there is an understanding between our General Manager and Mr. Burch that we have this right" and "that operatives will be discharged at our request". Although Mr. Burch and his operators are not reported to the Interstate Commerce Commission as railway employees, the expenses and salaries paid them by the Railway Company are charged to operating expenses and are reported as such to the Interstate Commerce Commission.

On the basis of the foregoing, I am of the opinion that Mr. Burch's operators are subject to the continuing authority of the Rail­ way Company to supervise and direct the manner of rendition of their services for it; hence they are employees of the Railway Company with­ in the meaning of the Railroad Retirement Act and the services ren­ dered by then to the Railway Company are creditable toward annuities under the Act.

Very truly yours

Lester P. Schoene General Counsel

JJLias July 20, 1 9 3 8