UNITED STATES GOVERNMENT RAILROAD RETIREMENT BOARD Memorandum, sep 1 g L-87-130 TO . Director of Compensation and Certification

FROM • DePuty General Counsel

ciioTrrT Chessie Computer Services, Inc. SUBJECT: Employer Status

This is in response to your Form G-215 dated March 9, 1987, requesting my opinion regarding the employer status of Chessie Computer Services, Inc. (Chessie Computer). The status of this company as an employer under the Railroad Retirement and Railroad Unemployment Insurance Acts has not previously been considered.

According to Moody's Transportation Manual (1986 edition, p. 643), CSX Corporation "has developed unique capabilities in information technology and communications through its systems interests and subsidiaries - Chessie Computer Services, Inc. and Cybernetics and Systems, Inc."!/ However, in a letter dated December 18, 1986, Mr. Paul E. Fleury, Payroll Manager for Chessie Computer Services, Inc., stated that operations were to commence on January 1, 1987, and that Chessie Computer was to have approximately 350 employees, "with the first pay day being January 2, 1986 [sic]." The company is described by Mr. Fleury as "a computer service organization providing computer support to the Chessie Railroad System." In a conversation in August 1987

T7 Cybernetics & Systems was a subsidiary of the Louisville & Nashville Railroad Company (LStN). See Legal Opinion L-79-113 regarding its status as an employer under the Acts. In December 1982, LStN merged into Seaboard System Railroad, Inc. with the latter being the surviving company. On July 1, 1986, Seaboard adopted the name "CSX Transportation, Inc." CSX Transportation, Inc. is a subsidiary of CSX Corporation. This name change did not affect the employer status of the company. See Legal Opinion L-86-126. According to Moody's Transporation Manual (1986 edition, p. 681) , Cybernetics & Systems, Inc. is a wholly-owned subsidiary of CSX Transportation, Inc. There does not appear to be any reason to change the employer status of Cybernetics St Systems at this time; however, any change in the name of the company (Cybernetics St Systems to Cybernetics St Systems, Inc.) should be verified and appropriate changes in the relevant files and listings made. Director of Compensation and Certification with a member of my staff, Mr. Fleury explained that Chessie Computer is comprised of the computer service organization which existed to support Chessie System, Inc. Mr. Fleury stated that he was unable to provide the immediate parent company of Chessie Computer, but his letter of December 18, 1986, was on a Chessie Computer letterhead which bears the printed statement "Chessie Computer Services, Inc. is a unit of CSX Technology", which company in turn also appears to be a subsidiary of CSX Corporation £/. There does not appear to be sufficient evidence available to support a finding that CSX Technology is itself an employer under the Acts.

In any event, although the exact position of Chessie Computer among the subsidiaries of CSX Corporation is unclear £/ , considering information obtained from Moody's Transportation Manual, Standard St Poor's Corporation Directory (Vol. 3, 1987), and the Directory of Corporate Affiliations (1987), as a subsidiary of CSX Corporation Chessie Computer is under common control with one or more employers as defined by section 1(a) of the Railroad Retirement Act.z/ Furthermore, the description of Chessie Computer's operation provided by Mr. Fleury clearly shows that Chessie Computer is performing service in connection with the transporation of passengers or property by railroad.

It is therefore my opinion that Chessie Computer Services, Inc. became an employer under the Acts effective with the date it first commenced operations, January 1, 1987.

27 On November 1, 1980, Chessie System, Inc. merged with Seaboard Coast Line Industries, Inc. to form CSX Corporation.

3/ On August 6, 1987, a computer search was performed to attempt to obtain the parent company of Chessie Computer. The computer program used (Dialog) obtains its information from Dun & Bradstreet. The program information was current as of March, 1987. No listing for Chessie Computer was found.

4/ Some of the companies which are subsidiaries of CSX Corporation and which have been found to be employers under the Acts are: The Chesapeake and Ohio Railway Company, The Home Avenue Railroad Company, CSX Transportation, Inc., Carolina, Clinchfield and Ohio Railway, Fruit Growers Express Company, and Cybernetics & Systems, Inc. This is not a comprehensive list. Director of Compensation and Certification

An appropriate Form G-215 giving effect to the foregoing is attached.

teven lolow

Attachment

RLSimmons:j o:cmw 0252A/Wang VS C. 451-87