I'm not for sure if Short Lines are goverened by the same FRA rules as Class 1's,but like here on the NS we have several rules on the use of eotd's.
On freight trains running over 30 mph,trains that operate with 4,000 trailing tons or less on a track with an average grade of 2% or greater for at least 2 miles,and for trains with greater than 4,000 trailing tons over a section of track with an average grade of 1% or greater over a distsance of 3 miles,we have to have a linked up eotd (capable of placing the train in emergency from the rear).
Now if you have a local,such as what your talking about ,it's not required if you have the following conditions.
If you switch enroute and operate with less than 4,000 tons and the track is a grade less than 2% or greater for a distance of 2 miles.
Also DP trains do not operate with an eotd,and work trains that have less than 4,000 tons on a grade less than 2% with an occupied caboose with an operational air gauge.
But no matter what all locals and work trains have to go by the rule of at least, " flag by day,light by night ".
Hope this halps explain it a little.