As many as 57 employees could be laid off by mid-June at a Union Pacific (NYSE: UNP) maintenance facility in Palestine, Texas.
Union Pacific (UP) confirmed that it recently told employees that it would be closing the main car repair facility in Palestine as part of its broader effort to make operational changes across the railroad’s network. Although UP didn’t specifically mention precision scheduled railroading in its statement, it said the operational changes were part of a “continuous effort to provide rail service” to customers.
Limited car repair facilities will continue in the Palestine area, UP also said.
“We did not take this step lightly but we are determined to do the right thing for the thousands of customers, employees and communities who rely on us to help build sustainable economic growth across the western two-thirds of the U.S.,” UP said in a statement. “We appreciate the support we have received over the years in the communities of Palestine and Anderson County, as well as the hard work and dedication of our employees. We are working with those impacted to help them with job placement activities.”
What is unique in this situation is that UP and Palestine had a long-standing agreement for UP to maintain a presence in Palestine. The two parties signed an agreement in 1872 in which UP would keep 0.52% of its total jobs in Palestine. The agreement was made at a time when the city was at the crossroads of several railroad companies that promised to keep jobs there indefinitely, according to a November 2019 FreightWaves article quoting local news reports.
But UP sued the city and Anderson County in November 2019, saying the Interstate Commerce Commission Termination Act, or ICCTA, preempted the agreement.
Federal Judge Jeremy D. Kernodle of the U.S. District Court for the Eastern District of Texas sided with UP in a Feb. 3 decision, denying the city’s and county’s request to dismiss the case and granting UP’s motion for a summary judgment.
Anderson County Judge Robert Johnston told FreightWaves that the county plans to appeal the decision sometime within the next week.
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