Union Pacific (NYSE: UNP) is suing the city of Palestine, Texas, to nullify a 150-year-old contract to keep a certain number of jobs in the town indefinitely.
The agreement between Union Pacific and Palestine — which was signed in 1872 — dates back to the days when the city was at the crossroads of several railroad companies that promised to keep jobs there indefinitely, according to the Palestine Herald-Press.
Union Pacific’s lawsuit, filed Nov. 27 with the U.S. District Courts in the Eastern District of Texas, alleges the railroad’s contract with Palestine should have been invalidated when the federal Surface Transportation Board became the nation’s regulating authority for freight rail in 1996; and again in 1997, when Union Pacific merged with the Missouri-Pacific Railroad.
The agreement requires the Omaha, Nebraska-based railroad to keep 0.52% of its total jobs in Palestine, local officials said.
Union Pacific operates around 32,000 miles of track in 23 Western states. The company had around 37,000 employees as of its last earnings report.
If the courts rule in Union Pacific’s favor, it could threaten more than 60 jobs in Palestine that pay an average of $65,000 a year, local officials said.
Palestine Mayor Steve Presley told the Herald-Press the city would fight the lawsuit.
“The city council will decide on the best course of action, once we have a chance to discuss the lawsuit,” Presley said. “Personally, I will do everything within my power to keep all jobs possible here in Palestine.”
Union Pacific spokeswoman Raquel Espinoza said the 150-year-old agreement is limiting the company’s flexibility with its freight car repair shop in Palestine.
“The agreement keeps us from implementing modern railroad practices in Palestine,” Espinoza said in a statement.
Palestine, in East Texas, has a population of 18,136. It is located around 125 miles equidistant between Dallas and Houston, as well as Shreveport, Louisiana.
In 2014, Union Pacific employed as many as 150 people in Palestine, according to the Tyler Morning Telegraph. They worked in “the car shop and the transportation, signal, track and freight claims departments.”
In April, Union Pacific laid off 30 employees from its car shop in Palestine.
“These steps are part of Unified Plan 2020, which streamlines operations as we ensure Union Pacific remains a strong, competitive company that provides safe, efficient and reliable service,” said Union Pacific spokeswoman Kristen South.
Unified Plan 2020 is Union Pacific’s version of precision scheduled railroading, according to a FreightWaves article Oct. 17.
Mark Strong
Maybe if that car shop hadn’t been shut down, the employee that died in Beaumont a couple of months ago due to bad brakes, wouldn’t have. They are trying everything to make the the efficiency look better than it is, including cutting out safety.
Thomas
How you gonna lay off 30 ppl then sue them for not having 0.52% of jobs in the town. There a crappy company
10 year plus UP employee
As a current employee I can say it doesnt shock me. Union Pacific was voted the number 1 worst company to work for in 2019. Look it up, it’s a real thing.. Sad thing is they actually seem proud of it and when I brought it up I was told hey, at least we’re number 1. Look up the rampant amount of suicides they have had, about one a month for the last few years. They don’t care about families, safety, or anything other then cold hard cash. If I was a share holder, I’d sell your stock. With all the corners they’ve been cutting, Union pacific is going to be heading for a huge disaster real soon.
Billy Buckner
Ya, much much much more in profits each quarter. You know what that means? More lay offs!! One way to stop it, they call it a STRIKE!!!! We are the reason they make billions in profits each quarter. Have they ever shared the wealth to make you feel valued? Hell NO…. more lay offs. I pray the court makes them continue to keep the jobs as the snakes promised. Everyone should unite to walk off before the lay off!
Darrin Harasimowicz
The union Pacific destroys families and everything that they worked for and everything that America is all about. Corporate greed that’s all it is. Enough is never enough for share holders despite their 1 billion dollar profit in the black I might add every quarter and maybe more. Someone must stop this greed machine.
Allan J Love Sr
I say let them keep their jobs and keep the promise.
UP Mechanical
Not surprised UP is doing this. With all the lay offs taking place last year just to increase their profit margins and raise their stock price, investors of UP are the only winners here. Shame to see this company being destroyed by money pushers to a point where the rail road will ask for a bailout aid from us, the tax payers, in the coming years.
Robert Jack
This company is all about money I use to work for them I got hurt on the job two back surgeries and a knee replacement nobody from that company call are check on .e and my family.
Andrew Squiggman
Anything for a buck. The investor class will ruin a 150 year old industry just to profit themselves. 2008 only emboldened them to take more from the economy at any cost. Too bad there is no way to stop them.