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Union Pacific sues Texas town over 1870s-era jobs promise

Union Pacific wants a court to invalidate an 1872 jobs pact with the Texas town of Palestine. The photo is a Union Pacific locomotive traveling through Texarkana, Texas, in 2018. Image: Union Pacific

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.


21 Comments

  1. Danger

    Stay strong Palestine,Tx. I worry everyday if I’m going to lose my job. We had 120 people when I started now we have 40. Corporate greed . I hope they choke on it

  2. Thall

    This company only honors what serves them they are always trying to use old Katy railroad agreements ,that went away when they merged with the mop, this is the most morally corrupt company that exists, cutting jobs, while lance fritz spent 5 million renovating his office, absolutely shameful

  3. Ed

    UP should honor the agreement. I don’t care if it is 150 years old. I wonder when Americans are going to get as angry about their government confiscating 50% of their pay a wasting it?

  4. Brian Butler

    When is enough enough? These big companies are all about there stocks and could care less about the people they affect. This has got to stop

Comments are closed.

Noi Mahoney

Noi Mahoney is a Texas-based journalist who covers cross-border trade, logistics and supply chains for FreightWaves. He graduated from the University of Texas at Austin with a degree in English in 1998. Mahoney has more than 20 years experience as a journalist, working for newspapers in Maryland and Texas. Contact [email protected]