PALESTINE, Texas — Union Pacific on Monday notified employees at its Palestine, Texas, car shop that their current jobs would be eliminated following the latest ruling in a long-running court battle over an agreement dating to 1872.
The Dallas Morning News reports the railroad notified the 57 employees it would close the shop after the Texas Supreme Court on Friday turned down a request by Anderson County to rehear the case. The county and city were seeking to overturn a lower-court ruling last year that a 1954 agreement between predecessor Missouri Pacific and the city of Palestine and Anderson County is unenforceable [see “Union Pacific gets state-court win …,” Trains News Wire, March 10, 2024].
The 1954 agreement was an update of one from 1872 in which MP predecessor Houston & Great Northern Railroad agreed to “forever” keep its shops and headquarters in Palestine in return for funding support. The 1954 update required a certain percentage of the railroad’s jobs to be maintained in Palestine, but UP sued in 2019 to end the agreement. A federal court voided the agreement in 2021 [see “Digest: Federal judge voids UP employment requirement …,” News Wire, Feb. 5,2021], but state-court rulings and appeals have kept the shop open since.
Anderson County attorney Jim Allison told the Morning News the closure notice was premature because the state Supreme Court had not yet issued its mandate finalizing the decision, and that the county would be filing a motion to stay that mandate while it appeals to the U.S. Supreme Court. “There are federal issues involved in this case,” Allison said.
The railroad said the shop’s employees would be offered jobs elsewhere on the UP system.
“Rail is essential to Texas and the U.S. economy,” it said in a statement to the newspaper, “and this decision allows us to better align our resources to serve our customers.”
UP has argued the earlier agreement restricts interstate commerce in violation of federal law.
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