In 1872, the International Railroad and the Houston and Great Northern Railroad met in the East Texas town of Palestine, Texas and merged the following year into the International and Great Northern Railroad (IGN). An agreement signed in the East Texas crossroads back in 1872 required the railroads to base 0.52% of their workforce in the town and to keep jobs there indefinitely.
Move the clock ahead over a century later to the 1990's. Since the original agreement, the small regional railroad IGN became part of the Missouri Pacific Railroad, then ultimately was merged into Union Pacific Railroad. In 1997, Union Pacific, now a much larger railroad covering half the nation, tried unsuccessfully to nullify the local contract with the city.
Back for another try, on November 27th, and armed with the argument that the local agreement is invalid because railroads are regulated by the federal government, and the deal requiring jobs be maintained in Palestine improperly limits its options, Union Pacific filed suit in U.S. District Courts in the Eastern District of Texas.
Union Pacific has good reason to want to throw out the ages-old agreement that requires 0.52% of its workforce be based in Palestine, according to rail followers. With about 37,000 employees as of its last earnings report Union Pacific would be required to hire almost double the 100-some employees now based at Palestine shops under the 150-year-old contract.
Railroad spokesperson Raquel Espinoza said the agreement is limiting Union Pacific’s flexibility with its freight car repair shop in Palestine. “Union Pacific is improving operations to meet customer needs. The agreement keeps us from implementing modern railroad practices in Palestine, Texas,” Espinoza said.
The lawsuit claims the agreement should have been invalidated when the Missouri Pacific merged with other railroads in the 1970s and when the federal Surface Transportation Board was given the power to regulate railroads. The Interstate Commerce Commission was replaced by the Surface Transportation Board as the nation's freight rail regulatory agency in 1996 and was the agency of record in 1997 when Missouri-Pacific merged into the larger Union Pacific.
Jumping into the fray are two Texas legislators. State Rep. Cody Harris (R-Corsicana) and state Sen. Robert Nichols (R-District 3) In a letter they have urged Union Pacific “to uphold the current contract and abandon its attempt to break this long-standing agreement. Breaking the agreement or convincing a court to nullify the contract would have a devastating impact on our local economy and the 60 families who’ve devoted their lives and their careers to Union Pacific.”
The UP website notes that the "Palestine Car Shop is one of only two car shops on the Union Pacific Railroad that perform heavy modifications and repairs to freight cars. The Palestine workforce of more than 100 employees has earned a reputation for safely and efficiently delivering quality work to their customers -- known as “Palestine Pride.”
Union Pacific operates around 32,000 miles of track in 23 Western states.