Union Pacific Railroad is suing the city of Palestine to scrap a 150-year-old contract that now guarantees the employment of dozens of local residents.
If the courts rule in Union Pacific's favor, it would threaten more than 60 jobs that pay an average of $65,000 a year. The local economy would take an annual hit of nearly $5 million.
The lawsuit, filed Wednesday, alleges the railroad's contract with Palestine should have been invalidated several times over the years, including in the 1970's, when the federal Surface Transportation Board became the nation's regulating authority; and in 1997, when Union Pacific merged with the Missouri-Pacific Railroad.
Railroads are federally regulated, railroad officials argued, and the local contract limits the company's options.
Palestine Mayor Steve Presley, who has negotiated with the Omaha, Nebraska-based railroad, told the Herald-Press Friday 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.”
Multiple attempts to contact City Manager Leslie Cloer were unsuccessful.
Palestine has already lost 30 of the nearly 100 local Union Pacific jobs, after the railroad in May contested how the contract defined “local jobs.” The city challenged the layoffs but, after more than a month of talks and negotiations, mediators ruled in the railroad's favor.
By contract, since 1872, the railroad giant has guaranteed a certain percentage of its jobs would remain in Palestine. The agreement was amended several times over the last 150 years; the current iteration calls for the railroad to retain slightly more than 0.5 percent of its national workforce in Palestine.
Operating more than 30,000 miles of track throughout the western half of the country, Union Pacific employed an average of more than 35,000 employees last year. It also, however, filed an earnings report 13 percent lower than 2017.
Union Pacific spokesperson Rachel Espinoza said the railroad is streamlining its operations, and the contract is limiting Union Pacific's flexibility with its Palestine freight car repair shop.
“The agreement keeps us from implementing modern railroad practices in Palestine,” she said.