Union Pacific

The federal court has ordered Union Pacific and the city of Palestine to enter into mediation.

With no settlement in sight for an ongoing lawsuit between the city of Palestine and Union Pacific, four Palestine UP truck shop employees on Thursday were furloughed without warning. Those furloughs came in addition to about 30 local layoffs the company made a year ago, bringing the number of local UP jobs down to about 60.

Truck shop employee Justin Harris told the Herald-Press Thursday that he and three others were told, without previous notification, they were furloughed.

In November, Union Pacific filed suit in federal court to scrap its 150-year-old contract with the city. The contract stipulates that Union Pacific retain a facility and a certain number of employees in Palestine.

The railroad argues it has the right to abrogate the contract to maintain efficient operations. In late April of last year, the company laid off about 30 local workers.

The contract requires Nebraska-based Union Pacific to employ 0.52 percent of its total workforce in Palestine. After cutbacks and layoffs at UP, roughly 65 jobs, earning an average of about $60,000 each, had remained in Palestine. This week's furloughs mean the loss of an additional four jobs.

Local layoffs are part of a companywide reduction in employees, including most employees at the North Little Rock, Ark., Locomotive shop and workers in the car shop in De Soto, Mo. The railroad also temporarily closed its Jenks Locomotive Facility in Arkansas. It hopes to reopen by June 1, after reassessing economic conditions.

In March, federal courts ordered Union Pacific and the City of Palestine to find a mediator by April to negotiate a compromise. Both parties have until August to find middle ground. They then have until January – 28 days before a potential trial – to settle the matter.

If a compromise is not reached before then, Union Pacific's case against Palestine and Anderson County is scheduled to be heard in federal court next February.

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