Union Pacific Railroad met with staff members in Palestine in April and told them they have 60 days until the Palestine Car Facility closes on June 14, according to longtime employee Brad Henry.
Henry said the employees were asked to a meeting with UP management at the Hilton Hotel in Palestine. They were given notice and then told they could take the rest of the day off and report back to work Monday, April 19.
“While Union Pacific is closing our Main Car Repair Facility in Palestine, limited car repair activities will continue in the Palestine area,” Tysver said. “We did not take today’s step lightly, but we are determined to do the right thing for the thousands of customers, employees and communities who rely on us to help build sustainable economic growth across the western two-thirds of the United States. We appreciate the support we have received over the years in the communities of Palestine and Anderson County, as well as the hard work and dedication of our employees. We are working with those impacted to help them with job placement activities.”
In November 2019, Union Pacific filed suit in federal court to scrap its 1954 agreement with the city. The federal courts ordered Union Pacific and the city of Palestine to find a mediator by April 2020 to negotiate a compromise between the two sides. Jeremy Kernodle, federal judge for the Eastern District of Texas, denied the city’s motion to dismiss Feb. 3.
The county had 30 days from March 25 to file an appeal, with the Fifth Circuit Court of Appeal in New Orleans after a federal judge ruled Feb. 3 that Union Pacific Railroad is no longer bound to its its 1954 agreement with the city of Palestine and Anderson County.
Johnston said the county would file a letter of rehearing in response and, if denied, would then file an appeal to the Fifth Circuit Court of Appeals. The county will also ask for an injunction, which the judge may or may not sign, Johnston said.
“This has nothing to do with the property tax the railroad pays us,” Johnston said. “This has everything to do with saving the livelihood of the employees and doing what is right for them. That railroad is still going to be here, but those jobs and their retainment are what matters most.”
Through the original 1872 contract, Union Pacific agreed to establish a railroad hub in Palestine with offices, machine shops and roundhouses. The contract also stipulated that Union Pacific will retain a facility and certain number of employees in Palestine — that fluctuates daily based on the companies total amount of employees. In return, the city agreed to raise $150,000 in bonds for the railroad.
The city filed documents with the court trying to stop Union Pacific from pulling out its car shop and administrative offices from Palestine based on the original agreement that had been modified several times over the years, the last being in 1954.
Union Pacific argued that the agreement was in violation of federal law and could not be enforced. The court has agreed with the railroad and ruled the city does not have the right to stop them.
In the current lawsuit, the city does not assert that Union Pacific has breached the 1954 Agreement. Instead, Union Pacific alleges that the Interstate Commerce Commission Termination Act of 1995 preempts the 1954 agreement and asked the court to void its obligations to Palestine.
Under this system, federal law supersedes conflicting state laws. Thus, any state law that conflicts with the Constitution or a federal law is preempted, or without effect.
Based on the plain language of the act, the court determined that the 1954 agreement between the city and the railroad is expressly preempted.
Here comes the District Judge
District Judge derails Union Pacific’s plans for closure
In June the city of Palestine and Anderson County battled Union Pacific in the 369th District Court in Cherokee County presided over by Judge Michael Davis on Monday in ongoing litigation with regard to the 1955 judgment between the parties.
While several merits of the lawsuits were addressed by attorneys representing both sides, Davis reserved any ruling on those merits to a later date, if necessary.
The city and county filed a show cause motion on Wednesday, June 9. However, no ruling was made on that motion. Union Pacific was found to be out of compliance with the 1955 judgment requiring Union Pacific to provide employment numbers and payroll reports on a monthly basis to the city. Union Pacific has been out of compliance with this since December 2020.
Davis ruled Union Pacific could not eliminate any jobs until after a hearing set for Thursday, July 8 to determine whether the company has complied and provided that information.