Union Pacific moves closer to abandoning 1872 jobs pact with Texas town

Union Pacific Railroad is one step closer to eliminating its workforce in the East Texas town of Palestine after action by the Texas Supreme Court Friday.
The court dismissed a petition by Anderson County to weigh in after a February state court ruling. The decision clears the path for Union Pacific to close its heavy freight repair shop and eliminate 57 railroad jobs the company has been compelled to keep in Palestine by an 1872 agreement.
Anderson County will file a motion asking the court to reconsider within 30 days, county attorney Jim Allison said. Such motions are usually denied.
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“That’s pretty much the final step in an appeal so we’re coming to some resolution on this, but we’re still hopeful that the Supreme Court will pay attention to this issue,” Allison said.
Closure of the shop means Palestine will lose some of its highest-paying jobs. Union Pacific is among the top 20 employers in the city of 18,000.
Palestine has long been defined by its relationship with railroads. Equidistant from Dallas, Houston and Shreveport, the city is a major interchange point for state rail, with main lines running south to the border of Mexico. In 1872, Palestine and Anderson County raised $150,000, about $5 million today, in bonds for the Houston and Great Northern Railroad Company, a distant corporate predecessor of Union Pacific. In exchange, the railroad agreed to build a depot and “forever thereafter keep and maintain” its headquarters, machine shops and roundhouses in Palestine.
The jobs pact was updated in 1954, and the railroad workforce in the town has dwindled amid mergers and restructuring. Union Pacific once employed more than 1,000 in Palestine.
The railroad has said in court filings that it can “conduct its work more efficiently in other locations” rather than sending freight cars thousands of miles out of the way for repair to the “severely outdated” shop. Union Pacific argues the jobs pact restricts interstate commerce in violation of federal law.
“Rail is essential to Texas and the U.S. economy, and this decision allows us to better align our workforce to serve customers,” a company spokesperson said in an email Friday. “Our timeline for closing the Palestine shop is still being determined. We will be in communication with those impacted to offer other employment opportunities across the railroad.”
Critics in Palestine have said the move to close the shop is part of a broader industry shift to prioritize profit margins at the expense of workers and safety. Union Pacific said in 2021 that the closure was part of an improvement plan to implement precision scheduled railroading principles across its system, the Palestine Herald-Press and other media reported.
Railroads have faced increased scrutiny from regulators following the East Palestine, Ohio derailment in 2023. Longer trains operated under precision scheduled railroading principles present more operational complexities at a time of widespread job cuts across the rail industry. Staff levels at Class I railroads, the largest, declined about 28% between 2011 and 2021.
Palestine mayor Mitchell Jordan said he’s focused on bringing other high-paying jobs into the city.
“We fought and I do truly believe it was worth the fight to save people’s livelihoods, but if for some reason things don’t go our way, Palestine is open for business regardless,” Jordan said.
The Texas Association of Counties filed a brief urging the court to hear the case, saying the issues raised “are of great significance to local governments in Texas that rely on the enforceability of state court judgments via contempt proceedings.” A court judgment ordering Union Pacific to comply with the jobs agreement is at the center of the case.
The ruling compelling Union Pacific to maintain jobs in Palestine will remain in effect until the Supreme Court decides on the rehearing motion and the case is returned to the appeals court to issue a mandate, Allison said. The court typically rules within 60 days.