PALESTINE, Texas — The city of Palestine and Anderson County, Texas, are asking a federal court to rehear their case attempting to uphold a 1954 agreement, with roots dating to 1872, which requires Union Pacific to maintain a set number of jobs in Palestine.
A July ruling by a three-member panel of the U.S. Appeals Court, Fifth Circuit, in New Orleans, voided the agreement, saying it was preempted by federal law.
The Palestine Herald-Press reports the attorney for the city and county filed a motion on Aug. 8 asking the court rehear the case with all judges present, rather than just the three-judge panel that ruled on July 22. Attorney James Allison argues in the brief that Congress did not intend an agreement entered decades before to be retroactively preempted.
UP went to court in 2019 seeking to void the employment provision [see “UP sues to end employment provision …,” Trains News Wire, Dec. 2, 2019] and, upon receiving a favorable court decision in February 2020, announced plans to close its car shop in the community, eliminating 57 jobs [see “UP moves forward with closure …,” News Wire, June 9, 2021].
But subsequent rulings by a Texas judge upheld the agreement and kept the shop open [see “Judge again blocks closure …,” News Wire, July 9, 2021], leading UP to ask the federal court whether the agreement was enforceable based on today’s law.
The July 22 ruling found that the mandate to stay in Palestine imposes “burdens” on UP including requiring it to maintain operations in Palestine when it could more efficiently operate elsewhere; routing cars thousands of miles out of the way for maintenance; and use of facilities in Palestine that are in need of $67 million to $93 million in improvements.
Falls City, Neb., donated land to get the Missouri Pacific to locate its division headquarters there in the early 1900s. After it was moved out in the 1960s the city sued to get the land back but was unsuccessful. Court said the condition tying the land to maintaining the HQ there was an unreasonable restraint on alienation. There was also a court case involving Parsons, Kan., attempting to keep Katy from moving jobs out of there. They were also unsuccessful.
Not sure what to think of all this. If one company buys or merges with another, don’t they assume all the assets, liabilities, contracts,etc., of the one being taken over or merged with? What exactly is the wording of the two previous agreements? And what were the requirements of the merger for it to be approved?
I think back to when I hired out with CSX thinking I was going to work for CSX. I was completely surprised in filling out my initial paperwork that as far as labor agreements I was working for the B&O. A list of “Fallen Flag” railroads were offered to check off. That has all since been done away with over time with new labor agreements and retirements.
Sorry Mr. Stamey I can’t agree with your thinking. This agreement was from two predecessor railroads. They want to uphold an agreement from 1954 but dating back to 1872. UP either brought or had merger with these roads. What if the car shop was destroyed by fire or flood. Would UP have to spend millions to rebuild it to keep these workers employed? So would that mean if I buy a business I could not change things that the other owner set up with employees?
Fire or flood would be considered “acts of god.” And yes, if you bought a business that included legally binding labor agreements, you could not change them unilaterally. You would have to negotiate them.
Had a hunch Palestine would lose this suit. But, all those jobs are worth them taking this all the way to the supreme court.