Union Pacific (NYSE: UNP) is suing the city of Palestine, Texas, to nullify a 150-year-old contract to keep a certain number of jobs in the town indefinitely.
The agreement between Union Pacific and Palestine — which was signed in 1872 — dates back to the days when the city was at the crossroads of several railroad companies that promised to keep jobs there indefinitely, according to the Palestine Herald-Press.
Union Pacific’s lawsuit, filed Nov. 27 with the U.S. District Courts in the Eastern District of Texas, alleges the railroad’s contract with Palestine should have been invalidated when the federal Surface Transportation Board became the nation’s regulating authority for freight rail in 1996; and again in 1997, when Union Pacific merged with the Missouri-Pacific Railroad.
The agreement requires the Omaha, Nebraska-based railroad to keep 0.52% of its total jobs in Palestine, local officials said.
Union Pacific operates around 32,000 miles of track in 23 Western states. The company had around 37,000 employees as of its last earnings report.
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