HOUSTON (Reuters) - Dow Inc locked 226 employees out of its Houston-area chemical plant in Deer Park, Texas, on Monday afternoon after United Steelworkers union (USW) workers rejected the latest labor contract proposal, USW officials said.

"Our Deer Park site will continue to operate in the safe and reliable manner our neighbors, employees and customers have come to expect of us; but it will be without the United Steelworkers after 2 p.m. on April 22nd," Dow spokeswoman Ashley Mendoza said on Monday.

Dow has twice made contract proposals it called "last, best and final." The first was rejected by 96 percent of the membership and the second by 98 percent, said Lee Medley, president of Local 13-1, which represents the Dow workers.

USW District 13 Director Ruben Garza said overtime distribution as well as fatigue and safety due to understaffing were at the heart of the dispute