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To: All BNSF Customers

Update on National Labor Agreement

Dear Customer,

As I wrote to you on October 6, 2011, President Barack Obama established Presidential Emergency Board 243, under the provisions of the Railway Labor Act, to investigate and recommend settlement terms in the major freight railroads’ bargaining dispute with 11 of the 12 unions representing our employees. You may recall that we had previously reached agreement with our largest union, the United Transportation Union (UTU), which makes up about 30% of our scheduled workforce.

On Saturday, November 5, the PEB issued its report and recommendations. Although the PEB recognized the UTU Agreement as an important precedent, we are concerned with some of the terms in their recommendation; however, BNSF is willing to settle our differences with the unions as the PEB recommended. Toward that end, along with the other railroads involved in the bargaining process, we will work over the next several weeks to enact the PEB recommendations with all 11 unions. We believe it is in your best interest and in the best interest of the fragile U.S. economy, that this labor dispute be resolved without any disruption to your business.

Under the Railway Labor Act, the release of the PEB’s report to the president started the clock running on the final, 30-day "cooling off" period in this process. During this time, all parties remain forbidden to engage in any job action or other self-help. We are confident the railroads will reach the agreements needed to avert a service interruption before the cooling off period ends at 12:01 a.m. on Tuesday, December 6.

Congress passed the Railway Labor Act over 85 years ago. Since then, the vast majority of rail labor disputes have been peacefully resolved through its mechanisms. Even in those disputes, which went all the way to a PEB, Congress has been called upon to intervene only 8% of the time (14 out of 179 cases). The last time in our experience was in 1992 when the industry was shut down for one day before Congress passed final and binding back-to-work legislation.

We will keep you informed as to the progress of the settlement discussions.

John Lanigan
Executive Vice President and Chief Marketing Officer

If you have any questions, please send an email to