A new law championed by Hawaii’s most powerful unions has tilted the balance in favor of organized labor in a critical arena, although the effects on employers — and possibly taxpayers — won’t be fully realized for a few years.

With little public fanfare, the Legislature last session passed a bill that changes how the governor appoints people to the Hawaii Labor Relations Board, a quasi-judicial agency that resolves labor disputes involving private and public sector employees and the organizations that represent them.

The board hears everything from complaints over collective bargaining to improper firings and other prohibited practices. Its authority is particularly important in Hawaii, one of the most unionized states with 14 bargaining units representing roughly 116,000 public workers.

Labor board hearing Aug 31

The Hawaii Labor Relations Board meets to hear a complaint from the teachers union in 2011.

Nanea Kalani/Civil Beat

Union leaders and Hawaii officials — including the state budget chief and attorney general — carefully scrutinize the board’s makeup because it can make decisions with far-reaching financial implications.

The board is comprised of three members. The public member, James Nicholson, serves as chair, Sesnita Moepono represents management and Rock Ley holds a seat on behalf of labor.

Until lawmakers changed the rules this past session, public employers and union reps could each submit names of people they felt the governor should consider for appointment. The names were ultimately just recommendations, leaving the governor with final say over who to appoint, as long as his choices were confirmed by the Senate. But both sides had an equal opportunity to make suggestions.

The new law now requires the governor to choose the labor member from a list of three names provided by the unions. Labor leaders and public employers can both suggest people to fill the management seat, but the governor is not bound to choose from either list. 

State lawmakers easily passed House Bill 2496 after it was introduced by Republican Rep. Aaron Ling Johanson and eight Democratic reps. Only Republican Sen. Sam Slom voted against it.

The bill “ensures — rather than hopefully allows — equal representation, fairness, and a direct say on the labor representative to the board.” — HGEA Executive Director Randy Perreira

Gov. Neil Abercrombie let it become law in April without his signature, noting the concerns his department heads raised when it was moving through legislative committees earlier this year. He encouraged the Legislature to further review this issue next session, which starts in January.

The most influential public unions — including the Hawaii State Teachers Association, which represents about 13,500 employees, and the Hawaii Government Employees Association, the state’s largest union with nearly 43,000 members — ushered the legislation to passage, even submitting language that lawmakers adopted in their final version.

HSTA President Wil Okabe said it’s in the best interest of public sector workers to have someone on the board “who has no political ties” and that this would be accomplished if the governor had to choose the labor member from a list submitted by the unions.

The board, which receives on average one case a week, was in the news a lot when HSTA filed a complaint in July 2011 after Abercrombie unilaterally implemented his administration’s “last, best and final” contract offer — which involved cuts to teacher pay and benefits. 

That case dragged on until a four-year contract deal worth $350 million was reached in April 2013. It’s unknown how the labor board would have ruled because HSTA withdrew its complaint a month later as part of the deal, but the members sitting on the board were no less important for other reasons.

The teachers union grew increasingly frustrated over the board’s delay in making a decision after the hearings for the case ended in May 2012. As long as the board held off, HSTA couldn’t strike, which union officials argued gave the state negotiating team an upper hand when contract talks resumed.

To top it off, the board, heeding a complaint from the state, decided to dismiss the case with prejudice, meaning HSTA can’t bring it back again.

“Either both sides should have this right or neither side should have it. Any other result renders the labor-management relationship unbalanced.” — Attorney General David Louie

HGEA Executive Director Randy Perreira helped drive the proposed change to the law, testifying on the measure at every opportunity. 

He told lawmakers the bill “ensures — rather than hopefully allows — equal representation, fairness, and a direct say on the labor representative to the board.”

The Hawaii Chamber of Commerce, Attorney General David Louie and Finance Director Kalbert Young fought the effort by pointing out the bill’s many deficiencies, but were only able to slightly water it down.

“We do not believe that it serves the public interest to permit one side of the labor-management relationship to have a say in appointing members to the other’s seat, while denying that same countervailing right to the other party,” Louie said in his testimony. “Either both sides should have this right or neither side should have it. Any other result renders the labor-management relationship unbalanced.”

The Chamber told lawmakers to amend the bill to give equal treatment to all sides as far as selecting appointments goes.

Young said the Department of Budget and Finance “has grave concerns with the proposed components of this bill and opposes this measure as counter to the sound business interest and operations of the state.”

But it wasn’t just the general philosophy of the legislation that the attorney general and finance director disagreed with. It was also its mechanics.

Young described the legislation as being so vague as to lack “any practicality of direction” as to how it could be applied. 

The new law sets the framework for Hawaii’s next governor to make big, lasting decisions on who to appoint.

At one point, under pressure from United Public Workers, which represents 11,000 public workers and 1,500 private sector employees, the law would have forced the governor to choose the management seat from a list of names provided by the counties. Young noted that, even combined, the counties have far fewer public employees than the state so it would be unfair to give them such an outsized voice in the decision.

In the end, that part was amended to allow each of the four counties to suggest one person that the governor should consider. 

One of the final iterations of the bill would have likely backfired on the unions, as the attorney general pointed out. The legislation almost mandated mutual agreement by all the unions on the list of names to submit to the governor.

That was changed though to require a majority of the unions to agree, but it is still unclear what mechanism is to be used for the organizations’ “exclusive representatives” to decide who they want the governor to appoint.

The new law really becomes important when the next appointments are made to the board — decisions that will come from the next governor. 

The six-year term for Ley, the board member representing labor, ends June 30, 2017. Moepono’s term ends June 30, 2016, and Nicholson’s term ends June 30, 2015.

The appointments will be big, lasting decisions, and it won’t be Abercrombie making them since he lost his bid for re-election in the August primary.

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