In re United Public Workers, AFSCME, Local 646

Citations: 131 Haw. 142; 315 P.3d 768; 2013 WL 5823732; 197 L.R.R.M. (BNA) 2418; 2013 Haw. App. LEXIS 620Docket: No. 29382

Court: Hawaii Intermediate Court of Appeals; October 30, 2013; Hawaii; State Appellate Court

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Petitioner-Appellant United Public Workers (UPW) challenges a September 29, 2008, Final Judgment by the Circuit Court of the First Circuit, which reversed a ruling from the Hawaii Labor Relations Board (HLRB) regarding UPW’s petition for a declaratory ruling on whether certain actions by public employers constituted 'prohibited practices' under Hawaii’s public sector collective bargaining law. The Circuit Court concluded that the HLRB lacked jurisdiction for its Decision No. 470, thereby not addressing the merits of the case. The appeal centers on whether this conclusion was erroneous. The court determined that the HLRB did possess jurisdiction over the UPW petition, leading to the vacating of the Circuit Court’s Order and Judgment. The legal framework governing this matter is established in Hawaii Revised Statutes (HRS) Chapter 89, which grants public employees rights related to self-organization and collective bargaining, and defines 'prohibited practices' that employers must not engage in. HRS § 89-14 affirms the HLRB's exclusive original jurisdiction over controversies related to these prohibited practices, allowing such disputes to be submitted similarly to unfair labor practices outlined in HRS § 377-9. This includes the process for filing complaints and serving respondents.

A respondent may file an answer to an original or amended complaint, but if no answer is filed or if the answer does not specifically deny, explain, or state lack of knowledge regarding allegations, the board may deem those allegations true. The respondent has the right to appear and testify at the scheduled hearing, which may be conducted by the board or a designated hearings officer. Following the hearing, the board will issue a decision that includes findings of fact and determines the rights of the involved parties. The board can issue interlocutory orders, enforceable like final orders, pending the resolution of the case. Final orders may include dismissing the complaint, requiring cessation of unfair labor practices, suspending rights for up to one year, or mandating affirmative actions such as employee reinstatement and financial compensation. Employers or employees committing repeated unfair practices may face civil penalties up to $10,000 per violation, with the board considering the severity of the practice and its effects on involved parties. Aggrieved individuals can seek judicial review of the board's decisions in the appropriate circuit court, specifying grounds for review and serving copies to relevant parties. The court may affirm, modify, or overturn the board's order, but objections not raised before the board are generally not considered unless extraordinary circumstances apply. The court will overlook procedural errors unless they have prejudiced the complaining party. Initiating review proceedings does not automatically stay the enforcement of the board's decisions, though a stay may be granted under appropriate conditions. Compliance with procedural requirements is sufficient for the board's decisions to be valid, and complaints must be filed within ninety days of the alleged unfair practice.

Hawaii’s Administrative Procedures Act, specifically HRS § 91-8 (2012), allows any interested person to petition an agency for a declaratory order concerning the applicability of statutory provisions or agency rules. Agencies must establish rules for petition formats and procedures, with orders having the same legal status as other agency orders. The HLRB has specific rules for declaratory rulings outlined in HAR § 12-42-9, permitting public employees, organizations, or interested parties to file petitions. Requirements for petitions include the petitioner's contact information, a statement of interest, designation of the applicable provision, a concise statement of contention, a memorandum of legal authorities, and signatures. Non-compliant petitions may be rejected, and the board can refuse to issue a declaratory order for good cause, such as speculative questions, lack of standing, potential adverse effects on the board, or lack of jurisdiction. The board must respond to petitions within a reasonable timeframe, either issuing a declaratory order or denying the petition with reasons. Orders are limited to the specific facts presented and hold the same authority as other board orders.

The context includes HLRB proceedings initiated by UPW with a petition filed on January 23, 2007, concerning subpoenas issued by public employers, which UPW claimed infringed on public employees' rights under Section 89-3, HRS. Multiple parties, including the State and the City, intervened in these proceedings. The Circuit Court later reversed Decision No. 470 on the grounds that the Board exceeded its authority.

On February 21, 2007, the HLRB raised concerns about its jurisdiction and encouraged UPW to submit an amended petition for clarification. Subsequently, on February 28, 2007, the State filed a Motion to Dismiss the Petition for Declaratory Ruling, arguing that the HLRB lacked jurisdiction because: (1) the Petition sought rulings on subpoenas from arbitrators and courts, beyond HLRB's authority, and (2) the factual basis was speculative, involving unlikely future events. UPW filed a First Amended HLRB-12 Petition on March 12, 2007, asserting its role as the exclusive representative of certain employee bargaining units and detailing subpoenas received from public employers seeking records related to union grievances and activities. UPW contended that such actions violated Section 89-3, HRS, which guarantees public employees the right to join and assist employee organizations without employer interference. The Amended Petition requested clarification on the applicability of Sections 89-3 and 89-13(a)(1), HRS, regarding the employers' actions. During a hearing on March 20, 2007, the HLRB denied the State’s motion to dismiss, concluding that the Petition related to the interpretation of employee rights under HRS § 89-3, thus falling within its jurisdiction. The Employers countered, arguing that the Amended Petition sought to limit their discovery rights and establish a union work product privilege, areas they claimed were outside the HLRB's authority. UPW maintained that the HLRB was mandated to interpret prohibited practices under HRS § 89-3 and § 89-13. On June 29, 2007, the HLRB issued Decision No. 470, detailing instances where the Employers had issued subpoenas to UPW during grievance arbitrations and discussing the legal questions raised by UPW’s Amended Petition.

The Board majority reviewed the rationale behind grievance arbitrations and previous rulings in light of the Employers' concerns, concluding with a broad summary lacking specific factual grounding. In response to the UPW's inquiry about the mandatory disclosure of union information, the Board reached three key conclusions: (1) Employer demands violating rights protected by Chapter 89 are considered prohibited practices, (2) pretrial discovery and disclosure must comply with HRCP Rule 26, and (3) any determination of a prohibited practice due to employer information demands will depend on specific factual circumstances. 

Decision No. 470 outlines nine Conclusions of Law, including: (1) the Board's jurisdiction over the petition under HRS § 89-5(b)(5), § 91-8, and HAR § 12-42-9; (2) HRS § 89-13(a)(13) prohibits public employers from willfully interfering with employees' rights; (3) HRS § 89-3 grants employees the right to self-organization and collective bargaining while protecting them from coercive actions. The Board determined that employer conduct that interferes with these rights violates HRS § 89-13(a)(1), with the test focusing on whether employer actions reasonably tend to hinder the exercise of employee rights. It affirmed that an employee's pursuit of grievance correction is lawful protected activity.

Furthermore, the Board specified that employers seeking access to union grievances, employee discipline records, or union communications may unduly interfere with employees' statutory rights. Subpoenas for union membership records can also obstruct employees' rights to engage in concerted activities. Ultimately, Decision No. 470 concludes with a Declaratory Order stating that public employer efforts to obtain various union records may interfere with employees' rights under HRS § 89-3 and could potentially constitute a prohibited practice under HRS § 89-13(a)(1).

The State filed a timely notice of appeal to the Circuit Court regarding the Hawai'i Labor Relations Board’s (HLRB) Decision No. 470, with the City joining the appeal. The Employers argued for reversal or vacatur of the Board's decision on several grounds: 1) the Board did not issue a written order denying the State’s motion to dismiss the Petition, nor did it provide separate findings and conclusions, violating HAR § 12-42-8(g); 2) the Board acted beyond its jurisdiction by making rulings on subpoenas and discovery that should be left to arbitrators and courts; 3) the Board improperly instituted a blanket prohibition against obtaining certain records relevant to arbitration or civil proceedings; and 4) the Board erred by not granting the State’s motion to dismiss based on jurisdictional grounds.

Following further briefs and oral argument, the Circuit Court reversed the Board's decision, stating it exceeded its authority. An initial appeal was dismissed for lack of jurisdiction, but a new judgment was entered on September 29, 2008, with a timely notice of appeal filed. On appeal, the UPW raised four errors, claiming the Circuit Court: 1) exceeded judicial review limits by not deferring to the Board's discretion; 2) erred in reversing a decision that was not palpably erroneous or inconsistent with HRS § 89-3 and § 89-13(a)(1); 3) incorrectly determined that the HLRB exceeded its authority regarding the application of Decision No. 470; and 4) wrongly found that the HLRB lacked exclusive original jurisdiction over prohibited practices by employers.

The court's review of the Circuit Court's decision is a secondary appeal, requiring the appellate court to ascertain the correctness of the Circuit Court's ruling based on HRS § 91-14(g). This statute outlines conditions under which an agency's decision may be affirmed, modified, or reversed, focusing on violations of constitutional or statutory provisions, exceeding statutory authority, unlawful procedures, errors of law, lack of substantial evidence, or arbitrary actions.

Under HRS § 91-14(g), various aspects of administrative agency decisions are subject to different standards of review. Courts apply a deferential abuse of discretion standard when an agency has legislative discretion in its determinations. Conversely, if the agency lacks such discretion, its conclusions are reviewed de novo. The agency's jurisdiction is strictly defined by statute, and any conclusions of law are evaluated for compliance with constitutional or statutory provisions. The court found that the Hawaii Labor Relations Board (HLRB) exceeded its jurisdiction and did not engage in a substantive review of HLRB’s determinations. 

Specifically, UPW's arguments regarding the HLRB's jurisdiction and statutory authority were dismissed. The court affirmed that under HRS § 89-14, the HLRB possesses exclusive original jurisdiction over prohibited practice controversies. Furthermore, HRS § 91-8 permits the HLRB to issue declaratory rulings concerning statutory applicability, with specific procedural rules stating that such rulings apply only to the facts presented in the petition. Thus, the court agreed with UPW that the HLRB lacked exclusive jurisdiction over certain matters but did not address the merits of UPW's related claims regarding Decision No. 470.

The HLRB has jurisdiction to determine if specific employer conduct is a 'prohibited practice' under HRS § 89-13. In the case of Fasi v. State Pub. Emp’t Relations Bd., the Hawai'i Supreme Court addressed the Board's authority to issue a declaratory ruling regarding a seniority clause in a collective bargaining agreement. Before the employer (the City) filed a petition, a grievance had been raised, and arbitration was requested by the union. Despite this, the Board accepted jurisdiction and ruled that the seniority provision did not violate HRS § 89-9(d). The circuit court later reversed this ruling, asserting that the matter should proceed to arbitration first, claiming the Board lacked jurisdiction.

On secondary appeal, the supreme court affirmed the Board's jurisdiction over the petition, referencing HRS § 91-8, which allows the Board to address issues relevant to its authority over prohibited practices. The court noted that a willful failure by an employer to adhere to a collective bargaining agreement constitutes a prohibited practice as defined by § 89-13(a)(8), allowing the Board to act on complaints from various parties. Thus, the interpretation of the collective bargaining agreement's provisions was validly before the Board in light of its powers.

The supreme court further clarified that the circuit court erred in denying the Board's jurisdiction, emphasizing that § 91-8 facilitates the agency's interpretation of relevant statutes rather than resolving interparty disputes. The declaratory ruling issued by the agency only affects the parties involved in the petition and does not adjudicate rights for those not present in the proceeding.

A declaratory ruling granted upon the City’s petition indicated that a violation of the seniority clause of the collective bargaining agreement by the City would be deemed a prohibited practice under § 89-13. The Board retains statutory authority to address prohibited practices, and while existing agreements may inform determinations, they do not limit the Board's jurisdiction. The supreme court clarified that the Board is authorized to define prohibited practices, irrespective of any arbitration provisions or the ruling's potential impact on arbitration outcomes. A recent case, Hawaii Gov’t Emps. Ass’n, Local 152 v. Lingle, reinforced the HLRB’s exclusive original jurisdiction over prohibited practice controversies, confirming that such matters should not be heard in circuit court if they involve allegations of prohibited practices. The legislature has granted the HLRB exclusive original jurisdiction, including necessary powers to enforce its jurisdiction effectively. Additionally, the HLRB can interpret HRS § 89-13(a)(1) through declaratory rulings to identify prohibited practices. The UPW’s Amended Petition claimed that the Employers’ subpoenas violated employees’ rights under HRS § 89-3, qualifying as prohibited practices under HRS § 89-13(a)(1). Thus, the Board had jurisdiction to address the UPW’s Amended Petition regarding alleged prohibited practices.

The supreme court in Fasi noted that the ruling’s effects are limited to specific factual circumstances and that the HLRB’s authority to determine if an action constitutes a prohibited practice remains intact, even if the same issue is under consideration in arbitration. The Circuit Court erroneously reversed Decision No. 470, concluding the HLRB lacked jurisdiction over UPW’s Amended Petition. This ruling was incorrect; the HLRB does have jurisdiction to hear the Amended Petition. UPW argued that the Circuit Court also erred in asserting that the HLRB exceeded its authority by applying Decision No. 470 beyond the specific facts of the Amended Petition. However, this point was not addressed because the Circuit Court's initial jurisdiction error prevented it from evaluating the merits of the State’s other challenges to Decision No. 470. The case is remanded for further proceedings on the issues raised by the State's appeal, apart from the jurisdiction issue. The Circuit Court's judgment from September 29, 2008, is vacated. Additionally, there are references to subpoenas served on UPW related to arbitration and litigation, and the County of Hawaii’s involvement in the appeal. Historically, the Board's jurisdiction over prohibited practices was clarified in 1982 to be exclusive, superseding the earlier conclusion in Winslow v. State, which had indicated otherwise. Recognition of the Board's jurisdiction does not imply a stance on the merits of the allegations.