State v. Nakaneula.

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Electronically Filed
Supreme Court
SCWC-30444
21-JAN-2015
10:15 AM
IN THE SUPREME COURT OF THE STATE OF HAWAIʻI
---o0o---
________________________________________________________________
SCWC-30444
(ICA NO. 30444; CIVIL NO. 09-1-2488)
(CASE NO. CU-10-278)
STATE OF HAWAIʻI, CITY AND COUNTY OF HONOLULU;
COUNTY OF HAWAIʻI; COUNTY OF MAUI; COUNTY OF KAUAʻI;
HAWAIʻI HEALTH SYSTEMS CORPORATION; AND THE JUDICIARY,
Respondents/Complainants-Appellees-Appellees,
vs.
DAYTON NAKANELUA, State Director, UNITED PUBLIC WORKERS,
AFSCME, LOCAL 646, AFL-CIO and UNITED PUBLIC WORKERS,
AFSCME, LOCAL 646, AFL-CIO (2009-42),
Petitioners/Respondents-Appellants-Appellants,
and
HAWAIʻI LABOR RELATIONS BOARD; JAMES B. NICHOLSON; SESNITA A.D.
MOEPONO; and ROCK B. LEY, Respondents/Agency-Appellees-
Appellees.
-----------------------
(CASE NO. CE-10-726)
UNITED PUBLIC WORKERS, AFSCME, LOCAL 646, AFL-CIO,
Petitioner/Complainant-Appellant-Appellant,
vs.
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NEIL DIETZ, Chief Negotiator, Office of
Collective Bargaining, State of Hawaiʻi (2009-043),
Respondent/Respondent-Appellee-Appellee,
and
HAWAII LABOR RELATIONS BOARD; JAMES B. NICHOLSON; SESNITA A.D.
MOEPONO; and ROCK B. LEY, Respondent/Agency-Appellees-Appellees.
----------------------------------------------------------------
SCWC-30568
(ICA NO. 30568; S.P. NO. 09-1-0305)
UNITED PUBLIC WORKERS, AFSCME, LOCAL 646, AFL-CIO,
Petitioner/Union-Appellee, Cross-Appellant,
vs.
STATE OF HAWAIʻI; THE JUDICIARY; HAWAIʻI HEALTH SYSTEMS
CORPORATION, Respondents/Employers-Appellants, Cross-Appellees,
and
CITY AND COUNTY OF HONOLULU (2009-044),
Respondent/Employer-Appellee.
---------------------------------------------------------------
SCWC-10-0000166
(CAAP-10-0000166; CIVIL NO. 10-1-0323)
(CASE NO. CU-10-278)
STATE OF HAWAIʻI, CITY AND COUNTY OF HONOLULU;
COUNTY OF HAWAIʻI; COUNTY OF MAUI; COUNTY OF KAUAʻI;
HAWAIʻI HEALTH SYSTEMS CORPORATION; AND THE JUDICIARY,
Respondents/Complainants-Appellees-Appellees,
vs.
DAYTON NAKANELUA, State Director, UNITED PUBLIC WORKERS,
AFSCME, LOCAL 646, AFL-CIO, AND UNITED PUBLIC WORKERS,
AFSCME, LOCAL 646, AFL-CIO (2009-042),
Petitioners/Respondents-Appellants-Appellants,
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and
HAWAIʻI LABOR RELATIONS BOARD; JAMES B. NICHOLSON; SISNITA A.D.
MOEPONO; and ROCK B. LEY, Respondents/Agency-Appellees-
Appellees.
-----------------------
(CASE NO. CE-10-726)
UNITED PUBLIC WORKERS, AFSCME, LOCAL 646, AFL-CIO,
Petitioner/Complainant-Appellant-Appellant,
vs.
NIEL DIETZ, Chief Negotiator, Office of
Collective Bargaining, State of Hawaiʻi (2009-043),
Respondent/Respondent-Appellee-Appellee,
and
HAWAIʻI LABOR RELATIONS BOARD; JAMES B. NICHOLSON; SISNITA A.D.
MOEPONO; and ROCK B. LEY, Respondents/Agency-Appellees-
Appellees.
________________________________________________________________
SCWC-30444, SCWC-30568, AND SCWC-10-0000166
(ICA NOS. 30444, 30568, AND CAAP-10-0000166;
CIV. NO. 09-1-2488, S.P. NO. 09-1-0305, AND CIV. NO. 10-1-323)
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
JANUARY 21, 2015
RECKTENWALD, C.J., NAKAYAMA, POLLACK, AND WILSON, JJ, AND
CIRCUIT JUDGE TRADER, IN PLACE OF McKENNA, J., RECUSED
OPINION OF THE COURT BY RECKTENWALD, C.J.
This appeal requires us to determine which tribunal–-
the Hawaiʻi Labor Relations Board (HLRB) or the circuit court--
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had jurisdiction to resolve a labor dispute regarding the
selection of a neutral arbitrator.
The dispute arose out of a negotiation between the
State of Hawaiʻi and other governmental entities (collectively,
“the State”) and United Public Workers (UPW) to renew and modify
a collective bargaining agreement (CBA). Because the State and
UPW could not reach an agreement, the HLRB declared an impasse
pursuant to Hawaiʻi Revised Statutes (HRS) § 89-11. When the
parties failed to resolve the impasse within twenty days, HRS
§ 89-11 then mandated that they go through an impasse procedure
culminating in arbitration.
The parties agreed to a process by which they would
select a neutral arbitrator. Unfortunately, they were unable to
do so, and each side then filed a prohibited practice complaint
accusing the other of undue delay and bad faith in carrying out
the impasse procedure. The HLRB determined that both parties
had committed prohibited practices by their wilful failure to
complete the arbitrator selection process, and ordered the
American Arbitration Association (AAA) to select the neutral
arbitrator.
The dispute then moved to circuit court, where the
parties filed three separate cases challenging the actions of
the HLRB. In one action, the UPW filed a motion to compel
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arbitration; the circuit court denied the motion after
concluding that the HLRB had exclusive original jurisdiction
over the matter because it involved prohibited practices under
HRS § 89-14. 1 The other two actions challenged HLRB’s finding of
prohibited practices and its ordering of the AAA to select the
neutral arbitrator; the circuit court affirmed the HLRB’s
rulings in both cases. 2
On appeal, the UPW contended that the circuit court
had jurisdiction over the dispute regarding the selection of the
arbitrator under the Hawaii Uniform Arbitration Act, HRS chapter
658A. The Intermediate Court of Appeals (ICA) disagreed,
concluding that the HLRB had exclusive original jurisdiction
under HRS § 89-14 since the dispute involved allegations of the
prohibited practices and, to the extent there was a conflict
between the jurisdictional provisions of HRS chapters 89 and
658A, the former takes precedence. State v. Nakanelua, 132
Hawaiʻi 492, 323 P.3d 136 (App. 2014). The UPW challenges that
ruling and other aspects of the ICA’s opinion.
Thus, we must decide whether the HLRB or the circuit
court had jurisdiction to resolve the dispute over the selection
1
The Honorable Sabrina S. McKenna, Gary W.B. Chang, and R. Mark
Browning presided.
2
The Honorable Karl K. Sakamoto presided.
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of the arbitrator. Although we conclude that the HLRB had
jurisdiction under HRS chapter 89, our reasoning differs from
that of the ICA. The arbitration at issue here was required by
statute as part of the legislatively mandated process for
resolving impasses in collective bargaining. In contrast, the
provisions of HRS chapter 658A apply to situations in which the
parties voluntarily agree to engage in arbitration. Thus, HRS
chapter 658A is simply not applicable to this case, and it is
not necessary to determine whether the HLRB’s jurisdiction takes
precedence over that of the circuit court.
Except as noted below, we otherwise agree with the
ICA’s analysis. Accordingly, the judgment of the ICA is
affirmed.
I. Background
The following factual background is taken from the
record on appeal.
A. Factual background
UPW is the exclusive representative for Unit 10
employees, who are “Institutional, health, and correctional
workers[.]” HRS § 89-6 (2012). In 2008, UPW entered into
negotiations with the State of Hawaiʻi, the Hawaiʻi Health
Systems Corporation, the Judiciary, the City and County of
Honolulu, County of Hawaiʻi, County of Maui, and County of Kauaʻi
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(collectively, the “State”) to renew and modify the Unit 10 CBA
covering the period from July 1, 2009 to June 30, 2011.
The parties could not reach agreement on the terms of
the CBA. As a result, on February 2, 2009, the HLRB issued
Order No. 2576, pursuant to HRS § 89-11(c)(2), 3 declaring an
impasse and appointing a mediator to assist the parties in
resolving the dispute.
Because mediation was unsuccessful, and the parties
still had not resolved the impasse, on March 3, 2009, UPW and
the State entered into the following memorandum of agreement
(MOA), setting forth an alternative impasse procedure pursuant
to HRS § 89-11(a) 4:
3
HRS § 89-11(c) (2012) provides, in pertinent part:
An impasse over the terms of an initial or renewed
agreement and the date of impasse shall be as
follows:
. . .
(2) If neither party gives written notice of an
impasse and there are unresolved issues on January 31
of a year in which the agreement is due to expire,
the board shall declare on January 31 that an impasse
exists and February 1 shall be the date of impasse.
4
HRS § 89-11(a) (2012) provides that:
A public employer and an exclusive representative may
enter, at any time, into a written agreement setting
forth an alternate impasse procedure culminating in
an arbitration decision pursuant to subsection (f),
to be invoked in the event of an impasse over the
terms of an initial or renewed agreement. The
alternate impasse procedure shall specify whether the
parties desire an arbitrator or arbitration panel,
(continued…)
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MEMORANDUM OF AGREEMENT
Alternate Impasse Procedure for Unit 10
This MEMORANDUM OF AGREEMENT is entered into this 3rd
day of March 2009, by and between the United Public
Workers, AFSCME, Local 646 AFL-CIO hereinafter the
“Union,” and the State of Hawaii, the Judiciary, the
Hawaii Health Systems Corporation, and the City and
County of Honolu1u, hereinafter the “Employer.”
Pursuant to subsection 89-11(a), Hawaii Revised
Statutes; the Union and the Employer agree to the
following alternate impasse procedure for the
successor collective bargaining agreements, effective
July 1, 2009, covering employees in bargaining unit
10.
1. February 1, 2009 — Impasse is declared by the
Hawaii Labor Relations Board.
2. February 2, 2009 to June 22, 2009 — Mediation.
3. June 23, 2009 — HLRB notifies the parties that
the impasse will be submitted to a 3-member
arbitration panel. Two panel members are
selected by the parties (i.e., one by the
Employer and one by the Union). The neutral
third member is the chair of the arbitration
panel and is se1ected by mutual agreement of
the parties.
4. July 6, 2009 — Deadline to select a neutral
arbitrator. HLRB requests a list of
arbitrators from AAA. In the event the parties
fail to select the neutral third member of the
panel by this date, HLRB will request a list of
5 qualified arbitrators from AAA. The neutral
is selected from such list.
Selection & Appointment of Neutral Arbitrator
is made within 5 working days after receipt of
__________________________
(continued…)
how the neutral arbitrator is to be selected or the
name of the person whom the parties desire to be
appointed as the neutral arbitrator, and other
details regarding the issuance of an arbitration
decision. When an impasse exists, the parties shall
notify the board if they have agreed on an alternate
impasse procedure. The board shall permit the
parties to proceed with their procedure and assist at
times and to the extent requested by the parties in
their procedure. . . .
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AAA list. The parties alternately strike names
from the list until a single name is left.
HLRB immediately appoints such person as the
neutral arbitrator and chairperson of the
arbitration panel. (Additional time is
provided to allow AAA to submit the list of
arbitrators.)
5. August 4, 2009 — Deadline for submission of
written final positions by each party to the
members of the arbitration panel and a copy to
the other party.
6. September 11, 2009 — Commencement of
arbitration hearing. (Panel members “are
encouraged to assist the parties in a voluntary
resolution of the impasse through mediation to
the extent practicable throughout the entire
arbitration period until the date the panel is
required to issue its arbitration decision.”)
7. October 12, 2009 — Receipt of transcripts by
panel and parties.
8. November 12, 2009 — Receipt of closing briefs
by panel members; and exchange by parties.
9. November 12, 2009 — Conclusion of the
arbitration hearing. (About 6 to 7 working
days are needed to complete the hearing.
Transcripts, if requested, are usually made
available 15 or more calendar days after the
hearing ends. The arbitration panel usually
allows the parties to submit post-hearing
briefs within 30 calendar days after receipt of
transcripts. Hence, the panel and the parties
should have a clear understanding that the
receipt date of the post-hearing briefs by the
panel members shall be the conclusion of the
arbitration hearing.)
10. December 11, 2009 — Issuance of the preliminary
draft of the arbitration decision which is made
within 30 days after the conclusion of the
hearing. A majority of the panel must reach a
decision pursuant to HRS subsection 89-11(f) on
all provisions that each party proposed in its
respective final position for inclusion in the
final agreement and transmit a preliminary
draft of it decision to the parties. The
parties must review the preliminary draft for
completeness, technical correctness, and
clarity and may mutually submit to the panel
any desired changes or adjustments that must be
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incorporated in the final draft of the
arbitration decision.
11. December 28, 2009 is the date of issuance of a
final arbitration decision.
12. The authorized representatives for the parties
regarding matters covered herein are:
a. Marie Laderta, Employer Representative,
and
b. Dayton Nakanelua, Union Representative
13. Time frames provided in the Memorandum of
Agreement may be modified by mutual agreement
of the parties.
(Emphasis in original).
As indicated in the MOA, HLRB would request a list of
arbitrators from the AAA. From this list, the parties were to
select a three-member arbitration panel that would consist of an
arbitrator chosen by each of the parties and a “neutral
arbitrator” selected by mutual agreement of the parties. If the
parties could not select the neutral arbitrator by July 6, 2009,
the HLRB would request the AAA to provide a list of five
arbitrators, then the parties would alternate striking names
from the list and designate the last remaining name as the
neutral arbitrator. UPW and the State designated Clifford
Uwaine and Stanley Shiraki, respectively, as arbitrators. On
July 15, 2009, the AAA provided a list of five potential neutral
arbitrators. The deadline to select the neutral arbitrator was
initially scheduled for five days after the AAA provided the
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list, but the parties mutually agreed to extend the deadline to
July 28, 2009.
In a July 29, 2009 letter to the HLRB, Laderta, the
State’s representative, alleged that she had attempted on
numerous occasions from July 15, 2009 until July 28, 2009 to
contact UPW’s representative, Nakanelua, regarding the selection
of the neutral arbitrator, but Nakanelua never returned her
calls. The day before Laderta’s letter, Herbert Takahashi,
counsel for UPW, wrote to the State indicating that he
represented UPW in the selection process and requested that the
State stop its attempts to contact Nakanelua.
In response, on July 31, 2009, James Halvorson, deputy
attorney general, wrote to Takahashi to inform him that
Halvorson would be representing the “Employer.” Halvorson also
requested that Takahashi call him immediately to begin the
process of selecting the neutral arbitrator.
On August 3, 2009, Takahashi wrote to Halvorson asking
him to identify which “employer” Halvorson represented, and also
asking for verification of Halvorson’s “authority to represent
anyone other than Governor Lingle.” On August 6, Halvorson
replied by letter that he represented the “employer in the
upcoming Unit 10 interest arbitration” and that Takahashi should
contact him to begin the selection process. The next day, in a
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letter dated August 7, 2009, Takahashi stated that Halvorson’s
August 6, 2009 letter was not responsive because it “does not
indicate apparent or actual authority to act for the employer
group.”
On August 10, 2009, Halvorson requested the HLRB’s
assistance because the “selection process has yet to proceed due
to delays by UPW’s counsel.”
Halvorson also indicated that the delay appeared to
compromise the availability of the arbitrator eventually
selected for the September 11, 2009 start date for the Unit 10
arbitration. 5 The HLRB held a hearing on August 13, 2009,
pursuant to Halvorson’s request, at which Halvorson proposed to
initiate the striking of names, but Takahashi refused. The next
day, Takahashi sent Halvorson a letter agreeing to the State
striking first, but “[w]ithout waiving the UPW’s right to
contest [Halvorson’s] authority to represent the ‘employer[.]’”
The State struck its first name from the AAA list on
August 18, 2009. UPW followed on August 20, 2009 by striking
another name off the list.
5
Included in Halvorson’s letter to the HLRB was an August 7, 2009
email from the AAA, stating that no appointment of an arbitrator had been
made, and that none of the five arbitrators would likely be able to
accommodate the September 11, 2009 commencement of the arbitration.
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On August 21, 2009, the AAA sent an email to the
parties, stating that it was setting an August 25, 2009 deadline
for the parties to select the neutral arbitrator. The email
warned that if the parties did not select a neutral arbitrator
by the deadline, “the [AAA] shall administratively appoint an
Arbitrator at that time.”
On August 24, 2009, Takahashi replied to the AAA,
stating that UPW objected to the August 25, 2009 deadline
because the MOA “does not authorize AAA to administratively
appoint an arbitrator.” Takahashi added, “There is currently a
dispute over who the ‘employer’ is, and whether the selection of
arbitrators by the State . . . is improper.”
On August 26, 2009, Halvorson sent another letter to
Takahashi stating:
As you know, the March 3, 2009 MOA concerning the
alternate impasse procedure between the UPW and the
Employer provides that the selection and appointment
of neutral arbitrator shall be made within 5 working
days after receipt of AAA list. Since July 15, 2009,
the Chief Negotiator for the public employer made
several attempts to contact the UPW State Director to
no avail.
On July 28, 2009, you wrote a letter informing the
employer that you would be making the selection of
the neutral arbitrator. However, to date you have
stonewalled any attempts to select an arbitrator.
Despite my letter to you on July 31, 2009 requesting
the selection of an arbitrator, and another letter
dated August 6, 2009, as well as request for
assistance made to the Board and a subsequent meeting
at the Board on August 13, 2009, and me making the
first strike on August 18, 2009, you have delayed the
selection by taking one week to make your strike.
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In addition, your August 24, 2009, letter to AAA
shows you are not acting in good faith when you
informed AAA about a dispute over who the “employer”
is and whether my selection of the arbitrator is
improper.
Your conduct throughout this process shows bad faith.
Accordingly, we take the position that UPW waived its
right to participate in the interest arbitration, or
at a minimum UPW has waived its right to strike names
from the list of arbitrators and the Employer is
authorized to unilaterally select from the list of
neutral arbitrator [sic]. We are seeking this relief
through a prohibited practice complaint I filed on
Monday, August 24, 2009.
The next day, Takahashi sent a response letter to the
State. He warned that, “If you refuse to exercise the ‘second’
strike forthwith appropriate relief will be sought for willful
violation of the memorandum of agreement.”
B. Prohibited practice complaints in the HLRB
On August 24, 2009, the State filed a prohibited
practice complaint (CU-10-278) in the HLRB, alleging that UPW
had “willfully violated HRS Section 89-13(b)(4)[6] by refusing to
comply with” the alternate impasse procedure agreed to pursuant
6
HRS § 89-13 (2012) lists various prohibited practices, including:
(b) It shall be a prohibited practice for a public
employee or for an employee organization or its
designated agent wilfully to:
. . .
(3) Refuse to participate in good faith in the
mediation and arbitration procedures set forth in
section 89-11; [or]
(4) Refuse or fail to comply with any provision of
this chapter[.]
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to HRS § 89-11. The State sought an order declaring that UPW
had waived its right to participate in the selection process and
authorizing the State to unilaterally select the neutral
arbitrator from the AAA list.
On August 31, 2009, UPW filed its own prohibited
practice complaint (CE-10-726), alleging that “on and after
August 28, 2009 Laderta ha[d] wilfully refused to proceed with
the striking process as required by paragraph 4 of the [MOA].”
In its prohibited practice complaint case, the State
filed a motion for interlocutory relief requesting a declaratory
order that the UPW violated the MOA, committed a prohibited
practice, and had waived its right to either participate in the
interest arbitration set for September 11, 2009 or waived its
right to participate in the selection of the neutral arbitrator.
The State’s accompanying memorandum contended that UPW’s conduct
was dilatory and amounted to bad faith. The State also
requested that the HLRB dismiss UPW’s prohibited practice
complaint against Laderta.
On September 10, 2009, UPW filed a motion to dismiss
the State’s complaint and in the alternative for summary
judgment. UPW argued the State committed a prohibited practice
in violation of HRS § 89-13(a)(8) by refusing to complete its
second strike. UPW requested that the HLRB grant its complaint
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as a matter of law, dismiss the State’s complaint, and compel
the State to complete the striking process and proceed with the
arbitral process under the MOA.
The HLRB consolidated the complaints on September 16,
2009. On September 25, 2009, the HLRB issued Order No. 2640.
The order granted the State’s motion for interlocutory relief in
CU-10-278. The HLRB first concluded that it had jurisdiction
over the subject matter of the consolidated cases, pursuant to
HRS § 89-14, 7 because the controversies concerned prohibited
practices. Next, the HLRB found that, “[t]o date, the parties
have not selected the neutral arbitrator. Yet, since July 15,
2009, the date of the list from AAA, the parties managed to find
the time to” correspond with each other and file various
pleadings with the HLRB and the courts. The HLRB thus found
both parties had been responsible for the undue delay in the
selection of the neutral arbitrator.
7
HRS § 89-14 (2012) provides that:
Any controversy concerning prohibited practices may
be submitted to the board in the same manner and with
the same effect as provided in section 377-9;
provided that the board shall have exclusive original
jurisdiction over such a controversy except that
nothing herein shall preclude (1) the institution of
appropriate proceedings in circuit court pursuant to
section [89-12(c)] or (2) the judicial review of
decisions or orders of the board in prohibited
practice controversies in accordance with section
377-9 and chapter 91. All references in section 377-
9 to “labor organization” shall include employee
organization.
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The HLRB then explained that, because the State moved
for interlocutory relief, the HLRB would decide the motion by
analyzing whether the employer is likely to prevail at trial.
Applying this analysis, the [HLRB] concluded that, “given the
history of events regarding the interest arbitration procedure,
the employer is likely to prevail on the merits that the UPW
committed a prohibited practice by wilfully failing to comply
with the . . . alternate impasse procedure authorized by HRS
§ 89-11 and entered into by the parties.” Adding that the
balance of irreparable harm and public interest supported
interlocutory relief because both parties’ wilful refusal to
comply with the selection process put the interests of both
parties and the Unit 10 public employees at risk, the HLRB
thereby ordered the AAA to select the neutral arbitrator. Soon
thereafter, the AAA selected Jonathan Dworkin as the neutral
arbitrator.
On February 9, 2010, the HLRB issued Order No. 2686.
Based on the same findings it made in Order No. 2640, the HLRB
held that both the State and UPW committed prohibited practices
by their wilful refusal to complete the arbitrator selection
process. As a consequence, the HLRB ordered “that a copy of
this Order be posted by all parties on their website and in
conspicuous places where employees of Unit 10 assemble, and to
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keep the copies posted for a period of 60 days from the date of
posting.” The HLRB imposed no other obligations on either
party.
C. Circuit court proceedings
1. Case No. SCWC-30444 (Appeal from HLRB Order No. 2640)
On October 23, 2009, UPW filed a timely notice of
appeal in the circuit court of the HLRB’s Order No. 2640. 8 In
UPW’s opening brief, it argued that jurisdiction over the
selection of an arbitrator rested with the circuit court
pursuant to chapter 658A; the HLRB exceeded its statutory
authority by ordering the AAA to select a neutral arbitrator
because “[o]nce the parties have entered into an alternative
impasse procedure which specifies how a neutral arbitrator is to
be selected, the [HLRB] is powerless to implement any other
requirement” besides what the MOA authorized; and the HLRB
abused its discretion by granting interlocutory relief to a
party that refused to abide by the MOA.
In the State’s answering brief, it argued that
pursuant to HRS § 89-14, the HLRB had exclusive jurisdiction
over the State’s motion for interlocutory relief because it
involved prohibited practices. The State explained that chapter
8
The Honorable Karl K. Sakamoto presided.
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658A applies to “agreements to arbitrate,” but not an interest
arbitration or prohibited practice under chapter 89. The State
next contended that the HLRB did not exceed its authority when
it ordered the AAA to select a neutral arbitrator because HRS
§ 89-11 empowers the HLRB with broad discretion to assist the
parties in resolving their impasse. The State added that the
HLRB did not abuse its discretion in ordering the AAA to select
the neutral arbitrator, given the parties’ inability to timely
select the arbitrator themselves.
The HLRB’s answering brief argued that the circuit
court lacked jurisdiction over the appeal of Order No. 2640
because it was not a final order or an appealable preliminary
ruling within the meaning of HRS § 91-14. The HLRB pointed to
its later Order No. 2686 as the “final order” in the
consolidated prohibited practices case. The HLRB also defended
its choice of remedy in Order No. 2640 by pointing to
substantial evidence that the parties wilfully delayed the
alternate impasse process.
On February 25, 2010, the State filed a supplemental
answering brief to inform the court that UPW had moved to
confirm and enforce the arbitration award in S.P. No. 09-1-0305,
thereby rendering UPW’s appeal moot in Case No. 30444.
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On April 1, 2010, the circuit court issued its
decision and order affirming the HLRB’s Order No. 2640. With
regard to jurisdiction, the circuit court held that the HLRB had
exclusive jurisdiction pursuant to chapter 89 because the matter
involved prohibited practice complaints. The circuit court also
held that the HLRB properly assisted the parties pursuant to HRS
§ 89-11 in selecting the neutral arbitrator, given the parties’
failure to proceed with their alternate impasse procedure.
The circuit court entered final judgment on April 1,
2010. UPW timely filed a notice of appeal in the ICA on
April 16, 2010.
2. Case No. SCWC-10-166 (Appeal from HLRB Order No. 2686)
In Case No. CAAP-10-166, UPW and the State timely
appealed in the circuit court the HLRB’s Order No. 2686, which
found that the State and UPW had both committed prohibited
practices. 9
In UPW’s opening brief, it insisted there was no
evidence to support the HLRB’s finding that it committed a
prohibited practice. UPW added that the State was the party
that “wilfully” failed to adhere to the selection process when
it refused to strike another name from the AAA list.
9
The Honorable Karl K. Sakamoto presided.
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The State’s opening brief also challenged the HLRB’s
finding that the State wilfully refused to complete the
arbitration process in a timely manner. The State explained
that “the breach of the MOA by the UPW discharged and excused
the [State] from any obligation to perform.”
The HLRB filed answering briefs to both UPW’s and the
State’s opening briefs. In the answering brief to UPW, the HLRB
maintained that it correctly determined the union committed a
wilful violation of HRS § 89-11; and that it was not an abuse of
discretion for it to require the parties to post Order No. 2686
on their website for sixty days. The HLRB also noted that the
State was not excused from its obligation to perform under the
agreement just because UPW materially breached the contract
first.
The circuit court issued its order affirming the
HLRB’s Order No. 2686, and determining that the HLRB did not
clearly err in finding both parties had committed prohibited
practices.
The circuit court entered final judgment the same day.
UPW timely filed a notice of appeal.
3. Case No. SCWC-30568 (Special Proceeding No. 09-1-0305)
Meanwhile, on September 9, 2009, UPW filed a motion to
compel arbitration in the circuit court (S.P. No. 09-1-0305
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EEH). 10 UPW asserted in its motion that the circuit court had
jurisdiction pursuant to chapter 658A.
On October 21, 2009, the circuit court issued an order
granting in part and denying in part the motion to compel
arbitration. The circuit court determined that “the [HLRB] has
subject matter jurisdiction over a prohibited practice
controversy pursuant to [HRS § 89-14].” Accordingly, the
circuit court ruled that it “lacks subject matter jurisdiction
over the issues presented regarding prohibited practices, and in
the alternative, if this Court has jurisdiction, the Court finds
under the primary jurisdiction doctrine the [HLRB] should first
address the issues presented.”
On January 14, 2010, Dworkin and the other two
arbitrators issued an opinion and award. On February 19, 2010,
UPW filed a motion to confirm and enforce the arbitration award.
The circuit court issued an order on May 18, 2010, granting
UPW’s motion to confirm and enforce arbitration award. The
circuit court entered judgment the same day.
On July 7, 2010, UPW filed a motion for show cause
order and for civil contempt. The motion alleged that the
May 18, 2010 order incorporated the January 14, 2010 arbitration
10
The Honorable Sabrina S. McKenna, Gary W.B. Chang, and R. Mark
Browning presided.
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award, which required UPW and the State “to meet and confer,
without undue delay, and draft language for the 2009-2011
agreement,” but that the State had refused to meet and confer
with UPW since the May 18, 2010 order. UPW requested that the
circuit court find the State in civil contempt and impose
judicial sanctions, including civil fines, attorney’s fees and
costs, and other appropriate relief.
The circuit court denied UPW’s motion, finding that
there was “no clear and convincing evidence that the [State]
failed to comply with [the circuit court’s May 18, 2010 order].”
However, the court ordered the State and UPW to meet and confer
“to draft such language for the 2009-2011 Agreement as is
necessary and appropriate to give effect to the interest
arbitration award issued on January 14, 2010[.]”
The State timely filed a notice of appeal. UPW timely
filed a cross-appeal.
4. Consolidated ICA Appeal
In its opening briefs 11 to the ICA, UPW argued “[t]he
Circuit Court erred on the question of whether the court or the
[HLRB] has subject matter jurisdiction to determine a dispute
over a selection of the neutral arbitrator to serve in the unit
11
Because the parties filed multiple briefs in all three cases in
the ICA, the relevant arguments are consolidated here.
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10 arbitration.” UPW contended that subject matter jurisdiction
over the selection of an arbitrator under an arbitration
agreement rested with the circuit court under chapter 658A
“because the chapter is both the more recent and a more specific
statute on the selection process of an arbitrator compared to
Chapter 89.” Additionally, UPW insisted that HRS § 658A-11 12
required the circuit court to compel arbitration according to
the terms set forth in the MOA. UPW also argued that, “[b]y
failing to grant the motion for civil contempt, the circuit
court in effect withheld the enforcement of the arbitration
award, contrary to the intent and purpose of [chapter 658A] and
as such the circuit court erred as a matter of law.” Finally,
UPW contended that “[t]he Circuit Court and the [HLRB] erred as
a matter of law in finding ‘willful’ violations by UPW in Case
CU-10-278[.]”
In its answering briefs, 13 the HLRB argued the circuit
court was correct in concluding that the HLRB had jurisdiction
12
HRS § 658A-11(a) (Supp. 2001) provides in relevant part that:
If the parties to an agreement to arbitrate agree on
a method for appointing an arbitrator, that method
shall be followed, unless the method fails. If the
parties have not agreed on a method, the agreed
method fails, or an arbitrator appointed fails or is
unable to act and a successor has not been appointed,
the court, on motion of a party to the arbitration
proceeding, shall appoint the arbitrator.
13
The HLRB did not file any briefs in CAAP-30568.
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over the prohibited practice complaints. The HLRB then insisted
that substantial evidence supported its prohibited practice
determinations. Regarding Order No. 2640, which directed the
AAA to select the neutral arbitrator, the HLRB contended that it
properly exercised its broad powers under HRS § 89-5(i) to
assist the parties in resolving their impasse by ordering the
selection of the neutral arbitrator.
In the State’s answering briefs, it argued that the
HLRB had exclusive original jurisdiction to resolve the
arbitration dispute under chapter 89. The State also contended
that the case was mooted by both parties’ acceptance of the
interest arbitration decision.
In a published opinion, the ICA first concluded that
“the issues raised by UPW relating to the selection of the
neutral arbitrator are moot because there is no live controversy
between UPW and [the State] regarding the terms of the
Arbitration Award[.]” The ICA noted that neither party
challenged the award, and UPW even moved to have the award
confirmed. The ICA also determined that UPW’s challenge to the
HLRB’s Order No. 2686 finding both parties had committed
prohibited practices was moot. The ICA reasoned that the HLRB
was no longer seeking judicial enforcement of the order, so
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neither party had any continuing obligations arising from the
order.
The ICA nevertheless held that, under the public
interest exception to the mootness doctrine, it would address
the following two issues: (1) “whether the HLRB or the Circuit
Court had original jurisdiction to resolve the dispute over the
selection of the neutral arbitrator”; and (2) “whether the HLRB
exceeded its authority in issuing its order for interlocutory
relief” directing the AAA to select a neutral arbitrator.
The ICA held that the HLRB, not the circuit court, had
jurisdiction over the selection of the neutral arbitrator. In
support of this result, the ICA first concluded that the HLRB
had exclusive original jurisdiction over the arbitration
selection dispute because, under HRS § 89-14, the HLRB had
jurisdiction over any “controversy concerning prohibited
practices.” The ICA then proceeded to address UPW’s contention
that the circuit court had exclusive original jurisdiction over
the matter pursuant to chapter 658A. Although the ICA appeared
to conclude that chapter 658A did not cover statutorily mandated
arbitration, the ICA stated:
[W]e need not resolve the question of whether HRS
Chapter 658A applies to interest arbitrations under
HRS Chapter 89. This is because even if the MOA
qualifies as an “agreement to arbitrate” that is
subject to the provisions of HRS Chapter 658A, the
exclusive original jurisdiction granted to the HLRB
over controversies concerning prohibited practices by
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HRS § 89—14 would supersede HRS Chapter 658A. HRS
§ 89—19 (2012) explicitly states that the provisions
of HRS Chapter 89 “shall take precedence over all
conflicting statutes concerning this subject matter
and shall pre-empt all contrary local ordinances,
executive orders, legislation, or rules adopted by
the State[.]” To the extent that there may be a
conflict between the jurisdictional provisions of HRS
Chapters 89 and 658A, Chapter 89 takes precedence
over Chapter 658A.
(Footnote omitted).
Next, the ICA held that the HLRB did not exceed its
authority in ordering interlocutory relief that differed from
the arbitrator selection procedures set forth in the MOA. The
ICA explained that the HLRB is granted broad statutory authority
under HRS § 89-5(i) to determine how to resolve prohibited
practice disputes. And, given the parties’ inability to timely
select the neutral arbitrator, the HLRB did not abuse its
discretion in using its authority to direct the AAA to do so.
Finally, the ICA held that the circuit court did not err in
denying the motion for civil contempt. The ICA explained that
the motion involved a controversy concerning prohibited
practices, thus, “the Circuit Court lacked jurisdiction to
decide the Motion for Civil Contempt.”
Accordingly, the ICA affirmed the circuit court’s
April 1, 2010 Final Judgment in Appeal No. 30444, affirmed the
circuit court’s May 18, 2010 Final Judgment but vacated its
August 25, 2010 Order Denying Motion for Civil Contempt in
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Appeal No. 30568, and affirmed the circuit court’s November 10,
2010 Final Judgment in Appeal No. CAAP-10-0000166.
The ICA entered its judgment on appeal on April 4,
2014. UPW timely filed its application for certiorari on
June 3, 2014. The State filed a response on June 17, 2014.
II. Standards of Review
A. Subject matter jurisdiction
The existence of jurisdiction is a question of law
that we review de novo under the right/wrong
standard. Questions regarding subject matter
jurisdiction may be raised at any stage of a cause of
action. When reviewing a case where the circuit
court lacked subject matter jurisdiction, the
appellate court retains jurisdiction, not on the
merits, but for the purpose of correcting the error
in jurisdiction. A judgment rendered by a circuit
court without subject matter jurisdiction is void.
Riethbrock v. Lange, 128 Hawaiʻi 1, 11, 282 P.3d 543, 553 (2012)
(citing Lingle v. Hawaiʻi Gov’t Emps. Ass’n, AFSCME, Local 152,
107 Hawaiʻi 178, 182, 111 P.3d 587, 591 (2005)).
“Accordingly, a court’s decision to invoke the primary
jurisdiction doctrine is reviewed de novo as well. If the court
determines that the primary jurisdiction doctrine applies, the
court, in its discretion, may determine whether to stay the
litigation or dismiss without prejudice.” United Pub. Workers,
AFSCME, Local 646, AFL-CIO v. Abercrombie, 133 Hawaii 188, 195,
325 P.3d 600, 607 (2014) (quoting Pac. Lightnet, Inc. v. Time
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Warner Telecom, Inc., 131 Hawaiʻi 257, 275, 318 P.3d 97, 115
(2013)).
B. Mootness
“[M]ootness is an issue of subject matter
jurisdiction. Whether a court possesses subject matter
jurisdiction is a question of law reviewable de novo.” Hamilton
ex rel. Lethem v. Lethem, 119 Hawaiʻi 1, 4-5, 193 P.3d 839, 842-
43 (2008) (internal quotation marks omitted) (quoting
Kahoohanohano v. Dep’t of Human Servs., 117 Hawaiʻi 262, 281,
178 P.3d 538, 557 (2008)).
III. Discussion
A. Although the ICA erred in concluding that the finding of
prohibited practices in Order No. 2686 was moot, the
finding was nevertheless supported by substantial evidence
A threshold issue in the instant case is to what
extent UPW’s claims are moot. The ICA determined the following
issues were moot: (1) the HLRB’s Order No. 2686 finding that
both the State and UPW committed prohibited practices; and (2)
the selection of the neutral arbitrator.
In general, “this court does not have jurisdiction to
decide abstract propositions of law or moot cases[.]” Lathrop
v. Sakatani, 111 Hawaiʻi 307, 312, 141 P.3d 480, 485 (2006)
(internal quotation marks and brackets omitted) (quoting Wong v.
Bd. of Regents, Univ. of Haw., 62 Haw. 391, 395, 616 P.2d 201,
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204 (1980)). “The duty of this court, as of every other
judicial tribunal, is to decide actual controversies by a
judgment which can be carried into effect, and not to give
opinions upon moot questions or abstract propositions, or to
declare principles or rules of law which cannot affect the
matter in issue in the case before it.” Wong, 62 Haw. at 394-
95, 616 P.2d at 204. Stated otherwise,
[t]he mootness doctrine is said to encompass the
circumstances that destroy the justiciability of a
suit previously suitable for determination. Put
another way, the suit must remain alive throughout
the course of litigation to the moment of final
appellate disposition. . . . The doctrine seems
appropriate where events subsequent to the judgment
of the trial court have so affected the relations
between the parties that the two conditions for
justiciability relevant on appeal--adverse interest
and effective remedy--have been compromised.
Lathrop, 111 Hawaiʻi at 312-13, 141 P.3d at 485-86 (quoting Wong,
62 Haw. at 394, 616 P.2d at 203–04).
The ICA erred in concluding that the HLRB’s Order No.
2686-–finding that UPW and the State both committed prohibited
practices–-was moot. To establish that Order No. 2686 was moot,
the HLRB points out that the order only required that a copy of
the order “be posted by all parties on their website and in
conspicuous places where employees of Unit 10 assemble, and to
keep the copies posted for a period of 60 days from the date of
posting.” Apart from this temporary obligation, the HLRB
contends that Order No. 2686 imposed no other sanctions or
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directives for which this court could grant relief, or for which
the HLRB could continue to seek enforcement, thus, the order is
moot.
However, the HLRB’s argument fails to take into
account that an agency such as the HLRB can give consideration
to its past decisions when determining future prohibited
practice complaints. For example, in Sun Oil Co. of
Pennsylvania v. N.L.R.B., 576 F.2d 553, 554-55 (3d Cir. 1978), a
company petitioned for review of two decisions and orders by the
National Labor Relations Board (NLRB) finding that the company
committed unfair labor practices. The United States Court of
Appeals for the Third Circuit denied the NLRB’s motion to
dismiss the case for mootness. Id. at 558 n.3. The court
reasoned that the case was not moot because:
important collateral consequences may flow from the
[NLRB’s] order unless the unfair labor practice
violations are expunged . . . . Because the [NLRB]
often gives consideration to past misconduct in
determining current claims of unfair labor practices,
the Company has a continuing, vital interest in a
clear pronouncement that they have committed no
unfair labor practices in this instance.
Id. at 558 n.3.
There is nothing to preclude the HLRB, like the NLRB
in Sun Oil Co., from taking into consideration past decisions
when determining current prohibited practice complaints against
either UPW or the State. Indeed, under HRS § 377-9(d), the HLRB
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is authorized to assess a monetary penalty against an employer
or employee based on past findings of unfair or prohibited
practices. HRS § 377-9 (1993 and Supp. 2009) (“[A]n employer or
employee who wilfully or repeatedly commits unfair or prohibited
practices that interfere with the statutory rights of an
employer or employees or discriminates against an employer or
employees for the exercise of protected conduct shall be subject
to a civil penalty not to exceed $10,000 for each violation.”).
Although HRS § 377-9(d) specifically addresses employer-employee
relations, and thus does not appear to apply to a collective
bargaining representative such as UPW, the provision nonetheless
suggests that it is permissible for the HLRB to consider past
prohibited practices decisions within the context of a
collective bargaining dispute such as the one in the instant
case. The HLRB has not pointed to any law that prevents it from
doing so. Although Order No. 2686 no longer imposes any
directives, it still presents a live controversy for which a
court can provide an effective remedy. Were this court to
vacate Order No. 2686, thereby expunging the finding of a
prohibited practice from both UPW’s and the State’s employment
relations record, it would relieve them from having the order
used against them in later prohibited practice determinations.
In sum, the HLRB’s Order No. 2686 was not moot.
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Although the ICA erred in finding the order was moot,
we nevertheless affirm the ICA’s judgment on this point because
the HLRB’s finding that UPW committed a prohibited practice is
supported by substantial evidence. In Order No. 2686, the HLRB
found that both parties had “wilfully failed to complete the
arbitrator selection process” in violation of the MOA and
chapter 89. Relevant to the HLRB’s finding, the parties did not
meet their initial deadline to select the arbitrator by July 22,
2009, and extended the deadline to July 28, 2009. The HLRB
noted that during this time, the State’s representative had
tried repeatedly to contact UPW’s representative to begin the
selection process, but she never heard back from UPW’s
representative. The parties further consumed unnecessary time
by corresponding by letter. As a result of both parties’
conduct, neither UPW nor the State struck a name from the AAA
list until August 18, 2009, and by August 24, 2009, the parties
had only managed to strike only two names. The HLRB pointed out
that, “Although the parties did not select the neutral
arbitrator, since July 15, 2009, the date of the list from AAA,
the parties managed to find the time” to correspond with each
other and file various pleadings with the HLRB and the courts.
Given this evidence, the HLRB did not clearly err in concluding
that the parties could have completed the arbitrator selection
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process if they wanted to, but, given the totality of the
circumstances, the parties’ failure to do so was wilful.
B. The ICA did not err in concluding that issues regarding the
selection of the neutral arbitrator were moot but fell
within the public interest exception to the mootness
doctrine
The ICA correctly concluded that issues relating to
the selection of the neutral arbitrator were moot. As the ICA
notes, although the parties disagree about the selection of the
neutral arbitrator, they do not dispute the terms of the
arbitration award itself. Indeed, after Dworkin was selected as
the neutral arbitrator by the AAA, and the arbitration panel
issued its decision, UPW moved the circuit court to confirm the
arbitration award. UPW then argued on appeal that the circuit
court erred in denying UPW’s motion to find the State in civil
contempt for failing to comply with the award. Insofar as both
parties agreed to the arbitration award, the underlying
selection of the neutral arbitrator was no longer a live
controversy, thereby rendering it moot. Moreover, both the MOA
and the 2009-2011 CBA have expired. It is therefore unclear
what relief a court could provide regarding the selection of the
neutral arbitrator. Accordingly, the ICA correctly concluded
that issues regarding the selection of the neutral arbitrator
were moot.
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The ICA nevertheless concluded that the public
interest exception to the mootness doctrine applied to two
issues regarding the selection of the neutral arbitrator:
“whether (1) the HLRB or the Circuit Court had jurisdiction to
determine the parties’ dispute over the selection of the neutral
arbitrator; and (2) whether the HLRB exceeded its authority in
issuing the order for interlocutory relief directing the AAA to
select the neutral arbitrator.” As a result, the ICA determined
that it retained jurisdiction over those issues and addressed
them in its opinion. The ICA was correct, as discussed below.
“When analyzing the public interest exception, this
court looks to (1) the public or private nature of the question
presented, (2) the desirability of an authoritative
determination for future guidance of public officers, and (3)
the likelihood of future recurrence of the question.” Hamilton,
119 Hawaiʻi at 6-7, 193 P.3d at 844-45 (quoting Doe v. Doe, 116
Hawaiʻi 323, 327, 172 P.3d 1067, 1071 (2007)) (brackets omitted).
The above factors support the ICA’s conclusion. First, it is
clear that both issues are of a public nature. Each issue
concerns a CBA between public employers and the collective
bargaining representative of their Unit 10 employees. See
Kahoʻohanohano v. State, 114 Hawaiʻi 302, 333, 162 P.3d 696, 727
(2007) (holding that the subject appeal was of a public nature
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because the outcome would affect all state and county
employees). Second, it is also clear that deciding the two
issues would assist the HLRB in adjudicating future cases
implicating similar issues, and would provide guidance to
parties to comparable CBAs. Third, without a ruling on both
issues, it is likely that similar disputes would arise in the
future. For example, the issue of whether the HLRB or the
circuit court has jurisdiction over an arbitration dispute has
already come before this court in the past year. See Hawaii
State Teachers Ass’n v. Univ. Lab. Sch. (hereinafter “HSTA”),
132 Hawaiʻi 426, 322 P.3d 966 (2014). Given all of this, the ICA
properly considered the two issues under the public interest
exception.
C. The circuit court lacked jurisdiction over the arbitration
in the instant case because chapter 658A applies to an
“agreement to arbitrate” and not to statutorily mandated
arbitration pursuant to HRS § 89-11(e)
UPW argues the ICA erred in concluding the circuit
court lacked jurisdiction to appoint the arbitrator. The ICA
reached the correct result, i.e., that the circuit court lacked
jurisdiction, but arrived at this result through incorrect
reasoning. Specifically, the ICA correctly concluded the HLRB
had exclusive original jurisdiction over the arbitration because
it was a controversy concerning prohibited practices. However,
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the ICA decided that it “need not resolve the question of
whether HRS Chapter 658A applies to interest arbitrations under
HRS Chapter 89” because, under HRS § 89-19 (2012), “the
exclusive original jurisdiction granted to the HLRB over
controversies concerning prohibited practices by HRS § 89-14
would supersede HRS Chapter 658A.” As discussed below, because
chapter 658A applies to an “agreement to arbitrate” only and not
to statutorily mandated arbitration under HRS § 89-11(e), the
circuit court did not have jurisdiction pursuant to chapter
658A. The ICA therefore erred when it relied on HRS § 89-19 to
resolve whether chapter 89 or chapter 658A would control because
chapter 658A was inapplicable.
1. The HLRB had jurisdiction to determine disputes over
the selection of the neutral arbitrator
Chapter 89, entitled “Collective Bargaining in Public
Employment,” sets forth a specific statutory scheme that granted
the HLRB jurisdiction over the impasse process in the instant
case, including disputes regarding the selection of the neutral
arbitrator.
Chapter 89 provides that “it is the public policy of
the State to promote harmonious and cooperative relations
between government and its employees and to protect the public
by assuring effective and orderly operations of government.”
HRS § 89-1(b) (2012). One purpose of chapter 89 is “to provide
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a rational method for dealing with disputes and work
stoppages[.]” Id. § 89-1(a) (2012). “[T]o administer the
provisions of chapters 89 and 377,” and effectuate their
policies, the legislature created the HLRB. Id. § 89-1(b)(3)
(2012); see also HGEA, 124 Hawaiʻi at 204, 239 P.3d at 8 (citing
S. Stand. Comm. Rep. No. 597–82, in 1982 Senate Journal, at
1202)), and granted it express powers to: “[r]esolve
controversies under this chapter”; and “[c]onduct proceedings on
complaints of prohibited practices by employers, employees, and
employee organizations and take such actions with respect
thereto as it deems necessary and proper[.]” HRS § 89-5(i)
(2012).
Under HRS § 89-14, the legislature also granted the
HLRB “exclusive original jurisdiction” over “[a]ny controversy
concerning prohibited practices[.]” Pursuant to HRS § 89-13,
“It shall be a prohibited practice for a public employer [or
bargaining unit representative] wilfully to: [r]efuse to
participate in good faith in the mediation and arbitration
procedures set forth in section 89-11; [r]efuse or fail to
comply with any provision of this chapter; [or] [v]iolate the
terms of a collective bargaining agreement[.]” HRS § 89-
13(a)(6)-(8); id. § 89-13(b)(3)-(5).
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The legislature also set forth a specific procedure to
be followed in the circumstances of this case, namely, an
impasse 14 between a public employer and bargaining unit
representative. If the impasse involves critical bargaining
units, 15 as it does here, HRS § 89-11 mandates that the HLRB
“shall assist in the resolution of the impasse” through
mediation during the first twenty days of impasse. HRS § 89-
11(e) (2012). If the impasse continues beyond twenty days of
the date of impasse, the parties are statutorily required to
enter into arbitration pursuant to HRS § 89-11(e)(2).
Section 89-11(a) further provides that parties “may
enter, at any time, into a written agreement setting forth an
alternate impasse procedure culminating in an arbitration
14
HRS § 89-2 (2012) defines an “impasse” as a “failure of a public
employer and an exclusive representative to achieve agreement in the course
of collective bargaining. It includes any declaration of an impasse under
section 89-11.”
Relevant to the instant case, under HRS § 89-11(c)(2), “[i]f
neither party gives written notice of an impasse and there are unresolved
issues on January 31 of a year in which the agreement is due to expire, the
board shall declare on January 31 that an impasse exists and February 1 shall
be the date of impasse.” Here, the HLRB declared the date of impasse between
UPW and the State as February 1, 2009 after the parties initiated
negotiations in 2008, but could not reach agreement by January 31, 2009 to
renew and modify the CBA that was set to expire on June 30, 2009.
15
In other circumstances, when an impasse exists between the public
employer and certain noncritical bargaining units, HRS § 89-11 provides that
the HLRB “shall assist in the resolution of the impasse” by requiring the
parties to engage in mediation, with the HLRB promptly reporting to the
appropriate legislative body on the progress of the impasse procedures. HRS
§ 89-11(d) (2012).
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decision pursuant to subsection (f)[.]” 16 In addition, “the
alternate impasse procedure shall specify whether the parties
desire an arbitrator or arbitration panel, how the neutral
arbitrator is to be selected or the name of the person whom the
parties desire to be appointed as the neutral arbitrator, and
other details regarding the issuance of an arbitration
decision.” HRS § 89-11(a). HRS § 89-11(a) further provides
that the “[HLRB] shall permit the parties to proceed with their
procedure and assist at times and to the extent requested by the
parties in their procedure.” In summary, although HRS § 89-11
permits an alternate impasse procedure, the procedure still must
culminate in arbitration consistent with subsection (f), with
the HLRB specifically tasked with overseeing and assisting this
process.
Here, the parties set forth an alternate impasse
procedure in their March 3, 2009 MOA, more than twenty days
after the February 1, 2009 date of impasse. By the time the
parties entered into the MOA, they were mandated by HRS § 89-
11(e) to enter into an impasse procedure that culminated in
interest arbitration. The MOA reflects this fact, indicating
16
Subsection (f) provides specific considerations that the
arbitrator(s) must take into account and include in the arbitration decision.
HRS § 89-11(f) (2012).
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that it was entered into “[p]ursuant to subsection 89-11(a),
Hawaii Revised Statutes[.]” The MOA further provided that the
arbitration would be conducted according to HRS § 89-11(f),
which requires the arbitration panel to expressly consider ten
factors in reaching its decision. 17 Moreover, whereas the
17
HRS § 89-11(f) provides that:
An arbitration panel in reaching its decision shall
give weight to the following factors and shall
include in its written report or decision an
explanation of how the factors were taken into
account:
(1) The lawful authority of the employer, including
the ability of the employer to use special
funds only for authorized purposes or under
specific circumstances because of limitations
imposed by federal or state laws or county
ordinances, as the case may be;
(2) Stipulations of the parties;
(3) The interests and welfare of the public;
(4) The financial ability of the employer to meet
these costs; provided that the employer’s
ability to fund cost items shall not be
predicated on the premise that the employer may
increase or impose new taxes, fees, or charges,
or develop other sources of revenues;
(5) The present and future general economic
condition of the counties and the State;
(6) Comparison of wages, hours, and conditions of
employment of the employees involved in the
arbitration proceeding with the wages, hours,
and conditions of employment of other persons
performing similar services, and of other state
and county employees in Hawaii;
(7) The average consumer prices for goods or
services, commonly known as the cost of living;
(8) The overall compensation presently received by
the employees, including direct wage
compensation, vacation, holidays and excused
(continued…)
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parties were mandated to enter into an impasse procedure, the
HLRB had the authority and responsibility of overseeing the
entire alternate impasse process, under HRS § 89-11(e) and the
HLRB’s general powers, granted by HRS § 89-5. See HRS § 89-5(i)
(“In addition to the powers and functions provided in other
sections of this chapter, the board shall: . . . (3) Resolve
controversies under this chapter; (4) Conduct proceedings on
complaints of prohibited practices by employers, employees, and
employee organizations and take such actions with respect
thereto as it deems necessary and proper[.]”).
When the parties in the instant case brought
prohibited practice complaints alleging that the other party had
wilfully violated the alternate impasse procedure in the MOA,
the HLRB then had exclusive original jurisdiction over the
__________________________
(continued…)
time, insurance and pensions, medical and
hospitalization benefits, the continuity and
stability of employment, and all other benefits
received;
(9) Changes in any of the foregoing circumstances
during the pendency of the arbitration
proceedings; and
(10) Such other factors, not confined to the
foregoing, which are normally or traditionally
taken into consideration in the determination
of wages, hours, and conditions of employment
through voluntary collective bargaining,
mediation, arbitration, or otherwise between
the parties, in the public service or in
private employment.
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parties’ dispute pursuant to HRS § 89-14. Under HRS § 89-14,
the HLRB has “exclusive original jurisdiction” over “[a]ny
controversy concerning prohibited practices[.]” According to
HRS § 89-13, “It shall be a prohibited practice for a public
employer [or bargaining unit representative] wilfully to:
[r]efuse to participate in good faith in the mediation and
arbitration procedures set forth in section 89-11; [r]efuse or
fail to comply with any provision of this chapter; [or]
[v]iolate the terms of a collective bargaining agreement[.]”
HRS § 89-13(a)(6)-(8); id. § 89-13(b)(3)-(5). Each party
alleged in its prohibited practice complaint that the other
party wilfully violated HRS § 89-13 by refusing to comply with
HRS § 89-11. The HLRB therefore had exclusive original
jurisdiction over the issues regarding the selection of the
neutral arbitrator, pursuant to HRS § 89-14.
2. The circuit court did not have jurisdiction under
chapter 658A and this court’s decision in HSTA
UPW nevertheless argues that the circuit court was
required to exert its jurisdiction under chapter 658A and this
court’s decision in HSTA, regardless of whether the HLRB also
had jurisdiction under chapter 89. As UPW notes, HSTA held that
when a circuit court is faced with a motion to compel
arbitration under chapter 658A, the circuit court is limited to
asking if (1) an arbitration agreement exists between the
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parties; and if so, (2) whether the subject matter of the
dispute is arbitrable under such agreement. UPW insists the ICA
and circuit court in the instant case should not have addressed
whether the HLRB or the circuit court had jurisdiction; instead,
the circuit court should have limited its analysis to the above
questions and granted UPW’s motion to compel because the MOA was
an agreement to arbitrate. UPW’s arguments fail because chapter
658A is inapplicable to statutorily mandated arbitration under
HRS § 89-11(e). Accordingly, HSTA does not control the instant
case.
Chapter 658A was enacted by the legislature in 2001 as
a codification of the Revised Uniform Arbitration Act (RUAA).
See 2001 Hawaii Sess. Laws Act 265 §§ 1 and 5 at 810-19, 820.
The drafters of the RUAA, the National Conference of
Commissioners on Uniform State Laws, made clear that the RUAA
was intended to apply to a specific type of arbitration, namely,
when parties voluntarily agreed to arbitrate as an alternative
to litigation. In their note and commentary to the RUAA, the
National Conference of Commissioners explained that, “There are
a number of principles that the Drafting Committee agreed upon
at the outset of its consideration of a revision to the UAA.
First, arbitration is a consensual process in which autonomy of
the parties who enter into arbitration agreements should be
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given primary consideration, so long as their agreements conform
to notions of fundamental fairness.” National Conference of
Commissioners on Uniform State Laws, Uniform Arbitration Act,
Prefatory Note and Comments, 1-2 (December 13, 2000),
http://www.uniformlaws.org/shared/docs/arbitration/
arbitration_final_00.pdf (last visited Dec. 30, 2014) (emphasis
added); see also Hiro N. Aragaki, Equal Opportunity for
Arbitration, 58 UCLA L. Rev. 1189, 1255 (2011) (describing the
purpose of the Revised Uniform Arbitration Act as encouraging
the conditions under which arbitration will become a
“credibl[e]” and “true” alternative to litigation) (quoting
RUAA, §§ 6 cmt., 23 cmt. B (2000)).
In this regard, several provisions in chapter 658A
clarify that the chapter applies specifically to a voluntary
“agreement to arbitrate” as opposed to statutorily mandated
arbitration. For instance, HRS § 658A-3(a) (Supp. 2002)
provides that chapter 658A applies to an “agreement to
arbitrate.” Section 658A-26 (Supp. 2001) furthermore provides
that “[a] court of this State having jurisdiction over the
controversy and the parties may enforce an agreement to
arbitrate,” and that the “agreement to arbitrate” confers
jurisdiction to the circuit court to enter judgment on an award.
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Indeed, the chair of the RUAA drafting committee has
stated that, “Because RUAA only [sic] applies only where there
is an agreement to arbitrate, arbitrations prescribed and
required by state statute are not covered by RUAA. Thus,
statutory labor arbitrations and lemon law arbitrations, and
other such statutory arbitrations are not covered.” Francis J.
Pavetti, The Revised Uniform Arbitration Act (RUAA) 2,
http://www.uniformlaws.org/Shared/Docs/RUAA%20Briefing%20Sheet_v
2_030508.pdf (last visited Dec. 30, 2014) (emphases added). The
RUAA drafting committee chair thus drew a sharp line between
statutorily mandated arbitration, and an agreement to arbitrate,
and stated unequivocally that the RUAA applies to agreements to
arbitrate but not to arbitration mandated by statute.
Reiterating this point yet again, the committee chair stated
that, “One of the cornerstones of party autonomy in RUAA is the
requirement that RUAA only applies if there is an agreement to
arbitrate.” Francis J. Pavetti, Why the States Should Enact the
Revised Uniform Arbitration Act, 3 Pepp. Disp. Resol. L.J. 443,
444 (2003). 18 In this regard, the “RUAA does not apply to
18
See also Francis J. Pavetti, Policy Statement: Revised Uniform
Arbitration Act (RUAA), Uniform Law Commission (May 15, 2000),
http://www.uniformlaws.org/shared/docs/arbitration/arbpswr.pdf (last visited
Dec. 30, 2014).
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statutorily mandated arbitrations not requiring an arbitration
agreement.” Id. at 444 n.4.
In adopting chapter 658A, the legislature stated that
its intent was to “codify[] the [Revised] Uniform Arbitration
Act[,]” so as to advance the public policy of promoting
“arbitration [as] a desirable alternative to litigation[.]” H.
Stand. Comm. Rep. No. 189, in 2001 House Journal, at 1204.
There is no indication in the legislative history that the
legislature intended to expand the RUAA’s reach beyond cases
involving agreements to arbitrate. Given the above, chapter
658A does not cover the statutorily mandated arbitration at
issue here, and thus is inapplicable in the instant case.
The State argues that this court’s definition of a
valid agreement to arbitrate also indicates that the statutorily
mandated arbitration in the instant case is not an “agreement to
arbitrate” conferring jurisdiction on the circuit court within
the meaning of chapter 658A. In Douglass v. Pflueger Hawaii,
Inc., 110 Hawaiʻi 520, 531, 135 P.3d 129, 140 (2006), this court
held that a valid agreement to arbitrate consists of the
following: “(1) it must be in writing; (2) it must be
unambiguous as to the intent to submit disputes or controversies
to arbitration; and (3) there must be bilateral consideration.”
(Citing Brown v. KFC Nat’l Mgmt. Co., 82 Hawaiʻi 226, 238-40, 921
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P.2d 146, 158-60 (1996)). The State contends that the MOA fails
to satisfy the third requirement of bilateral consideration.
“Under the preexisting duty rule, it is well settled that doing
what one is legally bound to do is not consideration for a new
promise.” Yerkovich v. AAA, 610 N.W.2d 542, 546 (Mich. 2000);
see also Egan v. St. Anthony’s Med. Ctr., 244 S.W.3d 169, 174
(Mo. 2008) (holding that a hospital’s duty to conform to health
regulations is a preexisting duty that cannot furnish
consideration for a contract); McCallum Highlands, Ltd. v.
Washington Capital Dus, Inc., 66 F.3d 89, 93 opinion corrected
on denial of reconsideration, 70 F.3d 26 (5th Cir. 1995)
(“[U]nder the ‘pre-existing duty rule,’ an agreement to do what
one is already bound to do cannot serve as ‘sufficient
consideration to support a supplemental contract or
modification.’”) (citation omitted). Here, the parties agreed
to the MOA on March 3, 2009, after their statutory obligation to
arbitrate was triggered by the passage of twenty days from the
February 1, 2009 date of impasse. See HRS § 89-11(e)(2) (“If
the impasse continues twenty days after the date of impasse, the
[HLRB] shall immediately notify the employer and the exclusive
representative that the impasse shall be submitted to a three-
member arbitration panel who shall follow the arbitration
procedure provided herein.”). Thus, according to the State,
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under the preexisting duty rule, the MOA was not a valid
agreement to arbitrate because there was no bilateral
consideration.
In response, UPW argues that the MOA was a voluntary
agreement to arbitrate because, “If some bilateral consideration
went into the overall MOA, then a requirement of bilateral
consideration is satisfied” as to the agreement to arbitrate.
UPW’s argument is unavailing because the parties’ agreement to
other terms in the MOA does not convert a statutorily mandated
arbitration into a voluntary agreement to arbitrate. 19 Notably,
19
Cases in other jurisdictions have remarked on the significant
difference between voluntary agreements to arbitrate and statutorily mandated
arbitration. For example, in Bd. of Educ. of Carlsbad Mun. Sch. v. Harrell,
882 P.2d 511, 516 (N.M. 1994), the New Mexico Supreme Court stated,
“Normally, arbitration is a process in which parties voluntarily contract to
select an impartial third person--an arbitrator--to whom they refer their
dispute for a decision based on evidence and arguments before the arbitration
tribunal, in order to obtain a speedy and inexpensive final resolution of the
dispute. . . . When arbitration is statutorily mandated as the sole method
for resolution of a particular dispute, the arbitration is not consensual
even if a provision for such arbitration is incorporated into a contract.
Arbitration required by statute is compulsory; arbitration freely entered
into by contract is voluntary.” Id. at 517. As the New York Court of
Appeals has observed,
the essence of arbitration, as traditionally used and
understood, is that it be voluntary and on consent.
The introduction of compulsion to submit to this
informal tribunal is to change its essence. It is
very easy to transfer, quite fallaciously, notions
and principles applicable to voluntary arbitration to
“compulsory” arbitration, because, by doubtful logic
but irresistible usage, both systems carry the
descriptive noun “arbitration” in their names. The
simple and ineradicable fact is that voluntary
arbitration and compulsory arbitration are
fundamentally different if only because one may,
under our system, consent to almost any restriction
upon or deprivation of right, but similar
(continued…)
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none of the cases cited to by UPW involved statutorily mandated
arbitration. Vickery v. Hastert, No. 28586 (Haw. App. Feb. 13,
2009) (mem.); Barker v. Golf U.S.A., Inc., 154 F.3d 788, 790
(8th Cir. 1998); Doctor’s Associates, Inc. v. Distajo, 66 F.3d
438, 442 (2d Cir. 1995); Wilson Elec. Contractors, Inc. v.
Minnotte Contracting Corp., 878 F.2d 167, 168 (6th Cir. 1989);
Sablosky v. Edward S. Gordon Co., Inc., 535 N.E.2d 643 (N.Y.
1989); Avid Eng’g, Inc. v. Orlando Marketplace Ltd., 809 So. 2d
1, 2 (Fla. Dist. Ct. App. 2001). Instead, every case cited to
by UPW involved commercial contracts in the private sector, and
specifically considered the issue of whether consideration in a
commercial contract made an arbitration clause in the same
contract enforceable. Moreover, as the court in Distajo
explained, the reason that courts have held that a commercial
arbitration clause does not have to be supported by independent
consideration was because “recent decisions of the Supreme Court
have consistently emphasized that the [Federal Arbitration Act]
is grounded in a strong federal policy favoring arbitration. A
__________________________
(continued…)
restrictions or deprivations, if compelled by
government, must accord with procedural and
substantive due process.
Mount St. Mary’s Hosp. of Niagara Falls v. Catherwood, 260 N.E.2d 508, 511
(N.Y. 1970) (citation omitted); see Harrell, 882 P.2d 511, 517 (holding that
“[defendant’s] putative agreement to arbitrate was in reality a nonconsensual
submission to a statutorily imposed requirement of mandatory arbitration”).
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doctrine that required separate consideration for arbitration
clauses might risk running afoul of that policy.” 66 F.3d at
453 (citation omitted). The reasoning behind the holdings cited
to by UPW was to prevent parties from avoiding arbitration by
arguing that their agreements to arbitrate lacked consideration.
That reasoning is inapplicable here, where arbitration is
required by statute and where both parties do not dispute the
necessity of arbitration. Although consideration as to other
terms in an agreement may make an arbitration clause in a
commercial contract enforceable, it does not transform a
statutorily mandated arbitration into a voluntary agreement to
arbitrate. The MOA was an agreement to the terms of the
alternate impasse procedure, but did not alter the underlying
fact that arbitration was required by HRS § 89-11(e).
In fact, UPW goes so far as to argue that, “whether by
alternate procedures or statutory procedures, an agreement to
arbitrate exists giving the circuit court jurisdiction under
Chapter 658A, HRS.” UPW thus claims that, even if the parties
did not opt for an alternate impasse procedure set forth in an
MOA, and instead followed the impasse process laid out in HRS
§ 89-11(d), that process culminating in mandatory arbitration
would be an agreement to arbitrate conferring jurisdiction to
the circuit court under chapter 658A. No explanation is
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provided by UPW to support this expansive contention, although
the argument suggests that, in UPW’s view, any form of
arbitration constitutes an agreement to arbitrate. Such a view
does not accord with chapter 658A’s recognition of voluntary
arbitration as fundamentally different from statutorily mandated
arbitration.
UPW’s view also does not accord with the statutory
scheme set forth in chapter 89 and discussed in the previous
section. That scheme recognized that arbitration in HRS § 89-11
requires particular oversight by the HLRB because of the
significant financial impact such arbitration could and has had
on the State and counties. To reiterate, HRS § 89-11(d) imposes
strict criteria for the arbitrator to consider when rendering an
award pursuant to HRS § 89-11. In 2000, when the legislature
overhauled large portions of chapter 89, it also instituted
stricter criteria for what arbitrators could and must consider
when rendering a decision in an HRS § 89-11 arbitration. “[T]o
correct the abuse of the arbitration process” that led to
arbitration awards significantly impacting the State budget, see
2000 House Journal, at 746 (statement of Rep. Case), the
Governor and the House even proposed that mandatory arbitration
under HRS § 89-11 should be abolished for all collective
bargaining units but the police and firefighters, and that the
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right to strike be reinstated, see 2000 House Journal, at 746
(statement of Rep. Case); H. Stand. Comm. Rep. No. 1344-00, in
2000 House Journal, at 1522 (“The cost implications of mandatory
arbitration, which is final and binding under section 89-11,
HRS, have played a major role in the economics of the State.
Arbitrators play a vital part in arbitrating disputes over cost
items, with little restraint over imposing awards and no regard
to the ability of the employer to pay.”). The legislature
rejected that option, instead electing to:
Amend[] criteria for arbitration decisions, to
restrict from the arbitrator’s consideration of the
employer’s ability to pay, potential revenue
resources such as the imposition of increased or new
taxes and fees and receipt of judgments and
settlements, and any revenue estimates exceeding
those by the Council of Revenues, and to remove from
consideration the broad catchall provision of other
factors that are normally or traditionally taken into
consideration in voluntary agreements between parties
in public service or private employment.
S. Stand. Comm. Rep. No. 2686, in 2000 Senate Journal, at 1104.
Significantly, this statement by the legislature, when
viewed in the context of the statutory scheme, indicates that it
recognized HRS § 89-11 arbitration as not only distinct from
“voluntary agreements between parties,” i.e., voluntary
agreements to arbitrate, but also requiring stricter control and
oversight, given the financial ramifications such awards have on
the State and counties. Although UPW argues the circuit court
had jurisdiction under chapter 658A because arbitration was
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involved, it is clear from the statutory scheme of chapter 89
that the legislature’s mandate to the HLRB “to administer the
provisions of chapters 89,” HRS § 89-1, also included oversight
of the arbitration process itself. Allowing a party to remove
an HRS § 89-11(e) arbitration from the HLRB’s jurisdiction to
the circuit court would countermand the government’s substantial
interest in, and chapter 89’s clear preference for, having an
agency with expertise over the area in question responsible for
overseeing the entire impasse process. Nor does this statutory
scheme intrude on chapter 658A because the HLRB’s exercise of
jurisdiction over HRS § 89-11(e) arbitration would not conflict
with chapter 658A’s specific application to voluntary agreements
to arbitrate as opposed to statutorily mandated arbitration.
In light of chapter 658A’s inapplicability to the
arbitration here, HSTA does not control the instant case,
contrary to what UPW contends. In HSTA, the public employer,
University Lab School (ULS), and the union representative, HSTA,
negotiated a supplemental agreement concerning the salaries of
ULS’s Unit 5 20 employees. 132 Hawaii at 428, 322 P.3d at 968.
HSTA notified ULS that a “step placement chart” had been
20
HRS § 89-6 provides that bargaining unit 5 employees consist of
“Teachers and other personnel of the department of education under the same
pay schedule, including part-time employees working less than twenty hours a
week who are equal to one-half of a full-time equivalent[.]”
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“inadvertently omitted” from the agreement and should be
included. Id. ULS denied having agreed to the terms of the
chart. Id.
The parties’ supplemental agreement contained an
arbitration provision to resolve grievances. Id. at 428 n.3,
322 P.3d at 968 n.3. Relying on this provision, HSTA contended
the dispute was a grievance and requested arbitration. Id. at
428-29, 322 P.3d at 968-69. ULS contested HSTA’s request to
arbitrate, and insisted the issue was a bargaining dispute
governed by HRS § 89–10.8(a)(1) 21 rather than a grievance subject
to the parties’ arbitration agreement. Id. at 432, 322 P.3d at
972. ULS subsequently filed a prohibited practice complaint
with the HLRB that alleged that HSTA violated HRS § 89–
10.8(a)(1) by attempting to use the grievance process to alter
the supplemental agreement. Id. at 429, 322 P.3d at 969. HSTA
responded by filing a special proceeding in the circuit court to
compel arbitration of its grievance pursuant to HRS § 658A-7. 22
21
HRS § 89–10.8 (2012) governs the “Resolution of disputes;
grievances” and provides: “A public employer shall enter into written
agreement with the exclusive representative setting forth a grievance
procedure culminating in a final and binding decision, to be invoked in the
event of any dispute concerning the interpretation or application of a
written agreement.” However, HRS § 89-10.8(a)(1) clarifies that “[a] dispute
over the terms of an initial or renewed agreement” is not a grievance.
22
HRS § 658A-7 (Supp. 2001) provides:
(continued…)
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Id. The circuit court denied the HSTA’s motion to compel
arbitration, concluding that the HLRB had primary jurisdiction
because the issues raised involved prohibited practices. Id.
The ICA affirmed on the same grounds. Id. at 430-31, 322 P.3d
at 969-70. This court vacated the ICA’s and circuit court’s
respective judgments. Id. at 433, 322 P.3d at 973.
In vacating the ICA, this court reasoned that “[t]he
ICA erred in stating that pursuant to the parties’ agreements,
and HRS § 89–10.8, the circuit court may only order arbitration
after finding that a grievance exists.” Id. at 432, 322 P.3d at
972. Additionally, this court concluded that “[i]t is
immaterial whether this case involves a ‘grievance’ or a
‘dispute over the terms of an initial or renewed agreement’”
because, under HRS §§ 658A-6(b)-(c), “the [circuit] court shall
decide whether an agreement to arbitrate exists or a controversy
is subject to an agreement to arbitrate” and “an arbitrator
__________________________
(continued…)
(a) On motion of a person showing an agreement to
arbitrate and alleging another person’s refusal
to arbitrate pursuant to the agreement:
(1) If the refusing party does not appear or does
not oppose the motion, the court shall order
the parties to arbitrate; and
(2) If the refusing party opposes the motion, the
court shall proceed summarily to decide the
issue and order the parties to arbitrate unless
it finds that there is no enforceable agreement
to arbitrate.
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shall decide whether a condition precedent to arbitrability has
been fulfilled and whether a contract containing a valid
agreement to arbitrate is enforceable.” Id. at 430-32, 322 P.3d
at 970-72 (brackets omitted). Thus, HSTA provided that, when a
circuit court is faced with a motion to compel arbitration under
chapter 658A, “the court is limited to answering two questions:
1) whether an arbitration agreement exists between the parties;
and 2) if so whether the subject matter of the dispute is
arbitrable under such agreement.” Id. at 430, 322 P.3d at 970
(quoting Koolau Radiology, Inc. v. Queen’s Med. Ctr., 73 Haw.
433, 445, 834 P.2d 1294, 1300 (1992)). Therefore, “[t]he ICA
need not have reached the issue of the HLRB’s possible primary
jurisdiction over this dispute” because “the only issue before
the circuit court was whether an arbitration agreement between
the HSTA and the ULS existed.” Id. at 433, 322 P.3d at 973.
HSTA is distinguishable because it involved a
voluntary agreement to arbitrate a grievance as opposed to
statutorily mandated interest arbitration. Whereas the union in
HSTA sought to compel arbitration pursuant to a voluntary
agreement to arbitrate, here, the arbitration was statutorily
mandated by HRS § 89-11(e). As discussed below, although
chapter 658A confers jurisdiction to the circuit court to compel
voluntary “agreements to arbitrate,” chapter 658A does not
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confer jurisdiction over a statutorily mandated arbitration
pursuant to HRS § 89-11(e). As a result, it was proper for the
circuit court in this case to deny UPW’s motion to compel
arbitration. 23
UPW contends that HSTA is indistinguishable on this
ground because “an agreement to arbitrate a rights arbitration
[under HRS § 89-10.8 24] mirrors a legal obligation to arbitrate”
23
Notably, the motion to compel arbitration was unnecessary, given
that HRS § 89-11(e) already required arbitration in the instant case once the
parties had failed to resolve their impasse within twenty days after it was
declared. HRS § 89-11(e)(2). Moreover, neither party disputed the need to
arbitrate the CBA.
24
HRS § 89-10.8 provides:
(a) A public employer shall enter into written
agreement with the exclusive representative setting
forth a grievance procedure culminating in a final
and binding decision, to be invoked in the event of
any dispute concerning the interpretation or
application of a written agreement. The grievance
procedure shall be valid and enforceable and shall be
consistent with the following:
(1) A dispute over the terms of an initial or
renewed agreement shall not constitute a
grievance;
(2) No employee in a position exempted from
chapter 76, who serves at the pleasure of the
appointing authority, shall be allowed to
grieve a suspension or discharge unless the
collective bargaining agreement specifically
provides otherwise; and
(3) With respect to any adverse action
resulting from an employee’s failure to meet
performance requirements of the employee’s
position, the grievance procedure shall provide
that the final and binding decision shall be
made by a performance judge as provided in this
section.
(continued…)
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under HRS § 89-11(e). This is incorrect. Section 89-10.8 is
distinguishable from HRS § 89-11 because it does not obligate
parties to enter into arbitration. Nor did HRS § 89-10.8
obligate the parties to arbitrate the grievance in HSTA.
Section 89-10.8 requires the parties to “enter into written
agreement with the exclusive representative setting forth a
grievance procedure culminating in a final and binding decision,
to be invoked in the event of any dispute concerning the
interpretation or application of a written agreement.” Although
parties may agree to an arbitrator rendering the final and
__________________________
(continued…)
(b) The performance judge shall be a neutral third
party selected from a list of persons whom the
parties have mutually agreed are eligible to serve
as a performance judge for the duration of the
collective bargaining agreement. The parties, by
mutual agreement, may modify the performance judge
list at any time and shall determine a process for
selection from the list.
(c) The performance judge shall use the conditions in
section 76-41(b) as tests in reaching a decision on
whether the employer’s action, based on a failure by
the employee to meet the performance requirements of
the employee’s position, was with or without merit.
(d) If it is alleged that the adverse action was not
due to a failure to meet performance requirements but
for disciplinary reasons without just and proper
cause, the performance judge shall first proceed with
a determination on the merits of the employer’s
action under subsection (c). If the performance
judge determines that the adverse action may be based
on reasons other than a failure to meet performance
requirements, the performance judge shall then
determine, based on appropriate standards of review,
whether the disciplinary action was with or without
proper cause and render a final and binding decision.
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binding decision, the statutory provision does not preclude the
parties from agreeing to a grievance procedure in which the
final and binding decision is determined in a court of law. HRS
§ 89-10.8. Were arbitration required under HRS § 89-10.8, the
statutory provision would have explicitly said so. However,
arbitration is never mentioned in HRS § 89-10.8, unlike in HRS
§ 89-11(e).
Moreover, to the extent the performance judge 25 in HRS
§§ 89-10.8(a)(3), (c)-(d) can be interpreted as an arbitrator,
the performance judge is only required to determine grievances
“[w]ith respect to any adverse action resulting from an
employee’s failure to meet performance requirements of the
employee’s position[.]” HRS § 89-10.8(a)(3). HSTA did not
involve this type of grievance. HSTA instead involved a dispute
over the interpretation and application of a written agreement.
132 Hawaiʻi at 428-29, 322 P.3d at 968-69. UPW’s attempts to
argue that HSTA controls the instant case are, therefore,
without merit.
25
The performance judge is a neutral third party who adjudicates
grievances that arise when a public employer takes an adverse action against
an employee for failing to meet the performance requirements of the
employee’s position. See HRS §§ 89-10.8, 76-41 (Supp. 2000). According to
HRS § 76-41(a), “‘performance requirements’ includes any qualification
required for the position such as a license.”
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Given the above, chapter 658A was inapplicable to the
arbitration in the instant case. 26 Because UPW’s motion to
compel arbitration was brought pursuant to chapter 658A, it was
proper for the court to deny the motion for lack of subject
matter jurisdiction.
Furthermore, the circuit court’s lack of jurisdiction
means that the doctrine of primary jurisdiction is inapplicable.
As this court stated in United Pub. Workers, AFSCME, Local 646,
AFL-CIO v. Abercrombie, 133 Hawaiʻi 188, 197, 325 P.3d 600, 609
(2014), the doctrine of primary jurisdiction applies “where a
claim is originally cognizable in the courts, and comes into
play whenever enforcement of the claim requires the resolution
of issues which, under a regulatory scheme, have been placed
within the special competence of an administrative body.”
26
HRS § 658A-1 (Supp. 2006) appears to contemplate that the circuit
court has jurisdiction over some types of arbitration subject to chapter 89.
Section 658A-1 defines “Court” to mean “any district or circuit court of
competent jurisdiction in this State, unless otherwise indicated. In cases
involving arbitration subject to chapter 89, chapter 377, or the National
Labor Relations Act, ‘court’ means the circuit court of the appropriate
judicial circuit.” This does not indicate, however, that chapter 658A
confers jurisdiction to the circuit court over all arbitrations implicating
chapter 89. As HSTA showed, a public employer and union representative could
enter into a voluntary agreement to arbitrate that concerns a CBA under
chapter 89, but does not implicate the impasse procedures under HRS § 89-
11(e). Indeed, a public employer and representative of a noncritical
bargaining unit may resolve an impasse through a voluntary agreement to
arbitrate under HRS § 89-11(d). For instance, HRS § 89-11(d)(4) provides
that, “After the fiftieth day of impasse, the parties may resort to such
other remedies that are not prohibited by any agreement pending between them,
other provisions of this chapter, or any other law.” If the parties then
reach a voluntary agreement to arbitrate, as permitted by HRS § 89-11(d)(4),
such an agreement could be subject to chapter 658A.
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(Quoting Kona Old Hawaiian Trails Group v. Lyman, 69 Haw. 81,
93, 734 P.2d 161, 168 (1987) (emphasis added)). Primary
jurisdiction thus applies when the circuit court and an
administrative agency both possess original jurisdiction over
the same claim. However, here, the doctrine is inapplicable
because the circuit court lacked jurisdiction over the
arbitration under chapter 658A. Therefore, the primary
jurisdiction doctrine is not necessary to resolve whether the
HLRB or the circuit court was the proper forum in which to
adjudicate the arbitration dispute.
In this regard, the ICA erred in relying on HRS § 89-
19 to resolve the jurisdictional dispute. The ICA stated that
it “need not resolve the question of whether HRS Chapter 658A
applies to interest arbitrations under HRS Chapter 89” because
“the exclusive original jurisdiction granted to the HLRB over
controversies concerning prohibited practices by HRS § 89-14
would supersede HRS Chapter 658A.” In reaching this conclusion,
the ICA cited to HRS § 89—19, which states that chapter 89
“shall take precedence over all conflicting statutes concerning
this subject matter and shall pre-empt all contrary local
ordinances, executive orders, legislation, or rules adopted by
the State[.]” Yet, because the arbitration was statutorily
mandated arbitration pursuant to HRS § 89-11(e), and not a
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voluntary “agreement to arbitrate,” the circuit court did not
have jurisdiction pursuant to chapter 658A. In other words, the
ICA did not need to rely on HRS § 89-19 to resolve whether
chapter 89 or chapter 658A would control because chapter 658A
was inapplicable.
D. The circuit court lacked jurisdiction to determine UPW’s
motion for civil contempt
UPW argues the ICA erred in concluding that the
circuit court lacked jurisdiction to consider UPW’s motion for
show cause order and for civil contempt. According to UPW, “the
circuit court had jurisdiction to consider the motion to show
cause” under HRS § 658A-25(a) (Supp. 2001). 27 However, because
the circuit court did not have jurisdiction over the
arbitration, it lacked jurisdiction to decide UPW’s motion for
show cause order.
UPW does not dispute that it brought its motion to
show cause to enforce the circuit court’s order granting UPW’s
motion to confirm the arbitration award. Nor does UPW dispute
that its motion to confirm the arbitration award was brought
pursuant to chapter 658A. According to the motion, UPW “move[d]
27
HRS § 658A-25(a) provides that, “Upon granting an order
confirming, vacating without directing a rehearing, modifying, or correcting
an award, the court shall enter a judgment in conformity therewith. The
judgment may be recorded, docketed, and enforced as any other judgment in a
civil action.”
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pursuant to Section 658A-22, Hawaii Revised Statutes (HRS), for
confirmation and enforcement of an arbitration decision and
award dated January 14, 2010, for entry of a judgment in
conformity with an order confirming the award pursuant to
Section 658A-25(a), HRS[.]” After the circuit court granted
UPW’s motion, UPW then moved the circuit court to order the
State “to show cause why [it] should not be held in civil
contempt for disobeying the Court’s May 18, 2010 order granting
the UPW’s motion to confirm and to enforce arbitration award[.]”
However, as discussed above, the circuit court did not have
jurisdiction over the interest arbitration under chapter 658A.
Therefore, the circuit court lacked jurisdiction to consider
UPW’s motion to confirm the arbitration award, as well as its
motion for show cause order.
UPW contends that it was deprived of a statutory means
to enforce the award through a motion for show cause order and
for civil contempt. Although “[c]onfirmation of an arbitration
award is an expeditious procedure for reducing or converting the
arbitration award to a judgment which can be enforced by
judicial writ[,]” Mikelson v. United Servs. Auto. Ass’n, 122
Hawaiʻi 393, 395, 227 P.3d 559, 561 (App. 2010) (citations and
quotation marks omitted), the circuit court’s lack of
jurisdiction in this case does not deprive UPW of a statutory
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means to enforce the arbitration award under chapter 89.
Section 89-11(g) (Supp. 2004) provides that “[t]he decision of
the arbitration panel shall be final and binding upon the
parties on all provisions submitted to the arbitration panel.”
Section 89-11(g) requires that “[t]he parties shall take
whatever action is necessary to carry out and effectuate the
final and binding agreement[,]” set forth in the arbitration
decision. If a party does not comply with this requirement to
carry out the arbitration decision, the aggrieved party can
bring a prohibited practice complaint under HRS chapter 89,
including HRS §§ 89-13(a)(6) or (b)(3) for “[r]efus[ing] to
participate in good faith in the mediation and arbitration
procedures set forth in section 89-11”; and HRS §§ 89-13(a)(7)
or (b)(4) for “[r]efus[ing] or fail[ing] to comply with any
provision of this chapter[.]” The HLRB, upon finding that a
party has committed a prohibited practice by not complying with
the arbitration award, “may require the respondent to do any or
all of the following: to cease and desist from the prohibited
practice found to have been committed; to suspend the
respondent’s rights, immunities, privileges, or remedies granted
or afforded by chapter 89, HRS, for not more than one year; or
to require the respondent to take such affirmative action as
will effectuate the purpose of chapter 89, HRS . . . [.]” HAR
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§ 12-42-50 (effective 1981-2014). In the event a party does not
abide by the HLRB’s order to enforce the award, the HLRB can
petition the circuit court “for the enforcement of the order and
for appropriate temporary relief or restraining order . . . [.]”
HAR § 12-42-51 (effective 1981-2014). Any party disagreeing
with the HLRB’s decision relating to the enforcement of an
arbitration award may also file an administrative appeal in the
circuit court of the HLRB’s decision pursuant to HRS § 91-14
(Supp. 2004). In light of the extensive administrative remedies
available under chapter 89, and the right to an administrative
appeal under HRS § 91-14, the statutory scheme set forth in
chapter 89 provides participants in the impasse procedure with
sufficient means to enforce an HRS § 89-11 arbitration award.
Accordingly, the ICA was correct to conclude that the
circuit court’s order denying UPW’s motion for civil contempt
should be vacated for lack of subject matter jurisdiction. 28
28
It appears the ICA relied on its jurisdictional analysis in part
II.B. of its opinion, which, as discussed supra, is erroneous to the extent
that it presumes the circuit court had jurisdiction under chapter 658A and
that the HLRB’s exclusive original jurisdiction prevails because of HRS § 89-
19. Nevertheless, the ICA was correct to conclude that the circuit court
lacked jurisdiction to decide the motion for show cause order. See Strouss
v. Simmons, 66 Haw. 32, 40, 657 P.2d 1004, 1010 (1982) (“An appellate court
may affirm a judgment of the lower court on any ground in the record which
supports affirmance.”).
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E. The HLRB had the authority to select the neutral arbitrator
UPW argues that the HLRB exceeded its authority by
ordering the AAA to appoint the neutral arbitrator.
Specifically, UPW contends the HLRB could not fashion a remedy
beyond what was contemplated by the parties’ MOA, which set
forth that the neutral arbitrator would be selected by having
the parties alternately strike names from an AAA list until a
single name was left. Contrary to UPW’s contentions, the HLRB
had the authority to fashion such a remedy and under the
circumstances did not abuse its discretion in ordering such a
remedy.
Section 89-5(i)(4) grants the HLRB broad authority
regarding prohibited practice complaints. Section 89-5(i)(4)
provides that the HLRB shall “[c]onduct proceedings on
complaints of prohibited practices by employers, employees, and
employee organizations and take such actions with respect
thereto as it deems necessary and proper[.]” (Emphasis added).
Moreover, under HAR § 12-42-71 (effective 1981-2014), which
governs the selection and certification of an arbitration panel
during an HRS § 89-11 impasse, “[i]f either the public employer
or exclusive bargaining representative fails to select an
arbitrator within three days after the filing of the arbitration
notification, the board shall select an arbitrator from the
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register of arbitrators.” See State v. Kotis, 91 Hawaiʻi 319,
331, 984 P.2d 78, 90 (1999) (“Administrative rules, like
statutes, have the force and effect of law.”) (citing State v.
Kirn, 70 Haw. 206, 208, 767 P.2d 1238, 1239–40 (1989)).
In addition to the HLRB’s express powers, it is also
“well established that an administrative agency’s authority
includes those implied powers that are reasonably necessary to
carry out the powers expressly granted.” Morgan v. Planning
Dep’t, Cnty. of Kauai, 104 Hawaiʻi 173, 184, 86 P.3d 982, 993
(2004). Indeed, in Del Monte Fresh Produce (Hawaii), Inc. v.
International Longshore & Warehouse Union, Local 142, AFL-CIO,
112 Hawaiʻi 489, 506, 146 P.3d 1066, 1083 (2006), this court
stated that the “as the board may deem proper” phrase in then-
HRS § 377-9(d), “show[ed] that the Hawaiʻi legislature empowered
the HLRB with discretion to determine appropriate remedies for
the commission of unfair labor practices.”
In the instant case, the remedy provided by the HLRB,
i.e., ordering the AAA to select the neutral arbitrator, was not
an abuse of discretion. As the ICA noted, “[t]he purpose of HRS
§ 89-11 is to facilitate the timely resolution of an impasse in
negotiations over collective bargaining agreements[,]” and time
was of the essence given that the prior CBA had expired on
June 30, 2009. As discussed supra, despite the necessity of
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resolving the impasse quickly, the parties continued to delay
the selection of the neutral arbitrator.
Specifically, although the parties agreed to select
the neutral arbitrator within five days of receiving the AAA
list on July 17, 2009, they mutually agreed to extend the date
to July 28, 2009. During this period, the parties could not
select the neutral arbitrator. From July 15, 2009 to July 28,
2009, the State’s bargaining representative, Laderta, repeatedly
attempted to contact UPW’s bargaining representative, Nakanelua,
but according to Laderta, Nakanelua would not return Laderta’s
calls. Then, on July 28, 2009, UPW’s counsel, Takahashi,
informed the State that he would be representing UPW in the
selection. The parties took more time by conducting their
communications through letter. Only after Halvorson, the
State’s counsel, requested the HLRB’s assistance, did the
parties begin to strike names off the AAA list. However, the
parties only managed two strikes by August 20, 2009, before
filing prohibited practice complaints against each other.
Because of the parties’ conduct, none of the five arbitrators
could be scheduled for the date set by the MOA for the
arbitration, September 11, 2009. The HLRB thus found that both
parties had been responsible for the “undue delay” in the
selection of the neutral arbitrator. Indeed, by the time the
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HLRB entered its September 25, 2009 order for interlocutory
relief, the parties had allowed the CBA to expire for over three
months without negotiating a renewal. Given these
circumstances, the HLRB did not abuse its discretion in ordering
the AAA to select the neutral arbitrator from the remaining
three names on the AAA list.
IV. Conclusion
The ICA’s April 4, 2014 judgment on appeal is
affirmed, as clarified by this opinion.
Rebecca L. Covert /s/ Mark E. Recktenwald
and Davina W. Lam
for petitioner /s/ Paula A. Nakayama
Nelson Y. Nabeta /s/ Richard W. Pollack
for respondent
/s/ Michael D. Wilson
State of Hawaiʻi
/s/ Rom A. Trader
Sarah Hirakami
for respondent HLRB
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