In the Matter of United Public Workers, Afscme Local 646, Afl-Cio v. Watada

LAW LIBRARY
NOT FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER

NO. 29410
IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI‘I

Civil No. 07-1-0456 shee
In the Matter of
UNITED PUBLIC WORKERS, AFSCME, LOCAL 646,

AFL-CIO ee
Complainant/Appellant-Appellant, == =
Vv. 2 ¢ nN
ROBERT WATADA, Chairperson, Wai‘alae School Board, Wak\a@lae =.

Elementary School; STATE OF HAWAII; WAL‘ALAE ELEMEN'PARY
SCHOOL, STATE OF HAWAIT; and JONATHAN A. SWANSON, Deputy
Attorney General, State of Hawaii (2004-008),
Respondents/Appellees-Appellees,

and
HAWAII LABOR RELATIONS BOARD,
Agency/Appellee-Appellee

and

Civil No. 07-1-0457
In the Matter of
UNITED PUBLIC WORKERS, AFSCME, LOCAL 646,

AFL-CIO,
Complainant /Appellant-Appellant,

Vv.

ROBERT WATADA, Chairperson, Wai‘alae School Board,
Wai‘alae Elementary School; DEPARTMENT OF EDUCATION,
STATE OF HAWATIT;

PATRICIA HAMAMOTO, Superintendent,
Department of Education,

State of Hawaii (2005-069),
Respondents/Appellees-Appellees,

and
‘HAWAII LABOR RELATIONS BOARD,
Agency/Appellee-Appellee

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(By:

MEMORANDUM OPINION
Nakamura, C.J.,

Foley and Fujise, JJ.)

This secondary appeal arises out of a dispute over the
decision to privatize food services at Wai‘alae Elementery School
(the School), a public charter school.

Complainant /Appellant-
Appellant United Public Workers, AFSCME, Local 646, AFL-CIO

(UPW)
appeals from the First Amended Final Judgment filed in Civil Nos.

qa
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07-1-0456 and 07-1-0457'! on October 6, 2008 in the Circuit Court
of the First Circuit? (circuit court). Pursuant to the April 22,
2008 "Order Affirming Agency-Appellee Hawaii Labor Relations
Board's Order Nos. 2424 and 2425 Dated February 8, 2007," the
circuit court entered judgment in favor of Respondents/Appellees-
Appellees Robert Watada (Watada), Chairperson, Wai‘alae School
Board, Wai’alae Elementary School; the State of Hawai‘i (the
State); the School; and Jonathan A. Swanson (Swanson), State of
Hawai'i Deputy Attorney General; and Agency/Appellee-Appellee
Hawaii Labor Relations Board (HLRB) and against UPW.

On appeal, UPW contends the circuit court erred

(1) "by its refusal to reverse [the HLRB] which
violated its mandate under HRS § 89-14 [(1993)] to exercise
‘exclusive original jurisdiction' over prohibited practices not
decided by an arbitrator";

(2) "by affirming [HLRB] orders which are ‘affected by
error of law' because the arbitrator declined to consider and
decide the statutory issues against either" the School or the
State of Hawai‘i Department of Education (DOE); and

(3) "when it declined to reverse the [HLRB] for its
failure to follow established case precedent under [Spielberg
Mfg. Co., 112 N.L.R.B. 1080 (1955),] and its deferral procedure."

I. BACKGROUND

UPW is the exclusive bargaining representative of blue-
collar, non-supervisory employees in bargaining Unit 1. UPW and
the State of Hawai‘i are parties to a collective bargaining
Unit 1 Agreement (CBA), which sets forth a grievance procedure
for addressing disputes that arise out of the CBA. The CBA was
in effect from July 1, 1999 to June 30, 2003 and was extended to
June 30, 2005.

+ Civil Nos. 07-1-0456 and 07-1-0457 were consolidated by the circuit

court on July 16, 2007.

2 The Honorable Sabrina S. McKenna presided.

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On December 15, 2003, the DOE notified UPW and
cafeteria employees in Unit 1 assigned to the School that the
cafeteria at the School would close in four days. On
December 23, 2004, UPW filed a prohibited practice complaint
before the HLRB over the closure of the cafeteria and the
displacement of Unit 1 employees. The parties negotiated a
settlement culminating in the March 3, 2004 "Memorandum of
Agreement Between State of Hawaii Department of Education, the
Wai‘alae Elementary School, and the United Public Workers"
(Settlement Agreement). The Settlement Agreement obligated the
School to purchase school meals from the DOE through Anuenue
Elementary School.

Because Watada refused to sign off on the Settlement
Agreement, on March 24, 2004, UPW filed a Prohibited Practice
Complaint against Watada, the School, and Swanson (collectively,
558 Respondents) before the HLRB in Case No. CE-01-558. UPW
alleged that the refusal of the 558 Respondents to sign the
Settlement Agreement amounted to a refusal to bargain in good
faith in violation of HRS § 89-13(a) (Supp. 2009). On June 30,
2004, the HLRB granted UPW's motion for summary judgment and
ordered that Watada and the School shall cease and desist from
repudiating the Settlement Agreement and shall execute and
implement the Settlement Agreement (HLRB Order No. 2264 in Case
No. CE-01-558). On April 28, 2005, UPW filed a motion to enforce
HLRB Order No. 2264 in Case No. CE-01-558. On May 17, 2005, the
HLRB joined the DOE as a party to the proceeding.

In the meantime, on March 28, 2005, UPW filed another
Prohibited Practice Complaint before the HLRB against Watada and
Patricia Hamamoto (Hamamoto), the DOE Superintendent,
(collectively, 594 Respondents) in Case No. CE-01-594 for
Respondents! alleged failure to provide complete information in
response to UPW's requests. UPW alleged that this failure
amounted to violations of HRS § 89-13(a). UPW thereafter amended

its complaint in CE-01-594 to reflect that "information provided
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to UPW to date by [594 Respondents] indicate[s] that respondents
have wilfully failed to comply with the terms and provisions of
the March 3, 2004 [Settlement Agreement] ."

UPW moved to defer the prohibited practices alleged in
both Case No. CE-01-558 and Case No. CE-01-594 to arbitration.
The HLRB granted the motions.

Finding no agreement to arbitrate grievances between
the School and UPW, Arbitrator Uesato (Uesato) dismissed the
School from the arbitration. UPW subsequently, on March 8, 2006,
filed a motion in each case to reopen proceedings between UPW and
Watada/the School. On February 8, 2007, HLRB denied each motion
in HLRB Order Nos. 2424 (CE-01-558) and 2425 (CE-01-594).

UPW timely filed a notice of appeal to the circuit
court in each case, challenging HLRB Order Nos. 2424 (Civ. No.
07-1-0456) and 2425 (Civ. No. 07-1-0457). The circuit court
consolidated the cases.

On December 18, 2007, Uesato issued his final award as
to the remaining parties (not including Watada and the School) in
the arbitration proceedings. The DOE filed a special proceeding
to confirm Uesato's award and UPW, in the same proceeding, filed
a motion to confirm in part, vacate in part, and modify or
correct in part the award. By orders dated March 10 and
March 18, 2008, in the special proceeding, the circuit court
vacated Uesato's dismissal of the School and remanded the case to
Uesato for further arbitration proceedings as to the School. The
circuit court also affirmed the arbitration award as to the DOE,
but authorized Uesato to modify the remedy as to the DOE if
Uesato determined that such modification was appropriate
following the arbitration with the School.

The circuit court held a hearing on March 17, 2008
regarding the two consolidated civil cases and on April 22, 2008,
filed its Order Affirming Agency-Appellee [HLRB's] Order Nos.
2424 and 2425 Dated February 8, 2007. on September 16, 2008, the
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circuit court denied UPW's motion for reconsideration of the
order affirming the HLRB orders. This timely appeal followed.
Il. STANDARDS OF REVIEW

A. Administrative Agency Decisions-Secondary Appeals

Review of a decision made by the circuit court upon
its review of an agency's decision is a secondary
appeal. The standard of review is one in which [the
appellate] court must determine whether the circuit
court was right or wrong in its decision, applying the
Standards set forth in HRS § 91-14(g) [(1993)] to the
agency's decision.

Korean Buddhist Dae Won Sa Temple of Hawai‘i v. Sullivan, 87
Hawai'i 217, 229, 953 P.2d 1315, 1327 (1998) (quoting Bragg
v. State Farm Mutual Auto. Ins., 81 Hawai'i 302, 304, 916
P.2d 1203, 1205 (1996)) (alteration in original). HRS

§ 91-14, entitled "Judicial review of contested cases,"
provides in relevant part:

(g) Upon review of the record the court may
affirm the decision of the agency or remand the case
with instructions for further proceedings; or it may
reverse or modify the decision and order if the
substantial rights of the petitioners may have been
prejudiced because the administrative findings,
conclusions, decisions, or orders are:

(1) In violation of constitutional or
statutory provisions; or

(2) In excess of the statutory authority or
jurisdiction of the agency; or

(3) Made upon unlawful procedure; or
(4) Affected by other error of law; or
(5) Clearly erroneous in view of the reliable,

probative, and substantial evidence on the
whole record; or

(6) Arbitrary, or capricious, or characterized
by abuse of discretion or clearly
unwarranted exercise of discretion.

"[TU]nder HRS § 91-14(g), conclusions of law are reviewable

under subsections (1), (2), and (4); questions regarding
procedural defects under subsection (3); findings of fact
under subsection (5); and an agency's exercise of discretion
under subsection (6)." In re Hawaiian Elec. Co., 81 Hawai‘i

459, 465, 918 P.2d 561, 567 (1996) (citing Outdoor Circle v.
Harold K.L. Castie Trust Estate, 4 Haw. App. 633, 638-39,
675 P.2d 784, 789 (1983)).
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Citizens Against Reckless Dev. v. Zoning Bd. of Appeals of City &

County of Honolulu, 114 Hawai‘i 184, 193, 159 P.3d 143, 152

(2007) (some brackets in original and some added).
B. Statutory Interpretation

Questions of statutory interpretation are questions of
law to be reviewed de novo under the right/wrong standard.

Our statutory construction is guided by the following
well established principles:

our foremost obligation is to ascertain and give
effect to the intention of the legislature, which is
to be obtained primarily from the language contained
in the statute itself. And we must read statutory
language in the context of the entire statute and
construe it in a manner consistent with its purpose.

When there is doubt, doubleness of meaning, or
indistinctiveness or uncertainty of an expression used
in a statute, an ambiguity exists.

In construing an ambiguous statute, the meaning
of the ambiguous words may be sought by examining the
context, with which the ambiguous words, phrases, and
sentences may be compared, in order to ascertain their
true meaning. Moreover, the courts may resort to
extrinsic aids in determining legislative intent. One
avenue is the use of legislative history as an
interpretive tool.

[The appellate] court may also consider the reason and

spirit of the law, and the cause which induced the
legislature to enact it to discover its true meaning.

Lingle v. Hawai'i Gov't Employees Ass'n, AFSCME, Local 152, 107

Hawai'i 178, 183, 111 P.3d 587, 592 (2005) (internal quotation
marks, brackets and ellipses omitted) (quoting Guth v. Freeland,
96 Hawai'i 147, 149-50, 28 P.3d 982, 984-85 (2001)).

III. DISCUSSION .

UPW contends the circuit court erred in affirming HLRB
Orders Nos. 2424 and 2425. UPW argues that the HLRB's refusal to
reopen and determine the prohibited practice claims after Uesato
declined to determine them violates "the clear statutory mandate"

of HRS § 89-14. HRS § 89-14 provides:
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§89-14 Prevention of prohibited practices. Any
controversy concerning prohibited practices"! may be
submitted to the [HLRB] in the same manner and with the same
effect as provided in section 377-9"!; provided that the
{[HLRB] 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(e) or (2) the judicial review of
decisions or orders of the [HLRB] 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,

(Emphasis and footnotes added.)
Watada, the School, and the HLRB argue that the HLRB
did exercise exclusive original jurisdiction over the dispute,

but, at UPW's request, deferred such jurisdiction to Uesato and

3 HRS § 89-13 (Supp. 2009) defines prohibited practices. It provides
in relevant part:

§89-13 Prohibited practices; evidence of bad faith. (a) It
shall be a prohibited practice for a public employer or its
designated representative wilfully to:

(1) Interfere, restrain, or coerce any employee in the
exercise of any right guaranteed under this chapter;

(3) Discriminate in regard to hiring, tenure, or any term
or condition of employment to encourage or discourage
membership in any employee organization;

(5) Refuse to bargain collectively in good faith with the
, exclusive representative as required in section 89-9;

(6) Refuse to participate in good faith in the mediation
and arbitration procedures set forth in section 89-11;

(7) Refuse or fail to comply with any provision of this
chapter;
(8) Violate the terms of a collective bargaining

agreement [.]
* HRS § 377-9 (1993) provides in relevant part:

§377-9 Prevention of unfair labor practices. (a) Any
controversy concerning unfair labor practices may be submitted to
the [HLRB] in the manner and with the effect provided in this
chapter, but nothing herein shall prevent the pursuit of relief in
courts of competent jurisdiction.

(b) Any party in interest may file with the [HLRB] a

written complaint, on a form provided by the [HLRB], charging any
person with having engaged in any specific unfair labor practice.

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did not retain conditional jurisdiction over the prohibited
practice claims against the School. Watada and the School
further argue that by determining that the CBA did not apply to
the School and thereby dismissing the School from arbitration,
Uesato effectively addressed the prohibited practice claims
against the School because "the prohibited practice claims
against the School are completely reliant upon the existence of
underlying contract violations." Watada and the School
accordingly explain that "absent a determination that the [CBA]
applied to the School at the time that the [Settlement Agreement]
was executed and the grievance was filed, any ground for alleging
that the School committed a prohibited practice of any kind

is baseless."

The narrow legal issue presented by this appeal is
whether the HLRB's denial of UPW's motions to reopen proceedings
as to the School violated HRS § 89-14.

HRS Chapter 89 is titled "Collective Bargaining in
Public Employment." The chapter is intended to establish
"guidelines for public employment relations . . .; to provide a
rational method for dealing with disputes and work stoppages; and
to maintain a favorable political and social environment." HRS
§ 89-1(a) (Supp. 2009). To this end, Chapter 89, among others,
"creat[es] a labor relations board to administer the provisions
of chapters 89 and 377." HRS § 89-1(b) (3) (Supp. 2009).

The HLRB is empowered to resolve controversies arising
under Chapter 89. HRS § 89-5(i) (3) (Supp. 2009); see Jordan v.
Hawaii Gov't Employees' Ass'n, Local 152, AFSCME, AFL-CIO, 472 F.

Supp. 1123, 1127 (D. Hawai'i 1979). HRS § 89-14 vests HLRB with
"exclusive original jurisdiction" over controversies involving
"prohibited practices."

Chapter 89 also expressly authorizes parties toa
collective bargaining agreement to establish means of addressing

contractual disputes:
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§89-10.8 Resolution of disputes; grievances. (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[.]

HRS § 89-10.8(a) (Supp. 2009). We note that these grievance
procedures address disputes "concerning the interpretation or
application of a written agreement." Id.

Uesato's decision to dismiss the School from
arbitration arose from such a dispute. The School questioned
whether there was any basis that compelled arbitration between
UPW and the School. In dismissing the School as a party to the
arbitration, Uesato addressed that preliminary issue, concluding
that there was "no basis for the Arbitrator to exercise
jurisdiction over [the School]" and noting that "[t]he ground for
[the School's] dismissal was the absence of an arbitration
agreement between [the School] and the UPW."

Consequently, when UPW moved to reopen the HLRB
proceedings on March 8, 2006, it was clear from Uesato's decision
to dismiss the School from the arbitration that Uesato would not
reach the statutory issues, i.e., the School's alleged violations
of HRS § 89-13. In light of Uesato's decision to dismiss the
School, those issues should have been resolved by the HLRB, which
has exclusive original jurisdiction over prohibited practice
claims under HRS § 89-14. .

We accordingly hold that the circuit court erred in
affirming the HLRB's orders denying UPW's motions to reopen
proceedings as to the School. HLRB Order No. 2424 in Case No.
CE-01-558 and Order No. 2425 in Case No. CE-01-594 prejudiced
UPW's substantial rights and violated HRS § 89-14. Citizens
Against Reckless Dev., 114 Hawai‘i at 193, 159 P.3d at 152.

Our decision that the circuit court erred in affirming
HLRB Orders Nos. 2424 and 2425 is based on the circumstances

presented to the HLRB at the time the HLRB entered these orders.
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We note that since that time,

the circuit court vacated Uesato's

dismissal of the School from the arbitration proceedings and

remanded the case to Uesato for further arbitration proceedings

with respect to the School.

We are not apprised of the present

state of the remanded arbitration proceedings regarding the

School,

proceedings under the current circumstances.

and we do not address whether the HLRB should reopen the

We merely address

the narrow legal issue of whether the circuit court erred in

affirming HLRB Orders Nos.
Iv.

2424 and 2425.

CONCLUSION

We vacate the First Amended Final Judgment filed in

Civil Nos.

07-1-0456 and 07-1-0457 on October 6,

2008 in the

Circuit Court of the First Circuit and remand for proceedings

consistent with this opinion.

DATED: Honolulu,

On the briefs:

Herbert R. Takahashi

Rebecca L. Covert

(Takahashi Vasconcellos &
Covert)

for Complainant/Appellant -

Appellant.

Richard H. Thomason,

Deputy Attorney General,
for Respondents/Appellees-
Appellees Robert Watada and
Wai‘alae School.

Valri Lei Kunimoto
for Agency/Appellee-
Appellee Hawaii Labor
Relations Board.

Hawai‘i,

10

June 24,

2010.

tess “Af. Vink wmune—

Chief Judge
onil? Ree

Associate cone.