UNITED PUBLIC WORKERS, AFSCME v. Hanneman

• Decision Date: 28 January 2005
• Docket Number: No. 25442.,25442.
• Citation: 106 Haw. 359,105 P.3d 236
• Parties: UNITED PUBLIC WORKERS, AFSCME, LOCAL 646, AFL-CIO, Complainant-Appellee/Cross-Appellant, v. Mufi HANNEMAN, Mayor, City and County of Honolulu; Kenneth Nakamatsu, Director, Department of Human Resources, City and County of Honolulu; and Frank Doyle, Refuse Collection and Disposal Division Chief, Department of Environmental Services, City and County of Honolulu, Respondents-Appellants/Cross-Appellees, and Hawai'i Labor Relations Board; Brian K. Nakamura, Chairperson; Chester C. Kunitake and Kathleen Racuya-Markrich, Board Members, Agency-Appellees/Cross-Appellees.
• Court: Hawaii Supreme Court

105 P.3d 236

106 Haw. 359

UNITED PUBLIC WORKERS, AFSCME, LOCAL 646, AFL-CIO, Complainant-Appellee/Cross-Appellant, v. Mufi HANNEMAN, Mayor, City and County of Honolulu; Kenneth Nakamatsu, Director, Department of Human Resources, City and County of Honolulu; and Frank Doyle, Refuse Collection and Disposal Division Chief, Department of Environmental Services, City and County of Honolulu, Respondents-Appellants/Cross-Appellees, and Hawai'i Labor Relations Board; Brian K. Nakamura, Chairperson; Chester C. Kunitake and Kathleen Racuya-Markrich, Board Members, Agency-Appellees/Cross-Appellees.

No. 25442.

Supreme Court of Hawai`i.

January 28, 2005.

Paul T. Tsukiyama and Paul K.W. Au, Deputies Corporation Counsel, on the briefs, for respondents-appellants/cross-appellees.

Herbert R. Takahashi, Honolulu, (of Takahashi, Masui, & Vasconcellos), on the briefs, for complainant-appellee/cross-appellant UPW.

Valri Lei Kunimoto, Honolulu, on the briefs, for agency-appellees/cross-appellees HLRB, joining in UPW's answering brief.

MOON, C.J., LEVINSON, NAKAYAMA, ACOBA, and DUFFY, JJ.

Opinion of the Court by MOON, C.J.

Respondents-appellants/cross-appellees Mufi Hanneman, Mayor of the City and County of Honolulu; Kenneth Nakamatsu, Director of the Department of Human Resources for the City and County of Honolulu; and Frank Doyle, Refuse Collection and Disposal Division Chief of the Department of Environmental Services for the City and County of Honolulu¹ [collectively, the City], appeal from the first circuit court's October 4, 2002 final judgment, affirming agency-appellee/cross-appellee the Hawai'i Labor Relations Board's (HLRB) Decision No. 433 [hereinafter, HLRB's order].² On appeal, the City argues that the circuit court erred in failing to overturn the HLRB's order because the HLRB (1) committed an error of law in concluding that employee transfers are subject to collective bargaining under Hawai'i Revised Statutes (HRS) § 89-9(a) and (2) misapplied the terms of an addendum to complainant-appellee/cross-appellant United Public Workers, AFSCME, Local 646, AFL-CIO's (UPW)³ collective bargaining agreement (CBA) with the City. Inasmuch as the first issue is dispositive of this appeal, we do not address the City's second contention.

For the following reasons, we reverse the October 4, 2002 judgment.

I. BACKGROUND

Briefly stated, the instant case arises from a dispute between the City and UPW regarding the City's proposal to unilaterally transfer ten manual refuse collection workers from its Pearl City baseyard to the Honolulu baseyard due to a workforce deficiency in Honolulu and a surplus of collectors in Pearl City. UPW complained to the HLRB, asserting that the City committed a prohibited practice by failing to negotiate the transfers. The HLRB agreed, ruling that the City's transfer of workers was subject to collective bargaining.

A. Factual Background

1. Manual Refuse Collection in the City and County of Honolulu: "Uku Pau"

Prior to the 1990s, all refuse collection in the City and County of Honolulu was performed manually through what is referred to as the "uku pau" system. Under the uku pau system, "a certain quantum of work is determined and designated as the equivalent of an 8-hour day's work, which can be completed at the will and pace of each work crew." In other words, all refuse crews worked at their own pace, were free to leave when their assignments were completed, and were not subject to the eight-hour work day applicable to other civil servants.

In 1973, the City and UPW codified the policies for the uku pau system in a written task work agreement (TWA) entitled "Policies and Procedures on Task Work for Refuse Collection." Section 11 of the TWA sets forth the "route policy" for the uku pau system and states in pertinent part:

A. The home collection and delivery to designated disposal sites of not more than 24,000 lbs. of refuse on the first day pickup of a route by each refuse collection crew shall be recognized as the work standard or task day, and shall be the basis on which routes shall be aligned under existing operations.

. . . .

H. There will be no layoffs, transfers out of yards or Division, or change in pay status as a result of initiating this route policy; however, subsequent changes may be made pursuant to applicable rules and policies.[⁴]

(Emphasis added.) In 1989 and thereafter, the City agreed to expressly incorporate the TWA into the CBA under section 51.04.

2. Automated Refuse Collection

In the 1990s, the City proposed an automated refuse collection system (ARCS) in an effort to modernize refuse operations on O'ahu. As a result, on July 1, 1991, the City and UPW entered into a memorandum of agreement (MOA) in which they agreed to test and evaluate the ARCS through a one-year demonstration project, which was to expire on June 30, 1992. Under the MOA, ARCS trucks — each operated by a single employee as opposed to the standard three — would service various areas throughout Leeward Oahu. On May 19, 1993, the project was extended by agreement to expire on June 30, 1994.⁵ Because of the concern that use of ARCS trucks might result in layoffs, the parties agreed that there would be no reduction in refuse collection staff as a result of continuing the ARCS project. However, the parties also specified in the MOA that, "[s]hould the need for reassignment or transfer of existing staff occur, such reassignment or transfer shall be determined on the basis of seniority."⁶

On June 16, 1994, the City and UPW entered into another MOA, converting two routes in the ARCS demonstration project into a permanent operation. This MOA embodied the first phase of the conversion from manual to automated refuse collection. After six subsequent phases, automated refuse collection was fully implemented on Oahu.

3. The City's Proposals for Employee Transfers

As a result of the completed conversion, some of the refuse baseyards had more manual collectors on staff than necessary. As a result, the City proposed an island-wide master pool system in which excess manual collectors from overstaffed baseyards would be temporarily placed, on a weekly basis, at baseyards experiencing staff shortages. Negotiations over the City's proposal took place sporadically throughout 2000, but a final agreement was never reached.

On August 16, 2001, the City gave UPW notice of its intent to unilaterally transfer thirteen manual collectors from the overstaffed Pearl City baseyard to the understaffed baseyard in Honolulu.⁷ Pursuant to the CBA, the transfer proposal was comprised of the employees with the least seniority in the Pearl City baseyard. Although the City offered to consult with UPW over this proposal under HRS § 89-9(c) (Supp.2000),⁸ UPW refused to meet, contending that the proposal required mandatory bargaining under HRS § 89-9(a) (Supp.2000).⁹ On September 26, 2001, the City withdrew its master pool proposal in light of its intent to alleviate the deficiency in the Honolulu baseyard through unilateral transfers, rather than a negotiated master pool agreement.

B. Procedural Background

On September 26, 2001, UPW filed its first amended complaint¹⁰ with the HLRB, alleging that, inasmuch as the City failed to negotiate over the transfer proposal, the City committed a prohibited practice in violation of HRS §§ 89-13(a)(1), (5), (7) and (8) (1993)¹¹ by, inter alia, wilfully (1) violating section 1.05 of the CBA¹² and (2) refusing to bargain in good faith over the mandatory subjects of collective bargaining prescribed by HRS § 89-9(a). The City responded, inter alia, that it did not commit a prohibited practice because the transfer proposal was not subject to negotiations under HRS § 89-9(d).

On March 15, 2002, the HLRB issued Decision No. 433, in which it identified the dispositive issue as whether the City's proposed transfer was prohibited by statute or the CBA. The HLRB ruled:

CONCLUSIONS OF LAW

1. This Board has jurisdiction over this complaint under HRS §§ 89-5(b) and 89-14.

2. HRS § 89-13(a)(8) provides that it is a prohibited practice for an employer to violate the terms of the collective bargaining agreement.

3. Based on the record, the Board concludes that the Employer violated Section 1.05 of the Unit 01 agreement and Subsection 11-H of the [TWA] by its unilateral decision to transfer ten manual refuse collection workers from the Pearl City baseyard to the Honolulu baseyard. The Employer thereby violated HRS § 89-13(a)(8).

4. In determining whether the proposed transfer of the employees at issue is an exercise of management rights, the Board applied a balancing test to determine whether interference with management rights precludes negotiations on matters affecting working conditions. The Board concludes that the Employer's transfer of refuse workers is likely to have a substantial impact on the terms and conditions of employment for employees subject to the [TWA] and the consequent disruption of seniority at both baseyards is likely to have a deleterious effect upon the exercise of bargained-for rights which are seniority-based. The Board cannot find that the management right to transfer supercedes the rights contained in the bargaining agreement.

CRA vol. 4 at 1449.

On April 15, 2002, the City appealed the HLRB's order to the circuit court pursuant to HRS § 91-14 (1993). On October 4, 2002, the circuit court entered its final judgment and order affirming the decision of the HLRB. On October 31, 2002, the City timely filed its notice of appeal to this court.

II. STANDARDS OF REVIEW

A. Review of an Agency Decision

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 this 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.

HRS § 91-14, entitled "Judicial review of contested cases,"

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