Ruling on HGEA can still be rejected

By Lynda Arakawa and Gordon Y.K. Pang
Advertiser Capitol Bureau

An arbitration panel's expected decision tomorrow on pay raises for about 23,000 state and city workers has the state and its largest government employee union posturing for a fight even before the final figures are announced.

Last week Gov. Linda Lingle said she expects the raises awarded to most members of the Hawai'i Government Employees Association would be more than the state can afford, and that if so she would ask lawmakers not to authorize it.

Shortly afterward, state Budget Director Georgina Kawamura urged the Legislature to repeal the law passed just last year that restored binding arbitration for all HGEA collective bargaining units.

The chances of the Democratic-controlled Legislature following the Republican administration's wishes and alienating government worker unions, a big chunk of its political base, are slim in an election year. Also, lawmakers are crunching state budget numbers to make room for union raises.

Still, HGEA officials are making it clear that should their members' raises be rejected, the union will take the matter to court.

The state's offer to HGEA members included no raises in the first year and 1 percent in the second year, which would cost the state an estimated $6.3 million. The union wants 4 percent raises, including "steps" that allow employees to move up pay categories based on years of service, in each of the two years, estimated to cost the state a total of $98.5 million.

(An arbitrated decision for HGEA unit 9, which includes state nurses, has been reached.)

While the state and HGEA disagree about whether legislative bodies can reject raises awarded in binding arbitration proceedings, both sides acknowledge there is some ambiguity in the law.

State chief labor negotiator Ted Hong said one section of Hawai'i Revised Statutes' Chapter 89, which spells out the laws for collective bargaining, states that if either the Legislature or one of the county councils rejects cost items that were negotiated, the parties go back to the bargaining table.

The section dealing with binding arbitration, however, is silent on the issue, he said.

The law addressing binding arbitration states that the arbitration decision is "final and binding upon the parties" but also says "all items requiring any moneys for implementation shall be subject to appropriations by the appropriate legislative bodies." It does not say what happens if the money is not appropriated.

"It hasn't been challenged in court," Hong said. "I think an argument could be made that there is some ambiguity in the statute. I would hope, however, that based on past accepted practice of the parties, that everybody recognizes it goes back to further bargaining and negotiations."

He pointed to the Legislature's rejection of an award reached through binding arbitration in 1979. In that case, the state and counties went back into negotiations with the Hawai'i Fire Fighters Association and reached an agreement, he said.

"The danger for the state is the ambiguity in the statute," he said. "Because if there is a lawsuit about that, that it is final and binding, I have a big problem with that because I think it (would be) unconstitutional that an arbitrator could override the decision of a Legislature."

But HGEA deputy executive director Randy Perreira said the state and county cannot reverse itself through their legislative bodies once a decision reached by "final and binding" arbitration is made.

If either the Legislature or one of the county councils chooses to reject such a settlement, he said, HGEA could agree to go back to the bargaining table or litigate the matter in court.

But Perreira said: "I can assure you that if that were to take place, we'd be in court and we would be contesting the intent of the law, and really getting to the heart of it, what the term 'final and binding' is supposed to mean."

"I don't think the matter has ever been tested," he said. "And obviously, those who are proponents of the notion that the Legislature retains the authority to accept and reject, I'm sure they've got their opinion. And for those of use who believe final and binding means just that, final and binding, we've got our opinion."

Perreira said the clincher for him is the Legislature's vote last year to pass a bill restoring binding arbitration procedures for all HGEA units. Lawmakers, he said, "very clearly understood that and intended that passage of this law, taking away our right to strike and to use that as an economic weapon in a dispute, created a situation for them where once a panel renders its decisions, it's binding on all of the parties."

Lawrence Boyd, labor economist with the Center for Labor Education and Research at the University of Hawai'i-West Oahu, said the Legislature and the governor can renege on a binding arbitration award, and if that happens, "all bets are off" and HGEA would also have an option to strike.

But Boyd said he expects legislative bodies will honor the arbitration decision.

Lingle's public objections to HGEA's expected pay raises are similar to those made in the final years of the Cayetano administration.

Weeks before the HGEA's arbitrated raises were announced in 2000, then-Gov. Ben Cayetano said the Legislature would have to reject the pay increases because the state wouldn't be able to afford them. HGEA won raises at arbitration averaging 14.5 percent over four years.

In what could perhaps demonstrate how valuable unions are to the Hawai'i Democratic Party, the party platform adopted that year promised Democrats would support binding arbitration decisions, including the HGEA raises.

Cayetano threatened to veto the bill that set aside money to pay the raises, but eventually agreed to pay after the union accepted reduced vacation and sick-leave benefits for new hires.

This year, Honolulu Mayor Jeremy Harris is also calling for the City Council to reject raises for HGEA employees without even seeing the results of the arbitration.

Harris said there is no ambiguity in his mind about the issue. "People misuse the term 'binding arbitration,' " he said. "The law is clear. The arbitration is binding on the employer, but not binding on the legislative body that has to authorize the funding. The legislative body is not the employer. The governor and the mayors are the employers."

The "binding" part comes in, Harris said, if the legislative body approves the funding. "With any other funding, I can withhold it," he said. "If the Council appropriates, say, $10 million for a park, I don't have to spend $10 million. But I am bound by this binding arbitration, if the Council approves the funding, to implement it."

Honolulu City Council Budget Chairwoman Ann Kobayashi said approval is likely. "If the Legislature funds it and the other counties all fund it, I think we'd have a duty to agree to fund it," she said. "We don't want to be the ones that make everyone go back." She also said that HGEA workers deserve a raise.

Hawai'i County Council Chairman Jimmy Arakaki said the council could legally reject the raises, but "in the County of Hawai'i, we have funded it because to us, binding arbitration means binding arbitration."

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or at 525-8070.