TAXWatch: Collective Bargaining Agreement – Supreme Law of the Land?

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The path leading to how to fix our battered economy has taken some crazy twists and turns.

Governor Ige, first, announced that he will furlough all state workers for two days a month to chop down the expenses required in state government.

The government employee unions cried foul, saying that the collective bargaining agreements and the laws empowering them prevent such a thing without the unions agreeing to them at the bargaining table.

The Governor, however, in his Emergency Proclamations, most recently the Sixteenth, suspended the collective bargaining laws.  Those proclamations suspend all of chapter 89, HRS.  They say, “The following specific provisions of law are suspended, as allowed by federal law … Chapter 89, HRS, collective bargaining in public employment.”

The unions, however, got the Hawaii Labor Relations Board to rule, on July 20, that the emergency proclamations did not suspend chapter 89 in its entirety, despite the language the proclamation uses.  At least one union hailed the ruling, although it does not seem to have been written.

So, this looks like a mess.  What is the actual law here, the collective bargaining agreement or the suspension of the collective bargaining law?

Recently, the Hawaii Labor Relations Board seems to have walked back its position.  In a written order filed in September in a case involving HSTA, the Board ruled that it did not have the authority to interpret HRS Chapter 127A, the statute giving governors and mayors emergency powers, or emergency proclamations.  “The Board does not take a position on whether or not any portion of any Emergency Proclamation suspends any part of HRS Chapter 89, as the Board does not have jurisdiction to consider such a question,” it wrote.

It turns out that most courts can’t weigh in on that question either.  HRS section 127A-27 says that only a three-person panel of Circuit Court judges can decide that the emergency powers statutes or emergency proclamations made under them are partly or wholly invalid, for whatever reason including unconstitutionality.  The law also says that the three-judge court is supposed to decide the matter very quickly—after all, we are in an emergency situation.

The Hawaii Labor Relations Board or any other government agency, therefore, would be acting beyond its proverbial pay grade if it tries to sweep aside the broad language in the emergency proclamation.  

If the unions want to prove that fouls occurred, namely violations of the collective bargaining law, as they claim, they need to go to a three-judge court to show that the collective bargaining law in fact has not been suspended.  

Or the Administration could go before the courts and get a judgment saying that its suspension of the collective bargaining laws is valid, so the unions and Hawaii Labor Relations Board had better back off.

If there continues to be uncertainty, then government leaders need to preserve “other options,” and we know what that means.  Senate President Ron Kouchi told the Honolulu Star-Advertiser that “we’re preparing to try to find solutions that wouldn’t involve the furloughs because of the possibility that we wouldn’t prevail in a court case,” he said.  Which means that tax increases need to be on the table.

And then, of course, Governor Ige told Civil Beat that he was also contemplating some tax increase proposals “just to make everything work.”

Could we get some clarity, quick, on whether this Chapter 89 suspension is valid, so the fight over the furlough options can be decided quickly before we taxpayers are caught in the crossfire?

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Tom Yamachika is the President of the Tax Foundation of Hawaii, a private, nonprofit educational organization dedicated to informing the taxpaying public about the finances of our state and local governments in Hawaii. Tom is also a tax attorney in solo practice and has been since early 2013. Prior to 2013, he was with the accounting firm Accuity LLP, which was formed in 2006 from the Honolulu office of Coopers & Lybrand (which later became PricewaterhouseCoopers). Before that, he served as an Administrative Rules Specialist in the State of Hawaii Department of Taxation from 1994 to 1996, where he drafted rules, interpretive releases, and legislation on several different state taxes. Prior to that, he practiced litigation and tax law with Cades Schutte Fleming & Wright in Honolulu.