COURTHOUSE NEWS SERVICE; REIN M. TERRADO ; AUGUST 10, 2015
HONOLULU (CN) – Privatization of three public hospitals in Hawaii will cost hundreds of employees their bargaining rights and impair their contracts, an AFSCME union local claims in court.
Gov. David Ige signed HB 1075 into law as Act 103 in June, allowing privatization of the Maui Memorial Medical Center, Kula Hospital and Clinic, and Lanai Community Hospital, all on the island of Maui.
The United Public Workers, American Federation of State, County & Municipal Employees, Local 646, AFL-CIO sued the governor on Aug. 6 in Federal Court, claiming the law impairs workers’ contracts and violates the Supremacy Clause of the Constitution.
“House Bill 1075 provides that, upon completion of such a transfer, the employees performing work in these facilities will lose the protections of public employment and shall not be governed by state laws that apply to public officers and employees of the state,” which “substantially impairs the obligations of … collective bargaining agreements,” the union says in the complaint.
The UPW/AFSCME represents 1,500 members at Hawaii Health System Corporation-managed facilities, including the Maui public hospitals. The union claims the state “was well aware of financial problems at HHSC’s Maui regional system at the time it entered into its binding, valid, enforceable contracts with UPW.”
Hospital workers “were hired and retained in accordance with the merit principle through a statewide merit system.”
“Under the merit principle, employees were afforded reasonable job security, and when layoffs occurred senior employees retained the right to bump junior employees not just within the healthcare facilities affected, but in any other governmental entities within the system.”
The union says the law should not be implemented at least until the state’s collective bargaining agreement expires.
“The Legislature could have made HB 1075 effective only upon expiration of the existing collective bargaining agreements,” the union says. “The rights, protections and benefits provided by the CBAs to employees in Unit 1 and Unit 10 are guaranteed for the entire length of the contract.”
Those agreements expire on July 1, 2017.
HB 1075 stated that leadership of Maui healthcare facilities and the “unions representing employees of the facility or facilities shall meet to discuss the impact of a transfer on the employees and the feasibility of tampering the adverse effect of layoffs by amending the employees’ collective bargaining agreements.”
It also requires the private management firm to “offer all employees of the pre-transfer facility, employment for a period of no less than six months after the transfer completion date,” and states that “no employee of the (healthcare facility) who is separated from service as a result of implementation of an agreement and transfer under this part shall suffer any loss of any previously earned rights, benefits or privileges.”
Two major health care organizations, Hawaii Pacific Health and Kaiser Permanente Hawaii, have expressed interest in managing the Maui public hospitals. Proposals are due Aug. 24 and transfer could begin next year.
Ige called the bill “a historic opportunity to transform the delivery of health care to the people of Maui.”
The bill’s author, House Speaker Joseph Souki, called the bill “absolutely essential for Maui residents.”
“The financial situation for Maui Memorial was not sustainable for the short or long run, and what we are doing today will open the doors for a vital public-private partnership to keep Maui’s hospitals open and to most importantly provide the appropriate and quality care for the people of Maui County,” Souki said.
Maui Memorial Medical Center, the only non-Oahu hospital that provides a full range of cardiac services, including open-heart surgery and angioplasty, lost more than $43 million last year.
The governor, Hawaii Health Systems and the Maui region board of directors would make the call on granting control of the Maui hospitals to Hawaii Pacific Health or Kaiser.
The union seeks a temporary restraining order and injunction to stop the governor from implementing HB 1075/Act 103 before the collective bargaining agreements expire.
It also seeks declaratory judgment that the law violates the Contract Clause of the constitution.
The office of the governor said the attorney general is reviewing the complaint.
The union is represented by Rebecca Covert with Takahashi and Covert.