§323F-57 Employment, wages, and benefits. (a) The corporation 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 tempering the adverse effect of layoffs by amending the employees' collective bargaining agreements pursuant to section 89-8.5.

(b) The employees working at a transferred facility shall be subject to laws and regulations that apply to private sector employees. The employees of a private entity or its nonprofit management entity shall not be governed by state laws that apply to public officers and employees of the State including but not limited to section 76-16(b) and all other sections of chapter 76, chapters 89, 89A, and 89C, and any other laws and regulations that govern public or government employment in the State.

(c) The private entity or its nonprofit management entity shall offer all employees of the pre-transfer facility, employment for a period of no less than six months after the transfer completion date.

(d) No employee of the corporation 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.

(e) Subject to subsection (c), the private entity or its nonprofit management entity shall take all reasonable steps necessary to provide for a smooth transition of employees from state employment to private employment by the private entity or its nonprofit management entity at a transferred facility. [L 2015, c 103, pt of §2]

Case Notes

Although plaintiff argued that Act 103, Session Laws of Hawaii 2015, violated the contract clause of the United States Constitution because it interfered with the collective bargaining agreement (CBA) between unions representing public employees and the state Hawaii Health Systems Corporation (HHSC), court found that the transfer of management and operation of three state-owned medical facilities to a private entity did not substantially impair the CBA. The CBA did not guarantee employment for the duration of the CBA, contained no explicit or implicit term that required the HHSC to operate any facility for the duration of the CBA, and explicitly contemplated possibility of employer-wide layoff, as well as layoffs due to a lack of work, needs, or funds. 166 F. Supp. 3d 1159 (2016).

Plaintiff did not demonstrate that Act 103, Session Laws of Hawaii 2015, which directed the governor to transfer management and operation of three state-owned medical facilities to a private entity, conflicted with a provision of Act 262, Session Laws of Hawaii 1996, which established the state Hawaii Health Systems Corporation (HHSC), that prohibited the agency to enter into contractual or business relations, so as to impair, in violation of the contract clause of the United States Constitution, collective bargaining agreement between state and union representing public employees who worked for HHSC. 166 F. Supp. 3d 1159 (2016).

Plaintiff did not show that Act 103, Session Laws of Hawaii 2015, substantially impaired any collective bargaining agreement provisions by depriving public employee union members, employed by the Hawaii Health Systems Corporation, of statutory protections concerning the State's civil service system and merit principle or public employees' bargaining rights. Thus, there was no violation of the contract clause since civil service positions were creations of state law and could be eliminated by legislative act without violating statutory protections. 166 F. Supp. 3d 1159 (2016).