REPORT TITLE:
Labor


DESCRIPTION:
Protects the State's proprietary interests in public works
projects by providing for card check agreements.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                            1670        
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO EMPLOYMENT.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The Hawaii Revised Statutes are amended by
 
 2 adding a new chapter to be appropriate designated and to read as
 
 3 follows:
 
 4                             "CHAPTER
 
 5               DETERMINATION OF UNION REPRESENTATION
 
 6      �   -1 Findings and purpose.  In the course of managing
 
 7 real property that it owns or otherwise carrying out its
 
 8 functions in the public interest, the State participates in real
 
 9 property development as a landlord, proprietor, lender, or
 
10 guarantor, facing the same risks and liabilities as other
 
11 business entities who participate in such ventures.  For example,
 
12 the State sometimes leases its real property under a percentage
 
13 lease; invests or pledges its resources in real estate
 
14 development projects as a landlord, a lender or guarantor; or
 
15 possesses a special relationship to the development of the
 
16 project such as with the Hawaii community development authority,
 
17 Aloha Tower development corporation, the high technology
 
18 development corporation, and convention center authority.  When
 
19 it engages in action of this nature, the State has an ongoing
 

 
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 1 proprietary interest in that development, and, thus, has a direct
 
 2 interest in its performance.
 
 3      In these circumstances, the State must make prudent business
 
 4 decisions, as does any private business entity, to ensure
 
 5 efficient and cost effective management of its business concerns,
 
 6 and to maximize benefit and minimize risk.  One such risk is the
 
 7 possibility of labor-management conflict arising from labor
 
 8 organizing campaigns.  Such conflict can adversely affect the
 
 9 State's interest in real estate developments and its proprietary
 
10 business interest by causing delay in the completion of projects,
 
11 by reducing revenue or increasing cost.
 
12      The effect of such disruption often extends beyond the
 
13 immediate parties involved due to picketing, consumer boycotts,
 
14 work stoppages, strikes, and sympathy strikes.  Access and use of
 
15 facilities, as well as delivery of services to the general public
 
16 and visitors likewise may be detrimentally affected.  The actual
 
17 adverse effect upon services, coupled with negative publicity
 
18 locally and nationally, may also harm the tourist and visitor
 
19 industry, upon which our State is uniquely dependent.
 
20      A constructive approach to alleviating these concerns and
 
21 the State's risk where it has a proprietary interest, is to
 
22 promote industrial peace by requiring employers operating within
 
23 state projects or districts, as a condition of the State's
 

 
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 1 investment and economic participation, to agree to a lawful,
 
 2 nonconfrontational alternative process for resolving a union
 
 3 organizing campaign.  That alternative process is known as a
 
 4 "card check", where employee preference regarding whether or not
 
 5 to be represented by a labor union for collective bargaining
 
 6 purposes is determined based on signed authorization cards.
 
 7 Private employers are authorized under existing federal law to
 
 8 agree voluntarily to use this procedure in lieu of election
 
 9 procedures supervised by the National Labor Relations Board.
 
10      The legislature finds based on local history that compliance
 
11 with these procedures will help reduce the possibility of labor-
 
12 management conflict jeopardizing the State's proprietary interest
 
13 in real estate development and other projects.  To ensure that
 
14 card check procedures are required only to the extent necessary
 
15 to ensure the goal of peaceful industrial relations, an employer
 
16 who agrees to such procedures and performs its obligations under
 
17 a card check agreement will be relieved of further obligation to
 
18 abide by these procedures if a labor organization engages in
 
19 economic action 8 such as striking, picketing, or boycotting the
 
20 employer in the course of an organizing drive at a site covered
 
21 by this chapter.
 
22      The sole purpose of this chapter is to protect the State's
 
23 proprietary interest in a particular project or district covered
 

 
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 1 hereby.  This chapter is not enacted to favor any particular
 
 2 outcome in the determination of employee preference regarding
 
 3 union representation, nor to make the procedure in such a
 
 4 determination to favor or hinder any party to such determination.
 
 5 Likewise, this chapter is not intended to regulate labor
 
 6 relations in any way, but is intended only to protect the State's
 
 7 proprietary interest in certain narrowly prescribed circumstances
 
 8 where the a county commits its economic resources and its related
 
 9 interest are put at risk by certain forms of labor-management
 
10 conflict.
 
11      �   -2  Definitions.  As used in this chapter:
 
12      "Card check agreement" means a written agreement between an
 
13 employer and a labor organization providing a procedure for
 
14 determining employee preference on the subject of whether to be
 
15 represented by a labor organization for collective bargaining,
 
16 and also, by which labor organization to be represented, which
 
17 provide, at a minimum, the following:
 
18      (1)  Determining employee preference regarding union
 
19           representation shall be by a card check procedure
 
20           conducted by neutral third party in lieu of a formal
 
21           election;
 
22      (2)  All disputes over interpretation or application of the
 
23           parties card check agreement, and over issues regarding
 

 
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 1           how to carry out the card check process or specific
 
 2           card check procedure shall be submitted to binding
 
 3           arbitration;
 
 4      (3)  Forbearance by any labor organization from economic
 
 5           action against the employer at the worksite of an
 
 6           organizing drive covered by this chapter, and in
 
 7           relation to an organizing campaign only (not to the
 
 8           terms of a collective bargaining agreement), so long as
 
 9           the employer complies with the terms of the card check
 
10           agreement; and
 
11      (4)  Language and procedures prohibiting the labor
 
12           organization or the employer from coercing or
 
13           intimidating employees, explicitly or implicitly, in
 
14           selecting or not selecting a bargaining representative.
 
15      "Collective bargaining agreement" means an agreement between
 
16 an employer and a labor organization regarding wages, hours and
 
17 other terms and conditions of employment of the employer's
 
18 employees.  For purposes of this chapter, a collective bargaining
 
19 agreement does not include a card check agreement as defined
 
20 herein.
 
21      "Developer" means any person, corporation, association,
 
22 general or limited partnership, limited liability company, joint
 
23 venture or other entity which does or which proposes to purchase,
 

 
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 1 lease, develop, build, remodel or otherwise establish a project
 
 2 or business.
 
 3      "Economic action" means concerted action initiated or
 
 4 conducted by a labor union and employees acting in concert
 
 5 therewith, to bring economic pressure to bear against an
 
 6 employer, as part of a campaign to organize employees or
 
 7 prospective employees of that employer, including such activities
 
 8 as striking, picketing, or boycotting.  A lawsuit to enforce this
 
 9 chapter is not "economic action".
 
10      "Employer" means any developer, manager/operator, or
 
11 subcontractor who employs individuals in a project or facility in
 
12 which the State has a proprietary interest.
 
13      "Labor organization" means any organization of any kind, of
 
14 any agency or employee representation committee or plan, in which
 
15 employees participate and which exists for the purpose, in whole
 
16 or in part, of dealing with employers concerning grievances,
 
17 labor disputes, wages, rates of pay, hours of employment, or
 
18 conditions of work.
 
19      "Manager/operator" means any person, corporation,
 
20 association, limited or general partnership, joint venture or
 
21 other entity including a developer that operates or manages a
 
22 project or business, or provides any material portion of the
 
23 services whether by subcontract or state contract.
 

 
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 1      "Proprietary interest" means any non-regulatory arrangement
 
 2 or circumstance in which the financial or other non-regulatory
 
 3 interest of the State could be adversely affected by labor-
 
 4 management conflict or consumer boycotts potentially resulting
 
 5 from a union organizing campaign, in the following circumstances:
 
 6      (1)  The State receives significant ongoing revenue (such as
 
 7           rent payments) under a lease of real property owned by
 
 8           the State for development purposes, excluding
 
 9           government fees or tax or assessment revenues, or the
 
10           like (except for tax revenues under the circumstances
 
11           specified in paragraph (2); or
 
12      (2)  The State receives ongoing revenue from a business or
 
13           project to pay debt service on bonds or loans provided
 
14           by the State to assist the development of a project
 
15           (including incremental tax revenues generated by the
 
16           project used directly or indirectly to pay to pay debt
 
17           service on bonds or to repay a loan by the State where
 
18           the proceeds are used for development of the project);
 
19      (3)  The State has agreed to underwrite or guarantee the
 
20           development or operation of the project or loans
 
21           related thereto.
 
22      In addition to the circumstances described in paragraphs (1)
 
23 to (3), the State shall be deemed to have a proprietary interest
 

 
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 1 in a project if the State determines or an interested party
 
 2 demonstrates prior to the effective date of the subcontract or
 
 3 state contract at issue that there is a significant risk that the
 
 4 State's financial interest or other non-regulatory interest in
 
 5 the project could be adversely affected by labor-management
 
 6 conflict or consumer boycotts potentially resulting from a union
 
 7 organizing campaign.
 
 8      "State contract" means a lease, management agreement,
 
 9 service agreement, loan, bond, or other similar agreement to
 
10 which the State is a party and in which the State has a
 
11 proprietary interest.
 
12      "Subcontract" means any lease, sublease, management
 
13 agreement or other similar agreement between a developer or a
 
14 manager/operator or a subcontractor that contemplates or permits
 
15 the subcontractor to operate or manage a project.
 
16      "Subcontractor" means any person, corporation, association,
 
17 limited partnership or general partnership, limited liability
 
18 company, joint venture, or other entity that enters into a
 
19 subcontract with a developer or manager/operator.
 
20      �   -3 Policy, requirements and procedures to minimize
 
21 labor-management conflict when State has proprietary interest.
 
22 (a)  The legislature declares as a matter of general policy that
 
23 when the State retains a proprietary interest in a real property
 

 
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 1 development or public facility project, it is essential for the
 
 2 protection of the State's investment and business interests to
 
 3 require that employers involved in these projects agree to abide
 
 4 by card check procedures for determining employee preference on
 
 5 the subject of labor union representation as is specified in this
 
 6 chapter.
 
 7      (b)  Except as provided in section    -4, the following
 
 8 requirements in subsections (c) to (e) are imposed.
 
 9      An employer of employees working in state projects, shall:
 
10      (1)  Enter into a card check agreement, as specified in this
 
11           chapter, with a labor organization which requests such
 
12           an agreement, for the purpose of seeking to represent
 
13           those employees before executing the subcontract or
 
14           state contract;
 
15      (2)  If the parties are unable to agree to the terms of a
 
16           card check agreement within sixty days of the
 
17           commencement of negotiations, they shall enter into
 
18           expedited binding arbitration in which the terms of a
 
19           card check agreement will be imposed by an arbitrator.
 
20           In these proceedings, which shall be conducted by an
 
21           experienced labor arbitrator selected as provided by
 
22           the rules of the Hawaii labor relations board, the
 
23           arbitrator shall consider any model card check
 

 
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 1           agreement provided by the State and prevailing
 
 2           practices and the terms of card check agreements in the
 
 3           same or similar industries, except that those card
 
 4           check agreements must include the mandatory terms
 
 5           paragraph (4).  The parties shall select the arbitrator
 
 6           within seven days from the expiration of the sixty day
 
 7           negotiation period, and the arbitrator shall complete
 
 8           any necessary hearings and render the arbitrator's
 
 9           decision within thirty days from selection.
 
10      (3)  Comply with the terms of that card check agreement and
 
11           this chapter; and
 
12      (4)  Include in any subcontract with a subcontractor a
 
13           provision requiring the subcontractor to comply with
 
14           this chapter.  This provision shall be a material and
 
15           mandatory term of the subcontract, binding all
 
16           successors and assigns, and stating in substance:
 
17                "The State of Hawaii has enacted a law, ___, which
 
18           may apply to [subcontractor].  Its terms are expressly
 
19           incorporated by reference hereto.  To the extent
 
20           [subcontractor] or its successors or assigns employs
 
21           employees within the scope of that statute,
 
22           [subcontractor] hereby agrees as a material condition
 
23           of this [contract] to enter into and abide by a card
 

 
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 1           check agreement with a labor organization or
 
 2           organizations seeking to represent [subcontractor's]
 
 3           employees, if and as required by that law, and to
 
 4           otherwise fully comply with the requirements of that
 
 5           law, [subcontractor] recognizes, as required by that
 
 6           law, that it must enter into a card check agreement
 
 7           with a labor organization(s) as specified by that law
 
 8           before executing this [subcontract], and that being
 
 9           party to such a card check agreement(s) is a condition
 
10           precedent of rights or obligations under this
 
11           [subcontract]."
 
12      Notwithstanding the requirements of paragraphs (1) to (4),
 
13 any employer in good faith complied with those requirements is
 
14 excused from further compliance as to a labor organization which
 
15 has taken economic action against that employer at that site in
 
16 furtherance of a campaign to organize that employer's employees
 
17 at that site for collective bargaining.  This clause shall not be
 
18 interpreted, however, to apply to economic action against an
 
19 employer at other locations where that employer does business, or
 
20 at any location for purposes other than organizing the employer's
 
21 employees; nor shall economic action by one labor organization
 
22 excuse an employer from the obligations of this chapter or a card
 
23 check agreement as to a different labor organization.
 

 
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 1      (d)  Any developer or manager/operator of a state project
 
 2 shall:
 
 3      (1)  To the extent it employs employees in a state project,
 
 4           abide by the requirements stated in subsection (c);
 
 5      (2)  Include the provision specified in subsection (c)(1) to
 
 6           (4) in any subcontract, modified as necessary to
 
 7           accommodate the circumstances of that particular
 
 8           subcontract;
 
 9      (3)  Refrain from executing a subcontract by which an
 
10           employer subject to subsection (c) is authorized or
 
11           permitted to operate a project or business until that
 
12           employer has entered into a card check agreement with a
 
13           labor organization, as required in subsection (c);
 
14      (4)  Notify local labor councils and federations, or both,
 
15           of any employers that it will operate a business in a
 
16           state project which may be subject to the requirements
 
17           of this subsection, as soon as the developer or
 
18           manager/operator identifies such businesses or
 
19           employers, but in no event later than twenty-one days
 
20           before requiring an employer to sign a subcontract;
 
21      (5)  Inform any prospective subcontractor, that if the
 
22           subcontractor is an employer subject to this
 
23           subsection, it shall enter into a card check agreement
 

 
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 1           pursuant to this chapter before it may execute the
 
 2           subcontract, and as a condition precedent to any rights
 
 3           or obligations under that document;
 
 4      (6)  Take reasonable steps to enforce the terms of any
 
 5           subcontractor requiring compliance with this chapter.
 
 6           To the extent a developer or manager/operator is found
 
 7           to have intentionally aided, abetted, or encouraged a
 
 8           subcontractor's failure to comply with such a provision
 
 9           or the terms of this chapter, either by action or
 
10           inaction, that developer or manager/operator shall be
 
11           jointly and severally liable for all damages awarded
 
12           pursuant to section    -5.
 
13      (e)  (1)  Any state contract executed under the authority of
 
14           any commission, department, authority, or officer of
 
15           the State, which contemplates the use or operation of a
 
16           business in a state real property development shall
 
17           include a provision requiring that any developer or
 
18           operator/manager of a project pursuant to that state
 
19           contract, and any employers operating in that state
 
20           project, agree to comply with the requirements imposed
 
21           in subsections (c) and (d), as essential consideration
 
22           for the State entering into the state contract.
 
23      (2)  To facilitate the requirements imposed by this section,
 

 
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 1           the Hawaii labor relations board may provide a model
 
 2           recommended card check agreement that includes the
 
 3           mandatory terms identified in subsection (c)(1) and
 
 4           which provides the maximum protection against labor-
 
 5           management conflict arising out of an organizing drive,
 
 6           and make such model recommended agreement available to
 
 7           parties required to enter into the agreement.  The
 
 8           State may also prepare guidelines establishing
 
 9           standards and procedures related to this chapter.
 
10           Notwithstanding this provision regarding the
 
11           preparation of a model card check agreement or related
 
12           guidelines, this chapter shall be self-executing, and
 
13           shall apply in all circumstances and to the extent
 
14           provided in this chapter, in the absence of or
 
15           regardless of the model card check agreement or
 
16           guidelines.
 
17      (3)  Any commission, department, authority, or officer of
 
18           the State that issues a request for proposals or
 
19           invitation to bid or similar document, regarding
 
20           development of state property that could result in a
 
21           proposal contemplating operation of a development and
 
22           project after the effective date of this chapter, shall
 
23           include in that document a summary description of and
 

 
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 1           reference to the policy and requirements of this
 
 2           chapter.  Failure to include a description or reference
 
 3           to this chapter in any request for proposal or similar
 
 4           document shall not exempt any developer,
 
 5           manager/operator, or employer otherwise subject to the
 
 6           requirement of this chapter.
 
 7      (f)  The policy and obligations established in subsections
 
 8 (a) to (e) shall apply to particular developers,
 
 9 manager/operators and employers whenever the State has a
 
10 interest, except as otherwise provided in this chapter.  The
 
11 determination whether or not the State has a proprietary interest
 
12 in a project, and if so, whether an exception applies under
 
13 section    -4(b), shall be made on a case by case basis by the
 
14 Hawaii labor relations board by applying the standards and
 
15 principles described in this chapter and any further standards
 
16 and principles provided in guidelines distributed pursuant to
 
17 this section.  Any party otherwise subject to the terms of this
 
18 chapter because the State has a proprietary interest in a state
 
19 project that claims an exemption from the terms of this chapter
 
20 under section    -4(b) shall have the burden of demonstrating
 
21 that the basis for such exemption is clearly present.
 
22      �   -4 Scope and exceptions.  (a)  The requirements of this
 
23 chapter apply only to the procedures for determining employee
 

 
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 1 preference regarding whether to be represented by a labor
 
 2 organization for purposes of collective bargaining and by which
 
 3 labor organization has been recognized as the bargaining
 
 4 representatives for employee of employers subject to this
 
 5 chapter.  Moreover, nothing in the chapter requires an employer
 
 6 or other entity subject to this chapter to recognize a particular
 
 7 labor organization, nor does any provision of this chapter
 
 8 require that a collective bargaining agreement be entered into
 
 9 with any labor organization, as that an employer submit to
 
10 arbitration regarding the terms of a collective bargaining
 
11 agreement.
 
12      (b)  The requirements of this chapter shall not apply to:
 
13      (1)  Employers employing fewer than the equivalent of fifty
 
14           full- or part-time employees; provided that when a
 
15           restaurant is located on the same premises as the hotel
 
16           and routinely provides food or beverages services to
 
17           the guests, employees of the restaurant and hotel shall
 
18           be aggregated for purpose of determining the
 
19           applicability of this chapter;
 
20      (2)  Employers commencing operations in a business in a
 
21           state project before the effective date of this Act, or
 
22           a business under any subcontract or state contract
 
23           entered into before the effective date of this Act, or
 

 
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 1           renewed without substantial amendment after the
 
 2           effective date of this Act;
 
 3      (3)  Any employer that is signatory to a valid and binding
 
 4           collective bargaining agreement covering the terms and
 
 5           conditions of employment for its employees at that
 
 6           business, or that has entered into a card check
 
 7           agreement with a labor organization regarding such
 
 8           employee which agreement provides at least equal
 
 9           protection from labor/management conflict as provided
 
10           by the minimum terms provided in section    -3(c);
 
11       (4) Any business where the Hawaii labor relations board
 
12           determines that the risk to the State's financial or
 
13           other non-regulatory interest submitting from
 
14           labor/management conflict is so minimal or speculative
 
15           as not to warrant concern for the State's investment or
 
16           other non-regulatory interest;
 
17      (5)  Any business where the developer, manager/operator or
 
18           employer, is an agency of the federal government; or
 
19      (6)  Any business where the requirements of this chapter
 
20           would violate or be inconsistent with the terms or
 
21           conditions of a grant, subversion, or agreement with a
 
22           federal agency related to such business, or any related
 
23           regulations.
 

 
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 1      �   -5 Enforcement.  (a)  The requirement that employers
 
 2 enter into and comply with card check agreements with labor
 
 3 organizations in the circumstances provided in this chapter, and
 
 4 the requirement that developer's and manager/operator's
 
 5 contractually obligate their successors, assigns, or
 
 6 subcontractors to be bound by that former requirement are
 
 7 essential consideration for the state agreement to any state
 
 8 contract containing that requirement.
 
 9      (b)  The State shall investigate complaints that this
 
10 chapter has been violated or that a card check provision included
 
11 in a state contract or subcontract pursuant to this chapter has
 
12 been breached and may take any action necessary to enforce
 
13 compliance, including but not limited to instituting a civil
 
14 action but an injunction and specific performance.
 
15      (c)  In the event the State brings a civil enforcement
 
16 action for violation of this chapter, any taxpayer or any person
 
17 or association with a direct interest in compliance with this
 
18 chapter may join in that enforcement action as a real party in
 
19 interest.  In the event the State declines to institute a civil
 
20 enforcement action for violation of this chapter, a taxpayer or
 
21 directly interested person or association may bring a civil
 
22 proceeding on its own behalf and on behalf of the State against
 
23 that employer and seek all remedies available for violation of
 

 
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 1 this chapter and breach of a card check agreement required by
 
 2 this chapter available under state law, including monetary,
 
 3 injunctive, and declaratory relief.  In view of the difficulty of
 
 4 determining actual damages incurred by such a violation,
 
 5 liquidated damages may be awarded at the rate of $1,000 per day
 
 6 of violation, to be distributed equally between a private
 
 7 plaintiff, if any, and the general fund of the State, unless that
 
 8 liquidated damages award is found to be so excessive in relation
 
 9 to the violator's resources as to constitute a penalty.
 
10      (d)  Any action challenging the applicability of this
 
11 chapter to a particular employer may be brought only after first
 
12 seeking an exemption pursuant to section    -4(b) and shall be
 
13 commenced within sixty days after notification that the exemption
 
14 has been denied by the State.
 
15      (e)  Notwithstanding anything else contained in this
 
16 chapter, in no event shall the remedy for a breach of the terms
 
17 of this chapter include termination of any such subcontract or
 
18 state contract, nor shall any such breach defeat or render
 
19 invalid or affect in any manner whatsoever the statute or
 
20 priority of the lien of any mortgage, deed, or trust or other
 
21 security interest made for value and encumbering any property
 
22 affected by that subcontract or state contract, including,
 
23 without limitation, any leasehold estate or other interest in the
 

 
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 1 property or improvements on such property.  This chapter shall
 
 2 become operative thirty days after its effective date, is
 
 3 intended to have prospective effect only, and shall not be
 
 4 interpreted to impair the obligations of any existing state
 
 5 contract or other agreement, lease, or contract to which the
 
 6 State is a party."
 
 7      SECTION 2.  This Act shall take effect upon its approval.
 
 8 
 
 9                           INTRODUCED BY:  _______________________