Bid to Stop HI Hospital Privatization Denied

by Nicholas Fillmore, Court House News, February 19, 2016 

HONOLULU (CN) - A federal judge rejected United Public Workers' emergency request to stay a law that privatizes three Hawaii hospitals and strips some 500 workers of civil-service protections.

House Bill 1075, signed into law by Gov. David Ige in August 2015, transfers day-to-day operations of Maui Memorial Medical Center and Kula Hospital and Clinic on Maui, and Lanai Community Hospital to health care giant Kaiser.

"Following such a transfer, the state will use public funds to pay for costs of operating these facilities, but the employees working in these facilities will no longer be public employees of the state of Hawaii who have civil service protections and public employee collective bargaining rights and the protections of existing collective bargaining agreements," the unions' complaint said.

The United Public Workers, American Federation of State, County & Municipal Employees, Local 646, AFL-CIO sued Governor David Ige in August 2015 claiming that when he signed HB 1075 as Act 103 months earlier he violated the contract clause of the U.S. Constitution.

At issue in the Feb. 11 hearing was what if anything had changed in the week since the union's request for a preliminary injunction was denied.

Speaking by conference call, plaintiff attorney Scott Kronland said that layoff notices have already gone out in Maui and the process of bumping members from other units with less service time has begun.

U.S. District Judge Helen Gillmor wondered if the "cascading effect" might have been the same if the contract between UPW and the hospitals was allowed to expire in 2017.

"Many more workers would achieve their two-year service time," Kronland said.

"This seems like the normal process. What is it that distinguishes this situation?" Gillmor asked.

"The permanent loss of 500 jobs," Kronland said. "People will have to leave Maui to remain in the civil service. Offers from Kaiser have not been forthcoming, so workers have to make decisions without certainty."

Gillmor asked if a union operated at Kaiser.

"It will not start out with one. Kaiser will set the terms," Kronland said.

Arguing for the state, Hawaii Attorney General Douglas Chin said the state was in compliance with "reduction to force provisions" and that there was nothing new in the union's recent application for an injunction.

Gillmor concluded by denying the injunction because "there is not an impairment of contracts," she said.

She said she planned to file a final judgment soon so that the case can move on to the Ninth Circuit, where the UPW can file for emergency relief.

"It is unfortunate for the people of Maui," she added.

LINK: Full Text of Court Ruling 

SA: State’s plan to shift hospitals to Kaiser is upheld by judge