STATE REACHES AGREEMENT WITH UNITED PUBLIC WORKERS UNION TO PROCEED WITH MAUI HOSPITALS TRANSITION

HONOLULU – Gov. David Ige and Dayton Nakanelua, state director of the United Public Workers (UPW), announced they have signed a settlement agreement that will resolve UPW’s lawsuit and class grievance against the state. The union had sought to ensure that the collective bargaining agreement with the state was honored during the transition from state control to Maui Health System, a Kaiser Foundation Hospitals LLC (Kaiser). The transition can now move forward.

“I am pleased that we were able to work with UPW to ensure that state workers at the Maui healthcare facilities are treated fairly during the transition process. These employees are providing top-notch care for the community, and this agreement acknowledges their dedication to their patients. The settlement provides certainty to the people of Maui County that they will continue to have access to high quality health care,” said Gov. Ige.

“With this agreement, the governor has recognized and addressed the concerns of our members. He is honoring the process and the existing collective bargaining agreement,” said Mr. Nakanelua.

The state and UPW will jointly ask the 9th Circuit Court of Appeals to lift its injunction and dismiss UPW’s lawsuit. Some key points of the agreement include:

• The Maui Region hospitals will be transferred from Hawai‘i Health System Corporation management to Kaiser not earlier than November 6, 2016.
• The Maui Region hospitals will be operated and managed exclusively by Kaiser.
• UPW bargaining unit employees will work under Kaiser’s supervision and direction and still be covered by UPW collective bargaining agreements until those agreements expire on June 30, 2017.
• Kaiser will offer to hire UPW employees for a period of six months starting July 1, 2017.

This agreement clears the way for the transition to Kaiser to proceed and residents of Maui County can feel secure that they will continue to have access to healthcare. While the transfer of the hospital management has been secured, some related issues remain. In particular, the Hawai‘i Government Employees’ Association (HGEA) did not join the UPW lawsuit. Instead, the union requested severance and retirement benefits for its employees through SB 2077, which was passed during the 2016 regular session. Gov. Ige vetoed the measure based upon legal and fiscal concerns and offered a compromise measure, but the legislature subsequently overrode his veto. This resulted in Act 1, Special Session 2016.

On Aug. 9, 2016, the Employees’ Retirement System (ERS) filed a lawsuit against the state and Hawai‘i Health Systems Corporation asserting that Act 1 will jeopardize the ERS’ federal tax-exempt status. This lawsuit will not affect the settlement agreement signed today. HGEA employees are not included in its provisions. HGEA’s severance and retirement benefits will depend on the outcome of the litigation, and/or the union could work with the state to reach an agreement in accordance with the collective bargaining law.

“I pledged to work out an agreement with UPW because we need to honor our commitments to the Maui Region hospital employees. I am hopeful that we can reach a similar agreement for employees in those facilities who are represented by HGEA,” said Ige.

Link to settlement agreement: https://governor.hawaii.gov/wp-content/uploads/2016/08/Signed-Settelment-Agreement_UPW-vs-State_12-Aug-2016.pdf

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