STAND. COM. REP. NO. 398________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 944
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Labor and Public Employment, to which was
referred H.B. No. 944 entitled: 

     "A BILL FOR AN ACT RELATING TO EMPLOYMENT,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Require successor employers to retain incumbent
          employees upon the divestiture, sale, or acquisition of
          a business; and

     (2)  Provide successor employers with guidelines for the
          retention of employees upon the divestiture, sale, or
          acquisition of a business.

     Unity House, Inc., the ILWU Local 142, the Hawaii State AFL-
CIO, and members of the public supported this measure.  The
Department of Labor and Industrial Relations, the Legislative
Information Services of Hawaii, the Chamber of Commerce of
Hawaii, the Libertarian Party of Hawaii, and Jas. W. Glover,
Ltd., opposed this measure.

     Upon further consideration, your Committee has amended this
measure by:

     (1)  Adding the definition of "appellate board" as the Labor
          & Industrial Relations Appeal Board;

 
 
 
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     (2)  Increasing the number of employees from 20 to 50
          persons under the definition of "covered establishment"
          to be consistent with the Dislocated Workers Act;

     (3)  Requiring successor employers to retain incumbent
          employees for at least one year after the divestiture
          of a covered establishment;

     (4)  Requiring employers to answer a charge filed by the
          affected employee with the Department of Labor and
          Industrial Relations within 20 days of receipt; 

     (5)  Substituting the Director of Labor and Industrial
          Relations for the Appeal Board of Labor and Industrial
          Relations as the ultimate judge of chapter violation
          disputes, to be consistent with the Dislocated Workers
          Act; and

     (6)  Making technical changes for purposes of style,
          clarity, and consistency.

     Your Committee finds that in this economic age of mergers,
acquisitions, and consolidations, the concerns and welfare of
dislocated workers are not being adequately considered.
Dislocated workers often experience unwarranted trauma when the
sale, acquisition, or divestiture of a business occurs.  Although
there have been successor employers who transitioned smoothly and
retained incumbent employees, many successor employers cause
severe community disruption.  Examples include:

     (1)  One hundred twenty-six workers who were given no prior
          notice or future assurances before being terminated by
          the Airport Holiday Inn on New Year's Eve 1986; and

     (2)  The Westin Kauai after Hurricane Iniki when 900
          employees were left in limbo as the hotel went through
          a temporary shutdown, then changed ownership interests
          twice.

     Your Committee does not intend to constrict or hinder
business interests, but finds that it is in the State's interest
to provide:

     (1)  Stable employment to its residents;

     (2)  Uninterrupted and efficient service for its visitors;
          and

 
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     (3)  A healthy consumer base for its business.

     As affirmed by the record of votes of the members of your
Committee on Labor and Public Employment that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 944, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as H.B. No. 944, H.D.
1, and be referred to the Committee on Economic Development and
Business Concerns.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Labor and Public
                                   Employment,



                                   ______________________________
                                   TERRY NUI YOSHINAGA, Chair