REPORT TITLE:
Worker Retention & Dislocation


DESCRIPTION:
Requires that workers be retained in the event of a divestiture
of a business.  Changes notice prior to closure requirement to 90
days and definition of "covered establishments" to include those
employing 20 or more employees with respect to dislocated
workers.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           1440
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO LABOR.



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

 1      SECTION 1.  The economic conditions of the State depends
 
 2 greatly on the influences of other regions' economic strengths.
 
 3 As a result of fluctuations in the world, national, and state
 
 4 economies, business establishments in the State are regularly
 
 5 subject to closing or divestitures.  Employees in the employ of
 
 6 these establishments are often subject to unexpected unemployment
 
 7 as a result of these closings or divestitures.
 
 8      The State is often called upon to expend funds for these
 
 9 displaced workers in the form of unemployment compensation,
 
10 welfare, and other forms of compensation, thereby increasing the
 
11 tax burden on businesses and individuals.  Unemployment has risen
 
12 in the State over the last three years to a rate above the
 
13 national average.  Consumer purchasing strength is directly
 
14 related to unemployment which has a bearing on the economy of the
 
15 State.  Therefore, it is in the best interest of the State to
 
16 protect employees from the effects of unexpected layoffs or
 
17 terminations resulting from closing, relocation, or divestiture
 
18 of business establishments.
 
19      Incumbent employees posses invaluable knowledge and
 

 
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 1 experience with work schedules, practices, policies, and clients.
 
 2 The replacement of incumbent employees decreases efficiency.
 
 3 Retaining existing employees when a divestiture, sale, or
 
 4 acquisition occurs reduces the likelihood of labor disputes and
 
 5 economic disruptions.  Reducing labor disputes and economic
 
 6 disruptions results in the assured continuity of services to
 
 7 residents and visitors who receive services from those
 
 8 establishments.
 
 9      It is unacceptable that employees should become unemployed
 
10 due to the divestiture of their employer which does not result in
 
11 an establishment closure.  The State, as a principal provider of
 
12 social services, has an interest in the stability of employment.
 
13 The State further has an interest in providing stable employment
 
14 for its residents, stable services for its visitors, and a
 
15 healthy consumer base for its businesses.  The retention of
 
16 incumbent workers benefits these interests.
 
17      The purpose of this Act is to require that incumbent
 
18 employees be retained by successor employers in the event of a
 
19 divestiture of a business, to extend the protections of
 
20 dislocated workers to those employed in establishments of twenty
 
21 or more employees, and to require notification of an
 
22 establishment's closing ninety days prior to that closing.
 
23      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 

 
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 1 a new chapter to be appropriately designated and to read as
 
 2 follows:
 
 3                             "CHAPTER
 
 4                         WORKER RETENTION
 
 5      §  -1  Definitions.  As used in this chapter:
 
 6      "Covered establishment" means any industrial, commercial, or
 
 7 other business entity which employs at any time in the preceding
 
 8 twelve-month period, twenty or more persons.
 
 9      "Department" means the department of labor and industrial
 
10 relations.
 
11      "Director" means the director of labor and industrial
 
12 relations.
 
13      "Divestiture" means the transfer of any covered
 
14 establishment from one employer to another due to the sale,
 
15 transfer, merger, and other business takeover or transaction of
 
16 business interests.
 
17      "Employee" means any individual engaged in service to an
 
18 employer.
 
19      "Employer" means any individual or entity which, directly or
 
20 indirectly, owns, operates, or has a controlling interest in a
 
21 covered establishment.
 
22      "Length of service" means the number of years, months, and
 
23 days spent by an employee in the service to an employer.
 

 
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 1      §  -2  Notification.  An employer in a covered
 
 2 establishment shall provide to each employee and the director
 
 3 written notification of a divestiture at least ninety days prior
 
 4 to its occurrence.
 
 5      §  -3  Worker retention.  (a)  In the event of a
 
 6 divestiture of a covered establishment, the successor employer
 
 7 shall retain incumbent employees of the affected establishment.
 
 8      (b)  If the successor employer determines that fewer
 
 9 employees are required to provide the required services, the
 
10 successor employer shall retain employees by their length of
 
11 service, within their job classifications, with employees with
 
12 the longest length of service given preference over employees
 
13 with shorter lengths of service.
 
14      (c)  Any employee not retained in accordance with subsection
 
15 (a) shall be placed on a preferential rehiring list in order of
 
16 length of service, which shall be provided to each affected
 
17 employee and the director.  If the successor employer determines
 
18 a need to increase its workforce, it shall hire from the
 
19 preferential rehiring list, giving preference to employees with
 
20 the longest length of service within their classification over
 
21 employees with shorter lengths of service.  The successor
 
22 employer shall exhaust all possibilities of hiring from the
 
23 preferential rehiring list prior to hiring new employees.
 

 
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 1      (d)  Except as provided in subsection (c), the successor
 
 2 employer shall not discharge without cause an employee retained
 
 3 pursuant to this chapter.  For the purpose of this paragraph,
 
 4 "cause" shall include misconduct connected with the individual's
 
 5 work.
 
 6      §  -4  Wages, benefits, and other compensation.  A
 
 7 successor employer shall compensate each employee retained in
 
 8 accordance with section    -3 in accordance with the greater of:
 
 9      (1)  The average regular wages, benefits, and other
 
10           compensation received by the employee during the
 
11           twelve-month period prior to divestiture; or
 
12      (2)  The wages, benefits, and other compensation in effect
 
13           at the time of divestiture.
 
14      §  -5  Collective bargaining.  Notwithstanding the
 
15 provisions of this chapter, any contractual agreement arrived at
 
16 through collective bargaining that provides benefits in excess of
 
17 those contained herein shall supersede the requirements of this
 
18 chapter with respect to employees covered under the collective
 
19 bargaining agreement.  If, however, a collective bargaining
 
20 agreement is silent or provides benefits less than those provided
 
21 by this chapter, then the provisions of this chapter shall
 
22 supersede that collective bargaining agreement. 
 
23      §  -6  Civil penalties.  Any employer who fails to conform
 

 
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 1 to this chapter shall be liable to each of the employees affected
 
 2 in an amount equal to the value of their wages, benefits, and
 
 3 other compensation for the duration of the employer's violation
 
 4 of this chapter.
 
 5      §  -7  Employee remedies.  (a)  An action by an employee to
 
 6 enforce this chapter may be maintained in any court of competent
 
 7 jurisdiction by any one or more employees for and on behalf of
 
 8 oneself or themselves, or the employee or employees may designate
 
 9 an agent or representative to maintain the action.
 
10      (b)  In addition to any judgment awarded to the plaintiff or
 
11 plaintiffs, the court in any action brought under this section
 
12 shall allow costs of action, including costs of fees of any
 
13 nature, reasonable attorney's fees, and punitive damages as
 
14 deemed appropriate, to be paid by the defendant.
 
15      (c)  The court may also provide injunctive relief in
 
16 appropriate circumstances.
 
17      §  -8  Coexistence with other available relief.  This
 
18 chapter shall not be construed to limit an employee's right to
 
19 bring legal action for wrongful termination."
 
20      SECTION 3.  Section 394B-2, Hawaii Revised Statutes, is
 
21 amended by amending the definition of "covered establishment" to
 
22 read as follows:
 
23      ""Covered establishment" means any industrial, commercial,
 

 
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 1 or other business entity which employs at any time in the
 
 2 preceding twelve-month period, [fifty] twenty or more persons."
 
 3      SECTION 4.  Section 394B-9, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "[[]§394B-9[]]  Notification.  An employer in a covered
 
 6 establishment shall provide to each employee and the director
 
 7 written notification of a closing, partial closing, or relocation
 
 8 at least [forty-five] ninety days prior to its occurrence."
 
 9      SECTION 5.  Statutory material to be repealed is bracketed.
 
10 New statutory material is underscored.
 
11      SECTION 6.  This Act shall take effect upon its approval.
 
12 
 
13                           INTRODUCED BY:  _______________________