Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committees on Labor and Transportation, Military Affairs and Government Operations, to which was referred S.B. No. 449 entitled:

beg leave to report as follows:

The purpose of this measure is to strengthen the State's Whistleblowers' Protection Act.

Testimony in support of the measure was received from the Hawaii State Commission on the Status of Women, the University of Hawaii at Manoa School of Nursing and Dental Hygiene, the Hawaii Nurses' Association, the National Employment Lawyers Association, Hawaii Chapter, Common Cause Hawaii, the League of Women Voters, ILWU Local 142, the Consumer Lawyers of Hawaii, and the Hawaii Government Employees Association. The Department of Labor and Industrial Relations opposed the portion of the measure that repealed Part III of Chapter 378, Hawaii Revised Statutes, which provides administrative remedies prior to sending a complaint to court. The Society of Human Resource Management, Hawaii Chapter, the Chamber of Commerce of Hawaii, and Shriners Hospitals opposed the passage of the measure.

Specifically, the measure strengthens the protection provided by Hawaii's Whistleblowers' Protection Act by providing protection to employees who report to government entities or their employers, violations of law or information demonstrating danger to the public health, safety, and welfare, and to employees who have been suspended, discharged, or discriminated against because they suffered a work injury, filed a petition in bankruptcy, or because their employer was summoned as a garnishee.

Your Committees find that, on occasion, employees find it necessary to report violations or suspected violations of a law of the State of Hawaii, political subdivisions of the State, or the United States, or situations which demonstrate danger to public health, safety, and welfare, which they observe during the course of their work. Often, however, employees do not report these alleged violations or situations due to concerns about potential retaliatory discharge, or threats to or discrimination against them for such reporting. Thus, out of fear, violations or situations demonstrating danger to public health, safety, and welfare go unreported and uncorrected. This problem adversely affects both the well-being and productivity of these concerned employees, as well as the functions of the affected agencies or organizations.

Your Committees also find that the Whistleblowers' Protection Act attempts to provide some protection to employees who speak out on the unlawful acts of their employer. The Act provides for the ability to bring civil action for appropriate injunctive relief, actual damages, or both within ninety days after the alleged violation of the Act. The Act also provides for potential reinstatement of the employee, payment of back wages, full reinstatement of fringe benefits, actual damages, or any combination of these remedies. Recovery of all or a portion of the costs of litigation, including reasonable attorney's fees and witness fees, is also possible.

Your Committees admit that although Hawaii's existing Whistleblowers' Protection Act does provide some protection from and potential compensation for employer retaliation, penalties for violations of the law are relatively minor (a fine of not more than $500 for each violation) and do not provide protection to employees who report to their employer's violations or situations demonstrating danger to public health, safety, and welfare. Moreover, Hawaii's whistleblowers' protection law only provides for a ninety-day period to bring civil action. Often, more time is needed for the whistleblower to file a complaint against the employer.

In addition to the fears associated with whistleblowing, employees sometime fear employer reprisal in the form of being suspended, discharged, or discriminated against for filing a worker's compensation claim, filing a petition in bankruptcy, or because the employer was summoned as a garnishee and forced to make payroll deductions to the employee's creditor. Your Committees find that here too, the present remedies found in existing law are inadequate because of the short thirty-day period in which to file a complaint and the lack of full redress if a violation is established. Moreover, employees in this situation have difficulty finding legal representation because there is no provision awarding fees if the employee's claim is established.

Your Committees note the similarities between acts that constitute violations under the Whistleblowers' Protection Act and Part III of Chapter 378, Hawaii Revised Statutes, relating to unlawful suspension, discharge, or discrimination against employees, and the remedies therefor. Your Committees agree with the intent of the measure to combine the two laws and make the procedures and penalties consistent.

Your Committees have amended the measure by increasing the proposed penalty for violation of the Whistleblowers' Protection Act from $5,000 to $10,000, and making numerous technical, nonsubstantive amendments for the purposes of style and clarity.

Your Committees believe that the amended measure provides a strong and consistent process by which aggrieved employees may find redress.

As affirmed by the records of votes of the members of your Committees on Labor and Transportation, Military Affairs and Government Operations that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 449, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 449, S.D. 1, and be referred to the Committee on Judiciary.