SB3098.DOC

SECTION 1. The legislature finds that the grievance arbitration process under a public collective bargaining agreement is meant to maintain labor stability and peace during the term of a contract between public employers and employees. Unfortunately, the present day legalistic nature and status of labor arbitration have become an antithetical counterpoint to the intended form, purpose, and operation of the arbitration process. As a respected and seasoned Hawaii arbitrator explains, "the biggest problem burdening the institution and practice of arbitration is its advancing formalism and legalism resulting from its dominance and control by the legal industry and profession. . . . Labor arbitration originated as a creature of the collective bargaining contract designed to be the terminal point of the contractual grievance procedure as a simple, informal, internal grievance resolution process within the union/management relationship." Today, the almost exclusive advocacy by attorneys during the grievance arbitration process unnecessarily formalizes the entire hearing process, complicating and lengthening its completion time with attendant increased costs and a more adversarial environment. For example, a recent Hawaii public collective bargaining grievance arbitration case resulted in a cost to the parties of over $100,000 in arbitrator fees alone. The legislature finds that labor arbitrations can be made better and more effective only when the process can be made less formal, less technical, and less adversarial.

Accordingly, the purpose of this Act is to restore the grievance arbitration process under a public collective bargaining agreement to a simplified system that provides a quick, just, and cost-effective resolution to conflicts between public employers and employees.

SECTION 2. Chapter 658A, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§658A- Authority of a public grievance arbitrator; restrictions. (a) A public grievance arbitrator shall not order any discovery beyond what was requested and provided pursuant to a collective bargaining agreement and prior to arbitration, except for issues regarding the timeliness of the arbitration notice.

(b) A public grievance arbitrator shall not award punitive damages, attorneys' fees and costs, or interest on any monetary award to either party.

§658A- Public grievance arbitrator's compensation. (a) A public grievance arbitrator's total compensation shall be divided equally among and paid by all parties.

(b) Total compensation for a grievance that involves contract interpretation, non-selection matters, procedures, and criteria regarding promotions, transfers, assignments or demotions, and other non-disciplinary matters, excluding matters regarding recruitment and examinations that are under the exclusive jurisdiction of the merit appeals board pursuant to section 76-14(a), shall not exceed $5,000.

(c) Total compensation for a grievance that involves suspensions and all other disciplinary actions not specified under subsection (d) shall not exceed $8,000.

(d) Total compensation for a grievance that involves terminations, resignations, and discharges shall not exceed $10,000."

SECTION 3. Section 658A-1, Hawaii Revised Statutes, is amended by adding two new definitions to be appropriately inserted and to read as follows:

""Public grievance arbitration" means an arbitration that is part of a grievance procedure under a public collective bargaining agreement, excluding an arbitration pursuant to section 89-11(e).

"Public grievance arbitrator" means an arbitrator selected through a grievance procedure under a public collective bargaining agreement, excluding an arbitrator selected for an arbitration panel pursuant to section 89-11(e)."

SECTION 4. Section 658A-3, Hawaii Revised Statutes, is amended to read as follows:

"§658A-3 When chapter applies. (a) Except as provided in subsection (c), this chapter governs an agreement to arbitrate made on or after July 1, 2002.

(b) This chapter governs an agreement to arbitrate made before July 1, 2002, if all the parties to the agreement or to the arbitration proceeding so agree in a record. If the parties to the agreement or to the arbitration do not so agree in a record, an agreement to arbitrate that is made before July 1, 2002, shall be governed by the law specified in the agreement to arbitrate or, if none is specified, by the state law in effect on the date when the arbitration began or on June 30, 2002, whichever first occurred.

(d) Notwithstanding any provisions to the contrary, only sections 658A-20, 658A-22, 658A-23(a)(1), (2), and (4), 658A‑23(b), 658A-24, 658A-25(a), and 658A-28 shall apply to a public grievance arbitration."

SECTION 5. Section 658A-22, Hawaii Revised Statutes, is amended to read as follows:

"[[]§658A-22[]] Confirmation of award. After a party to an arbitration proceeding receives notice of an award, and only when either party refuses to abide by the issued award, the party, upon showing of substantial proof, may make a motion to the court for an order confirming the award at which time the court shall issue a confirming order unless the award is modified or corrected pursuant to section 658A-20 or 658A-24 or is vacated pursuant to section 658A-23. An order confirming an award in a public grievance arbitration shall not be used against either party in a subsequent proceeding relating to any other public grievance arbitration."

SECTION 6. Section 658A-25, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Upon granting an order confirming, vacating without directing a rehearing, modifying, or correcting an award, the court shall enter a judgment in conformity therewith. The judgment may be recorded, docketed, and enforced as any other judgment in a civil action. The judgment confirming an award in a public grievance arbitration shall not be used against either party in a subsequent proceeding relating to any other public grievance arbitration."

SECTION 7. Section 658A-28, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) An appeal may be taken from:

(1) An order denying a motion to compel arbitration;

(2) An order granting a motion to stay arbitration;

(3) An order confirming or denying confirmation of an award;

(4) An order modifying or correcting an award;

(5) An order vacating an award without directing a rehearing; [or]

(6) A final judgment entered pursuant to this chapter[.]; or

(7) Any order that establishes the jurisdiction of a public grievance arbitrator to arbitrate a grievance; provided that the order shall be immediately reviewable by the circuit court de novo."

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	3098
TWENTY-SEVENTH LEGISLATURE, 2014
STATE OF HAWAII