STAND. COM. REP. NO.  183

Honolulu, Hawaii

                , 2013

RE:   H.B. No. 634

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Sir:

     Your Committee on Labor & Public Employment, to which was referred H.B. No. 634 entitled:

"A BILL FOR AN ACT RELATING TO EMPLOYMENT,"

begs leave to report as follows:

The purpose of this measure is to require the retention of employees during a divestiture of a covered establishment by the successor employer.

More specifically, this measure provides that in the event of a divestiture of a covered establishment that employed not less than one hundred persons in the preceding twelve months, the successor employer:

     (1)  Shall hire all incumbent non-supervisory and non-confidential employees;

     (2)  Shall not require incumbent employees to file employment applications with the successor employer, unless the existing files are incomplete;

     (3)  May conduct criminal conviction record checks, drug screening, and other pre-hire screening checks for incumbent employees not prohibited by law; and

     (4)  May not have to retain all of the incumbent employees if the business of the successor employer is substantially dissimilar to the former employer's business or if the need for employees is less.

     Testimony in support of this measure was submitted by the Hawaii State American Federation of Labor and Congress of Industrial Organizations and the International Longshore and Warehouse Union Local 142.  Testimony in opposition to this measure was submitted by the Maui Chamber of Commerce, The Chamber of Commerce of Hawaii, National Federation of Independent Business Hawaii, Retail Merchants of Hawaii, VIP Foodservice, and one individual.  The Department of Labor and Industrial Relations submitted comments.

     Your Committee finds that this measure would provide job security for employees who would be displaced during a divestiture of a covered establishment by requiring the successor employer to retain all incumbent non-supervisory and non-confidential employees, subject to certain exceptions.  This measure would minimize the disruption that often occurs upon divestiture.  Workers would not be dislocated or face financial uncertainty, customers would see business continuing with little disturbance, and the economy would not be impacted by increased unemployment.

     As affirmed by the record of votes of the members of your Committee on Labor & Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 634 and recommends that it pass Second Reading and be referred to the Committee on Finance.

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

____________________________

MARK M. NAKASHIMA, Chair