Requires successor employers to retain incumbent employees upon
the divestiture, sale, or acquisition of a business.  (HB944 HD1)

HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The Hawaii Revised Statutes is amended by adding
 2 a new chapter to be appropriately designated and to read as
 3 follows:
 4                             "CHAPTER
 5                         WORKER RETENTION
 6         -1 Findings and purpose.  The legislature finds that
 7 growing global interdependence has made the economy of the State
 8 greatly subject to external fluctuations in world and national
 9 economies.  As a result, financial distress in other geographical
10 regions has often subjected establishments in the State to change
11 and transfer ownership and divestiture.
12      These changes, transfers of ownership, and divestitures have
13 resulted in abrupt and unexpected unemployment for the employees
14 of such establishments.  Rising unemployment, in turn, has
15 diminished consumer purchasing strength, contributed to the
16 health and family problems associated with poverty, and increased
17 the tax burden on both businesses and individuals due to
18 expenditures for unemployment insurance compensation, welfare,
19 and other forms of social security compensation.  Transfers of

Page 2                                                     944  
                                     H.B. NO.           H.D. 1

 1 ownership and divestiture have also often led to periods of labor
 2 unrest, and disruption of the services provided to residents and
 3 visitors served by such establishments.
 4      The public interest of the State is best served by seeking
 5 to ameliorate the financial and social problems caused by these
 6 economic dislocations and resultant unemployment.  Accordingly,
 7 the legislature finds that retaining existing employees when a
 8 divestiture, sale, or acquisition occurs will not only minimize
 9 the economic and social disruption caused by these transactions
10 but also assure the harmonious continuity of needed services.
11 Incumbent employees possess invaluable knowledge and experience
12 of work practices, policies, and clientele and constitute a
13 resource worthy of preservation.  Therefore, the retention of
14 incumbent workers furthers the State's interest in providing
15 stable employment to its residents, uninterrupted and efficient
16 service for its visitors, and a healthy consumer base for its
17 businesses.
18         -2 Definitions.  As used in this chapter:
19      "Appellate board" means the labor and industrial relations
20 appeal board.
21      "Covered establishment" means any industrial, commercial, or
22 other business entity which employs at any time in the preceding
23 twelve-month period, fifty or more persons.

Page 3                                                     944  
                                     H.B. NO.           H.D. 1

 1      "Department" means the department of labor and industrial
 2 relations.
 3      "Director" means the director of labor and industrial
 4 relations.
 5      "Divestiture" means the transfer of any covered
 6 establishment from one employer to another due to the sale,
 7 transfer, merger, and other business takeover or transaction of
 8 business interests.
 9      "Employer" means any individual or entity which, directly or
10 indirectly, owns, operates, or has a controlling interest in a
11 covered establishment.
12      "Length of service" means the number of years, months, and
13 days spent by an employee in service to an employer.
14         -3 Notification.  An employer in a covered
15 establishment shall provide to each employee and the director
16 written notification of a divestiture at least forty-five days
17 prior to its occurrence.  If the divestiture shall result in the
18 loss or suspension of employment, the notification shall also
19 furnish an explanation of the reasons for such action.
20         -4 Worker retention.  In the event of a divestiture of
21 a covered establishment, the successor employer shall retain
22 incumbent employees of the affected establishment for a period of
23 at least one year.  The successor employer shall not discharge
24 without cause an employee retained pursuant to this chapter.

Page 4                                                     944  
                                     H.B. NO.           H.D. 1

 1 "Cause" for this purpose shall be limited to misconduct connected
 2 with the individual's work.
 3         -5 Wages, benefits, and other compensation.  A
 4 successor employer shall compensate each employee retained in
 5 accordance with section    -4 by payment of:
 6      (1)  The average regular wages, benefits, and other
 7           compensation received by the employee during the
 8           twelve-month period prior to divestiture; or
 9      (2)  The wages, benefits, and other compensation in effect
10           at the time of divestiture.
11         -6 Collective bargaining.  Notwithstanding this
12 chapter, any contractual agreement arrived at through collective
13 bargaining that provides benefits in excess of those contained in
14 this chapter shall supersede the benefits required under this
15 chapter.  In the event, however, that a collective bargaining
16 agreement is silent or provides benefits less than those provided
17 by this chapter, this chapter shall supersede the collective
18 bargaining agreement.
19         -7 Civil penalties.  Any employer who fails to conform
20 to this chapter shall be liable to each of the employees affected
21 in an amount equal to the value of their wages, benefits, and
22 other compensation, including interest, for the duration of the
23 employer's violation of this chapter.

Page 5                                                     944  
                                     H.B. NO.           H.D. 1

 1         -8 Employee remedies.(a)  An action by an employee to
 2 enforce this chapter may be maintained in any court of competent
 3 jurisdiction by any one or more employees, or the employee or
 4 employees may designate an agent or representative to maintain
 5 the action.
 6      (b)  The court in any action brought under this section, in
 7 addition to any judgment awarded to the plaintiff or plaintiffs,
 8 shall allow costs of action, including costs of fees of any
 9 nature, and reasonable attorney's fees, interest, and
10 consequential damages, if any, as deemed appropriate, to be paid
11 by the defendant.
12      (c)  The court may also provide injunctive relief in
13 appropriate circumstances.
14      (d)  In the alternative, an employee who alleges the rights
15 afforded by this chapter have been violated, may, at the
16 employee's election, file a charge with the department which
17 shall state the name and address of the employer alleged to have
18 committed the violation, a summary of the facts upon which the
19 charge is based, and any other information the department may
20 require.  The department shall serve the charge upon the employer
21 by delivery or mail.  The employer shall answer the charge within
22 twenty days following its service.

Page 6                                                     944  
                                     H.B. NO.           H.D. 1

 1      (e)  Where the department finds that there is reasonable
 2 cause that this chapter has been violated and cannot obtain
 3 voluntary compliance from the employer, the director shall
 4 appoint a hearings officer and schedule a contested case hearing
 5 in accordance with chapter 91.  Following the completion of the
 6 contested case hearing, the hearings officer shall issue a
 7 proposed decision containing a statement of reasons including a
 8 determination of the issues of fact or law necessary to the
 9 proposed decision which shall be served upon the parties.  The
10 hearings officer may order any relief specified in subsection
11 (b).
12      (f)  Any party adversely affected by the proposed decision
13 may file exceptions and present arguments to the appellate board.
14 If the appellate board sustains a finding that a violation of
15 this chapter has occurred, the appellate board shall issue a
16 decision and order in accordance with chapter 91 requiring the
17 respondent to cease and desist from the violation and ordering
18 such other authorized relief as is just and proper.  If the
19 appellate board finds no violation, the charge shall be
20 dismissed.
21         -9 Judicial review.  Any person aggrieved by the order
22 of the director shall be entitled to judicial review as provided
23 by section 91-14.

Page 7                                                     944  
                                     H.B. NO.           H.D. 1

 1         -10  Coexistence with other available relief.  This
 2 chapter shall not be construed to limit an employee's right to
 3 bring legal action for wrongful termination, or to participate in
 4 the dislocated workers program under chapter 394B in the case of
 5 a permanent shut down of operations within a covered
 6 establishment.
 7         -11  Rules.  The director shall adopt rules under
 8 chapter 91 as the director deems necessary for the purpose of
 9 carrying out this chapter."
10      SECTION 2.  This Act shall take effect upon its approval.