Konno v. County of Hawai'i
85 Haw. 61, 937 P.2d 397 (1997)
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Rule of Law:
Privatization of public services violates state civil service laws and merit principles when the services have been customarily and historically provided by civil servants, and no specific statutory exemption applies. Consequently, a public employer is not required to collectively bargain over a decision to privatize that is itself illegal under civil service law.
Facts:
- The County of Hawai'i historically owned and operated two landfills, staffed by 38 civil service employees who were members of the United Public Workers union (UPW).
- In 1991, Mayor Lorraine Inouye considered privatizing a new landfill at Pu'uanahulu, but after objections from the UPW, she agreed in 1992 not to privatize the landfill's operation.
- After defeating Inouye in the 1992 election, new Mayor Stephen Yamashiro announced the County would privatize both the construction and operation of the new landfill.
- The County did not seek certification from the personnel director or civil service commission that the landfill worker positions were special, unique, or could not be filled through normal civil service procedures.
- In March 1993, the County selected Waste Management of Hawai'i, Inc. (WMI) for the contract, and Mayor Yamashiro executed the contract on April 30, 1993.
- The work to be performed by WMI employees at the new landfill was virtually identical to the work previously performed by the County's civil service employees at the old landfill.
Procedural Posture:
- In case No. 18203, the United Public Workers (UPW) sued the County of Hawai'i in the Third Circuit Court, alleging the privatization contract violated civil service laws.
- The circuit court granted summary judgment in favor of the County, ruling the contract was legally executed.
- The UPW, as appellant, appealed the circuit court's grant of summary judgment to the Supreme Court of Hawai'i.
- In a separate action (No. 18236), the UPW filed a prohibited practice complaint with the Hawaii Labor Relations Board (HLRB), alleging the County violated collective bargaining laws.
- The HLRB ruled that the County committed a prohibited practice by refusing to bargain over the effects of privatization, though not the decision itself.
- Both the County and the UPW appealed the HLRB's decision to the Third Circuit Court.
- The circuit court affirmed parts of the HLRB's decision but reversed the finding of a prohibited practice, concluding the County had not refused to bargain over effects.
- The UPW, as appellant, appealed the circuit court's decision in this second action to the Supreme Court of Hawai'i.
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Issue:
Does a county violate state civil service laws and merit principles by contracting with a private company to operate a public landfill, when such work has been customarily and historically performed by civil service employees?
Opinions:
Majority - Ramil, Justice
Yes. A county violates civil service laws and merit principles when it privatizes services that have been customarily and historically provided by civil servants. The court adopted the 'nature of the services' test to determine the scope of the civil service under state statute. This test protects services traditionally performed by public employees from being contracted out, absent specific legislative authorization. Here, landfill operation was a service historically performed by the County's civil service employees. The County failed to secure a required certification that the service was unique or point to a statute that specifically exempted these positions from civil service coverage. The general statutory authority for the County to contract for solid waste disposal did not constitute a specific exemption. Because the privatization contract itself was illegal and void as against public policy, the County had no obligation to collectively bargain with the union over an illegal act.
Analysis:
This decision significantly restricts the power of local governments in Hawai'i to privatize public services, establishing the 'nature of the services' test as the controlling standard. It clarifies that executive decisions to privatize for reasons of efficiency or cost-savings cannot override the protections of the civil service system. The ruling firmly places the authority to permit privatization of historically public functions with the legislature, which must create clear and specific statutory exemptions. This case serves as a strong precedent favoring the preservation of the civil service system against encroachment by privatization unless explicitly sanctioned by law.
