Case Title: Hawaii Teamsters and Allied Workers, Local 996 v. Department of Labor and Industrial Relations.

Citation: 110 Haw. 259

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 2006-04-18T00:00:00Z

Document:
‘+#4FOR PUBLICATION*#*

IN THE SUPREME COURT OF THE STATE OF HAWAI'T

‘o00---

 

 

HAWAII TEAMSTERS AND ALLIED WORKERS, LOCAL 996
on behalf of the Affected OTS Employees Shown
on Exhibit “B” Attached Hereto, Claimant-Appellant

DEPARTMENT OF LABOR AND INDUSTRIAL RELATIONS,
STATE OF HAWAI'I, Appellee-Appellee
and

ORMU TRANSIT SERVICES, INC., Employer-Appellee

 

No. 27301

APPEAL FROM THE FIRST CIRCUIT COURT
(CIV. NO. 04-1-0833)

THY 81 yay 9002

 

APRIL 18, 2006

9S

 

MOON, C.J., LEVINSON, NAKAYAMA, ACOBA, AND DUFFY, JJ.

QPINION OF THE COURT BY ACOBA, Ja

In this secondary appeal, Claimant-Appellant Hawaii

‘Teamsters and Allied Workers, Local 996 (Local 996) appeals from
2008 final judgment of the circuit court of the
in favor of Appellee-Appellee State of

(DLIR) and

the April 21,

first circuit! (the court)

Hawai'l, Director of Labor and Industrial Relations

+ the Honorable Eden

 

Elizabeth Hifo pro!

qq
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Employer-Appellee Oahu Transit Services, Inc. (OTS) and against
Local 996, Local 996 also challenged the court's April 21, 2005
order affirming Decision 0303317 of the Employment Security
Appeals Referees’ Office dated April 8, 2004, disqualifying Local
996 from receiving unemployment compensation benefits. We affirm
the April 21, 2005 final judgment.
1.

on May 1, 1991, ordinance 91-27 was adopted, amending
Chapter 28 of the Revised Ordinances of Honolulu (ROH) by adding
three new articles, including article 1c. It authorized the
Department of Transportation Services of the City and County of
Honolulu (DTS), also known as “the public transit authority,” to
contract with @ private non-profit corporation to “manage,
operate, and maintain the city bus system [(the bus)] on behalf
of the city.” ROH § 28-1C.1(a) provided:

Subject to council appropriations, the public transit

hedulas. ai ice of the Cit

ay by the authority anal formance with
Shogt-rande Erandi: olan and any undats, Neither the

Souneil nor mayor shalt have the power to directly nodity,
of otherwise revise the routes, schedules,

   

(Emphasis added.) ROH § 28-1C.2 provided in pertinent part:

@ Under the contract (for Managenent,
Operation, ahd Maintenance of City Bus System], the private,

 

{i Shell be en independent contractor with the
citys
(2) Shall be the explover of record of personne!

Snplovees under chanter #2, Sawai Revised Sraturess
ia o

‘Shal)_sanace, operate, and aaintaln the city
bugcveten in the most efficient ang effective manner
and in accordance with sound management practices; and
+*+FOR PUBLICATION*#*

 

(Emphases

Responsib:

agreement

agreenent

(3) Shell have no purpose, except the
management, operation, and maintenance of the City bus
fysten ao an anetrumentality of the City.

added.) ROH § 28-1C.4 refers to the Obligations and

 

ilities of DTS and states in relevant part:

a) Under the bus managenent service contract, the bus
managenent services contractor st a minimum shall nave the
following general obligations and responsibilities:

 

15)" Gperate che city bus system in accordance
with routes, schedules, and levels of service
established by the publie transit authority pursuant

to section 28-16.1{.)
On February 25, 1997, the DTS entered into a management

with the O?S* pursuant to Ordinance 91-27. The

states in pertinent part:

WHEREAS, pursuant to Ordinance No 91-27, the HPTA and
one enteres into an Agreement on January 1, 2992 under which

{also known as ‘The Gus") on Denalf of the citys and
WHEREAS, Ordinance 96-30 requires OTS co assune the

‘operation and’nansgenent of both TheBus ang the City special
tranaie service on April 1, 1987. =

 

 

HioW THEREFORE, for an in consideration of the mutus
promises and covenants containes herein, it Le agreed that

 

Tal For and in consideration of the conpensetion
hereinafter specified, O1S auress to furnish menagenent

davctowday operation of the City bus susten
Sneluding those duties and responsibilities set Forth in
Orainance 96°30.

Te?
bus vei pal ine!
following: , andl other services crdinanily

T-3. Te is expressly agreed by the parties heveto that
either OTs nor any of its employees are enployees of the
City Tor any purposes whatscever, but are independent
contractors. “Nothing contained herein shall be construed to
Greate a partnership or joint venture between the parties,

 

 

 

3.1 ate
ang mainte:

 

‘The Articles of Incorporation of Oahu Transit System in Section
that “[tIhe purpose of the corporation shall be to manage, operate
‘the City and county of Honolble bus cysten, special traneit

 

Service and other transit related services on behalf of and for the city and
County of Honolulu.”
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Hiciat rea wee
cof shall eunade, operate, and maintain the city
sal tea sie ceotdance with of

 

These shalt bornot be 1 The tells

‘SECTION v - ESTARLIsuMENT oF EoLtcE
5.1 She City shall have charge of all policy matter:
relating to the City bos system and the city special transit
Eysten, including the establishing of fares and other
Eharges, standards of service, route locations, capital
{nprovenenta, annual budgets snd service improvements,

 

‘SpcrION vil = pupLoveR srarus

fy for the ay-to day operacson
SPihe city bus system and the city special transit service
‘necause OTS 12 an indesendent

 

in a lawful fashion.

. = ach =
ganaated 16 commie ah tage ee

(emphases added.) As noted above in ROH § 28-1C.2 and Sections
2.1 and 7.2 of the management agreement, the transit management
services contractor, OTS, is the employer of the bus personnel
and maintains the exclusive right to manage labor relations and
to negotiate collective bargaining agreements. OTS operates to
primary divisions: 1) fixed route public bus transportation (the
bus); and 2) point to point special transit service for qualified
passengers with disabilities as required by the Americans with
Disabilities Act (Handi-van).

Ordinance 96-30, enacted as Article ® of Chapter 13 of
the ROH, codifies the agreement between OTS and DTS.

13-0.4 Cbiigations and responsibilities of transit

Ranagenent services contractor

Ta) Under the transit managenent services contract, the
Tansit management services contractor, at @ minimum,

 

 

 

ordinance 96-30 was enacted in 1995 to require the private
contractor to also provide special transit services beginning in 1997
‘***F0R PUBLICATION*#*

shall have the following general obligations and

responsibilities:

20)" doerate ths in accor:
‘Toutes, schedules ond level of service
Eetablianed pursuant to Section 1-6-1.)

13-6.5° dbiagations and x of departuent of

transportation services.

(al Onder the transit aanagenent services contract, the
Gepartnent of transportation services shall have the
following general obligations and responsibilities:

 

sponesbiliti

 

 

and levels of
required

Establish the routes, scheds
service for the city’ bus syst
Under Section 13-6.1;

ai

     
 

 

(b) fhe department of transportation services may assume,
Under the transit management service contract, other
Gbiigations or responsibilities which are aot contrary
Eo this chapter

 

 

Seances, ho tsen
setiveent statue-of bas or apscial teaneit service
Retscnnel and their coverace under the National iabor

Eelations Board.
13-8.6 Collective bargeining agreements with bus and
Special tranait service personnel,

 

(2) with respect to collective bargaining agreements with
bus and special transit service personnel
(2) the transi Wises contracts
reaeongipt wes of ane

Ss defined in 29 USC Section 152(2), In dealing
with labor organizations;

(2) The transit managenent service contractor shall
Sicei fica welopaents,

Sdeice of the cenarsnant
(Emphases added.)
mu.
The parties do not dispute the facts following. Local
996 represents the employees of OTS. Two distinct bargaining
unite are contained in Local 996. One unit includes bus office
and administrative employees. The second unit includes or

consists of drivers, mechanics, and facility maintenance
‘***F0R PUBLICATION*#*

employees. Employees work at the OTS facility at Kalihi Palama
or at Pearl city.

on February 11, 2003, DTS notified OTS that its fiscal
budget for 2004 would be reduced fron $142 million to
$132,181,000. As @ result, on April 21, 2003, DTS submitted to
Local 996 @ comprehensive contract which reflected the $10
million reduction.

on May 6, 2003, both parties entered into negotiations
for a new labor agreement. The original contract expired on June
30, 2003. Unable to reach @ new agreement, the parties agreed to
a contract extension which continued OTS’s operating and
maintenance and clerical contracts on a day to day basis subject
to a 72 hour strike notice. On August 22, 2003, Local 996 faxed
to OTS @ "72 hour strike notice,” the strike to commence on
Tuesday, August 26, 2003, at 12:01 an.

on August 22, 2003, OTS sent Local 996 a letter
advising Local 996 that bus operators would be paid to complete
their routes after the strike period began at midnight on August
26, 2003.

Tt has cone to our attention the Teamster’s Union has been
devising its members to stop work precisely at 12:00
icnight regardless of whether a bus may still be in revenve
Gervice, We have been told that the Union has even plannea
a \pickop program whereby union volunteers will pickup
Grivers around the Teland and drive them back to their work
Site in private vehicles, This nay be based on the mistaken
Sesunpeion thst drivers will not be paid for any work after
Rignight. The company Wishes to be Clear on this point.
Drivers will be paid for ali work perfermed, inclusing any
Work after midnight, Until such tine as the buses return to
the division

 

 

 
‘**#P0R PUBLICATION***

 

Local 996 sent response letter, advising OTS to be prepared to
call buses in early so that passengers would not be stranded.

Prior to midnight on August 26, 2003, OTS recalled
buses that were not expected to complete their routes until after
midnight to avoid stranding passengers when the strike commenced.
At approximately 11:45 pm on August 25, 2003, OTS sent its
employees hone and subsequently locked it gates. Menbers of
Local 996 were on strike from August 26, 2003 until September 28,
2003. According to OTS no employees would have been allowed back
to work during this time.‘

on September 7, 2003, after five weeks of negotiations,
menbers of Local 996 voted to ratify a new contract. Employees
returned to work on Septenber 29, 2003.

The DLIR estimated there was a rider loss of the

following amounts:

 

 

 

 

 

 

Week Ending Total Number of Bus |Change in Total

and Handi-Van Riders | Number of Bus and

Handi-van Riders
8/30/03 311, 464 75.98
9706/03 8, 794 =99.48
09/13/03 15, 680 98.88
(09/20/03 14,767 98.9%
09/27/03, 15, 666 38.8%

 

 

 

 

 

OPS reasoned that it would be difficult to uphold its duty to
employees who crossed the picket Line. Also, due te the integration
Of the operations, employees who desired to work during che strike would have
Ticele Se'anyening to do.

     
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—

Inn.

Subsequently, members of Local 996 filed for
unemployment compensation benefits for the five weeks during
which they were on strike. In a decision mailed on October 10,
2003 by the DLIR Unemployment Compensation Division (Division),
such benefits were denied pursuant to HRS § 383-30(4) (1993),* on
the ground that the menbers had been involved in @ work stoppage.

Local 996 filed an appeal from the Divisions denial to
the DLIR Appeals Referees’ Office contending that there was no
stoppage of work since OTS was not required to provide any fixed
route transit services during the relevant time period. Local
996 argued the OTS only provided transit services as directed by
DTS, and because DTS did not require such services, there was
“factually no substantial curtailment of the Employer’s business
activities.”

OTS filed for and was granted sunmary judgment by
Appeals Referee Pamela Toguchi (Referee or the Referee), on
April 8, 2004, The Referee apparently made findings that

(2) during the strike, the employer did not provide fixed route

 

services but maintained handi-van services, (2) in comparing the

 

* ps § 383-30 (2993)
states in relevant part

entitied "Disqualification for benefits,”

 

An Sndividual shall be disqualified for benef:

 

‘ai "Labor duepute, For any week with respect to
hich it is found that unesployment is due to 2
Stoppage of work which exists because of @ labor
GiSpote et the factory, establishment, or other
premises at which the individual is of was last
Seployedt«1

 

 

 
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average weekly number of fixed routes for the period of
August 25, 2002 to September 28, 2002 with the corresponding
Weeks during the strike in 2003 there was a reduction in
ridership of 75.98, 99.458, 98.6%, 98.98, and 98.9%,
respectively. The Referee ruled that OTS's essential business
function was the provision of public transportation services and
that bus services during the strike were reduced by 75.9 to
99.48. The pertinent portions of the Referee’s decision stated
as follows:

Cleimant's [(Lccal 996%s)] position on adninistrative sppeal
Se that susnary judgment is inappropriate because there were
faterisl iecues of Zacy as to wnat conseituced the employer
“business activity.” They asserted that if the employer’ =
business activity were defined a5 providing public.
transportation services as required by the government
Agency, and if the agency did not require or compel then to
provide Services during the strike, there would be no
EGbstantial curtaliment of the employer's business

activities. Ascorcing to clajeant-s theory, there would be
Dosurtaileent So business activity at all since the
‘fuplover would-not have been required to orevide any aenera

Bus aercices vhatecever in shat instance, On thar basis,
Eleinents sainteined summary judgment ifthe employer's
favor was not appropriate, as there were Unresolved material
facts oa to what ditection oF instructions the employer
Feceived form the government agency, if any, a6 to its
operations during the strike

 

 

 

Saplover’s action not £2 prov 2

the euployer would have otherwise continued to provide
services if there was no strike.

(Emphasis omitted and emphases added.)

Local 996 then appealed to the court, reiterating the

 

same argument it had presented to the Refe: See gupra. on
April 21, 2005, the court, citing this court in Abilla vw.

Agsalud, 69 Haw. 319, 741 P.2d 1272 (1987), stated that “a labor
‘***FOR PUBLICATION*#*

dispute includes a lockout” and is thus “not dispositive of the
issue of whether Local 996 is entitled to unemployment insurance
benefits.” The court further determined that the Referee was not
wrong in reaching her decision:

The Court also finds, as did the Appeals Officer, that
the parties are not disputing that there wes ® stoppage of
public transportation or bus service. In Jat "
vat 68 Haw. 316, "326,
Tia S45, 952" T1see) Lihereinateer BEM], the court
held'“[a] ‘stoppage of work" is a ‘substantial curtailment’
Of the business activity at the employers establishment.”
Repellents (sic) srgunent is that the tusiness activity of
[ets] was not the provision of public transportation oF Bus
services. "as directed by the City and County of Honolulu,
Departnent of Transportation Services.” The Court finds

 

 

 

zeros One tha rovide

 

enefaved By the Teauout decks
Sha there is nothing to suggest thet the appeals officer's
finding was clearly erroneous or erroneous as a matter of

 

 

  

(emphasis added.) On May 17, 2005, Local 996 filed 2 notice of
appeal to this court against both the DLIR and OTS.
v.

on appeal, Local 996 contends the court’s determination
that there was a “substantial curtailment of OTS’s business
activity” is unsupported by the record or “erroneous” as a matter
of law because (1) the essential business activity of OTS is to
provide bus services at the levels determined by OTS, (2) there
was no “substantial curtailment of business activity” because DTS
@id not require OTS to provide bus services beginning August 26,

2003, and (3) therefore there was no “stoppage of work.”

10
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ofS responds that (1) the DLIR has broad discretion to
implement rules to apply HRS chapter 363, (2) there was no
evidence presented to establish that DIS could change ors
business activity, and (3) there was no evidence presented to
establish that DTS had in fact directed OTS to change its basic
business activity. The DLIR argues that the court correctly
interpreted the law when it determined that OTS's essential
business function was to provide bus services. Additionally,
DLIR contends that Local 996 has raised a frivolous claim and
asks that it be awarded attorney's fees and costs.

Local 996 asks that this court vacate the court's
decision and remand the case back to the Referee’s office with
instructions to hold @ hearing on the issue of whether OTS had
advised OTS it was not required to provide bus services during
the strike period. Local 996 requests, further, that if such an
advisement is found to have been made, then this court make a
determination that the disqualification in HRS 383-30(4) not

apply.

«RS § 363-92 (1993), entitled “Duties end poners of department,
director," provides in re

 

(a)
herein Fei SGepartment™

‘chapter throush the director of labor and industrial
[elations pursuant to chapter S11. The director may
Gelegate to any person such power and authority, vested in
the director by this chapter, as the director deeme
Fessonable and proper for the effective administration of
Ehis chapter, except the power to make rules or
Fegulations . .. The director may require such reports,
fiake such investigations, and teke such other action a the
Girector deans necessary or suitable for the administration
of this chapter,

  

(Emphasis added.)
a
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v
Review of a decision made by the circuit court upon its
review of an agency's decision is a secondary appeal. “In an
appeal from a circuit court’s review of an administrative
decision the appellate court will utilize identical standards

astle 6

 

applied by the circuit court.” waiian Div.
Cooke, Inc. v, Ramil, 71 Haw. 419, 424, 794 P.2d 1115, 1118
(1990). Questions of fact are reviewed under the “clearly
erroneous” standard. Wailuk wy id, 65 Haw. 146,
148, 648 P.2d 1107, 1110 (1982); HRS § 91-14(g) (5). “In
contrast, an agency’s legal conclusions are freely reviewable.
An agency's interpretation of its rules receives deference unless
it is plainly erroneous or inconsistent with the underlying
legislative purpose.” IBEW, 68 Haw. at 322, 713 P.2d at 950
(citation, internal quotation marks, and brackets omitted) .

vi.

When construing a statute such as HRS § 383-30(4), “the
fundamental starting point is the language of the statute itself
+ +. and where the statutory language is plain and unambiguous
[the appellate courts’] sole duty is to give effect to its plain
and obvious meaning.” State v, Kalama, 94 Hawai'i 60, 63, 8 P.3d
1224, 1228 (2000) (internal quotation marks and citations
omitted). As noted previously, HRS § 383-30(4) states that an
individual shall be disqualified for benefits “for any week with
respect to which it is found that unemployment is due toa

stoppage of work which exists because of a labor dispute at the

2
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EE
factory, establishment, or other premises at which the individual

is or was last employed.” (Emphasis added.) The parties do not
Gispute that there was a labor dispute. There can be no
disagreement that OTS is the employer. ROH § 28-1C.2(2) provides
that under the bus services management contract, OTS “shall be

the employer of record of bus and special transit service

personnel, who shall be deemed employees of the [OTS|.”
(Emphases added.) The parties apparently disagree on whether

there was a “stoppage of work” within the meaning of HRS § 383-
30(4).

‘This court has interpreted “stoppage of work” to mean @
“substantial curtailment of . . . business activities at the
employer's establishment (.]” Inter=Island Resorts, Lid. Ww
Akahane, 46 Haw. 140, 148, 377 P.2d 715, 720 (1962). “In
determining whether substantial curtailment has occurred, the
test is whether a strike substantially curtails an
establishment’s essential function or basic business activity.”
ABEH, 68 Haw, at 326, 713 P.2d at 952 (emphasis added).

Local 996 argues that there was no “substantial
[curtasiment of] . . . basic business activity” as required by
IBEW because DTS did not require that OTS provide bus services
beginning on August 26, 2003. Thus it suggests that the Referee
and the court incorrectly held that OTS's essential business
function was the provision of public transportation services.

It may be noted that ROH $ 28-1C.1 grants DTS the
“exclusive power to establish the routes, schedules, and levels

33
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of service of the City bus system.” In that regard, ROH § 28-
1C.4(10) states that OTS will “operate the city bus system in
accordance with routes, schedules, and levels of service
established by the public transit authority pursuant to § 28-
1C.1." Therefore, Local 996 is correct in that OTS must provide
public transit services at levels directed by prs.

Nonetheless, the facts of this case fall within the
scope of HRS § 383-30(4). As noted before, ROH § 28-1C.2 and the
management agreement indicate that OTS is deemed the employer of
the employees of the bus system with the responsibility of
managing, operating and maintaining the transmit system,
including labor relations.

Under ROH § 26-1C.2(a) (4), OTS's “basic business
activity” was to manage, operate, and maintain the city bus
system. As stated in ROH § 28-1C.2(a) (5), OTS “shall have no
Purpose, except the management, operation, and maintenance of the
City bus system as an instrumentality of the City.” The basic
business activity of O78, the employer, then, was the provision
of bus services. According to the data accumulated by DLIR,
there was a substantial curtailment of OTS's business activity
during the strike. Hence, there wae a stoppage of work conducted
by the employer.

That the stoppage of work came about “because of a
labor dispute,” HRS § 383-30(4), would appear apparent, The
phrase “because of” as ordinarily understood means “complenentary
to expressions of the notion of reason or cause(.J” Webster's

uu
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‘Third New Int'l Dictionary 194 (6th ed. 1961). As the Referee
indicated, that the labor dispute was the reason or cause of the
work stoppage was “clear.” She determined that in the absence of
a labor dispute “the employer would otherwise have continued to

provide services|.

 

The facts support the Referee’ s
determination. The contract between OTS and Local 996 had
expired in June 2003. As earlier noted, on August 22, 2003,
Local 996 sent a 72-hour strike notice. On August 26, at the
strikes inception, OTC shut down its services.

Local 996 suggests in its opening brief that OTS’s
actions constituted a lockout. But in Abilla, this court
determined that a work stoppage could be brought about by an
employer's decision to “lock out” its employees, thus
disqualifying them from receiving benefits. 69 Haw. at 321, 741
P.2d at 1273. In that case, the employer took steps to close
down as a defensive measure. Affirming the trial court, this
court, interpreting HRS § 383-30(4), stated that a “*labor
dispute’ covers ‘any controversy concerning tems, tenure or
conditions of employment, or concerning the association or
representation of person in negotiating, fixing, maintaining,
changing, or seeking to arrange terms or conditions of
employment [.]'" Id. at 330, 741 P.2d at 1278 (citation omitted)
(emphasis added). Thus, applying the broad definition of “labor
dispute,” even if DTS “informed OTS that it was not required to
perform services,” the “instruction was generated by the notice
of a strike or a lockout decision,” as the court concluded. The

4s
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measures employed by the employer in anticipation of a strike
under the circumstances of this case, then, do not undermine the
disqualification for unemployment benefits.

In a similar situation the Superior Court of
Pennsylvania in Bako v. Unemplovment Comp, Bd. of Review, 90 A.2d
309, 314 (Pa. Super. 1952), affirmed the disqualification of
unemployment benefits under section 402(d), 43 Pennsylvania
statutes 802.’ In Bako, the steel company, in anticipation of
the strike, began @ gradual shutdown of its operations. Id. at
311. Rejecting Bako’s' contention that the employees were
eligible for benefits as a result of being laid off prior to the
strike due to lack of work, the court stated:

hen a strike is inminent, when an employer has been
pilleialiy notified that serike will occur, and has
Fessonabie grounds for # belie! thet the strike will
actually take place, be may prior to and in anticination

 

 

 

thereods $3 seary neaeura:
Eisnerti-curine the nendencs of the etrike. The necore and
Extent of such measures depend pon the kind of work and the

Circunstances in which it is conducted, and ordinarily the
board will not overrule the henest judgment of an employer.

Id. at 312 (emphases added). Similarly, OTS took de

 

nsive

measures. After being served with the 72-hour notice of strike,

Section 402(4) is Fenneylva
somewhat similar, and provides as follows

 

2's counterpart to HRS 383-30, is

Ian employee shall be ineligible for compensation for any
theek (2) in shich bis Unemployment 1s dus to 3.

 

ther then-a lockout) at the factory, establish
‘cther premise at which he is or was Lest employed.

 

(emphasis added.)

© Bako was the representative for mesbers of United Steelworkers of

Anerics, Congress of Industrial Organizations.

 

16
+*+FOR PUBLICATION***
oo

and concerned that 2 walk-out would occur, OTS took several steps
to protect its customers and its property. As indicated before,
after failed negotiations with Local 996 to have bus operators
complete routes following the commencement of the strike, OTS
recalled all buses early. This was to ensure that passengers
would not be stranded if bus operators “stopped work precisely at
42:00." See supra. By 11:45 pm, OTS had sent 211 employees hone
and locked its gates thereafter.

In Ablondi v, Bd. of Review, 73 A.2d 262, 266 (N.J-
Super. Ct. App. Div. 1950), the Superior Court of New Jersey
determined that defensive measures employed by the employer did
not affect the disqualification of enployees from workers
compensation under New Jersey Statutes § 43:21-5(d).* In
Ablondi, the employer was in the business of processing fur
skins, when the employees’ collective bargaining agreement
expired. Id. at 263. The fur skins took several weeks to
process and once it had begun, processing had to be completed in
the regular course to avoid spoiling. Id, at 264. Faced with a

risk of spoilage due to the sudden cessation of work, the

+ tow Jersey Revised Statutes § 43:21-5(d) is similar to RRS § 363-
30(4) and states in pertinent. part:

lan individual shall be disqualified for benefits:

ie) itis is found that this unemplovment ie due toa
Sheets ce totablishnent or ceher preniges at which the

 

Tnaividual ie or was last employed.
(Emphasis added.
Ft
‘***FOR PUBLICATION*#*

 

employer decided not to accept any new business; as a result no
work was available. Id.

‘The appellants argued that they were unemployed due to
2 lack of work, rather than the labor dispute and therefore they
were eligible for such benefits. Disagreeing, that court
concluded

the lack of work was directly attributeble to the labor
Gispute and the temporary lay-offe did not, for purposes of
tthe labor dispute disqualificstion clause, ‘sever’ the
enployer-enployee relationship. notwithstanding the
Iey-offs the parties expected that shen the Labor dispute
wes terminates the employees Would return to work at the
employer's plant and, in fact, they did so.

Id, at 266. Similarly, Local 996 members apparently expected
that when the labor dispute was terminated they would and in fact
did return to work. As reported, aupra, the lack of work was a
result of the labor dispute, The Ablondi court further stated,
“indeed, it has been held that where employees are laid off for
reasons wholly unrelated to any controversy and a later labor
dispute prevents their scheduled resumption of work, the
statutory disqualification applies fully during the subsequent
period of work stoppage resulting from the labor dispute.” Id.
(citing v. Appeals Bd. of
Comm'n, 35 N.W.2d $42 (Mich. 1948)). Here, it is evident that
O8S's actions were related to the strike notice issued by Local
996.

Both Bako and Ablondi are persuasive. Thus, it is

concluded that the court was not wrong in its conclusion that the

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Referee was correct in deciding that under HRS § 383-30
“stoppage of work” resulted from a labor dispute.
vin.

As to the question of whether DTS excused OTS from
providing general bus service, or so instructed it, the labor
dispute and interruption of bus services fell within the scope of
HRS § 383-30(4) under the facts of this case. As indicated
previously, this is true notwithstanding that OTS may have
advised or instructed OTS that bus services were not required, as
both the Referee and court decided. Moreover, the ordinances and
management agreement instruct that OTS shall have control over
the events related to labor contracts. ROH § 28-1C.4(5) (a)
states that “the bus management services contractor shall be the
exclusive negotiator with the Hawaii Teamsters Local 996 as the
exclusive bargaining representative of bus personnel, but shall.
solicit and receive the advice of the public transit
authority[.]” (Emphases added.) ROH § 13-8.6 states that

(w)ith respect to collective baraaining agreements with bus

ang special transit. service personnel!

(1) “the teansit management. service contractor shall be the
wien shall

wee of an a 3s defined in 29 USC
Section 152(2),[") in dealing with labor
organizations:

Section 152(2) reads:

The term "employer" includes sny person acting as an agent
of an enployer, directly or indirectly, but shall pot
Shelude the United states or any wholly owned Government
corporation, or any Federal Reserve Bank, or any state or
political eubdivieion thereof, or any person subject to the
Raiinay Labor Act, as amended’ from tine to time, oF any
Labor exgenizatson [other than when scting as ah employer,
or anyone acting in the capacity of officer or egent of such
Teper organization

 

 

1s
‘+*#20R PUBLICATION***

(2) (07S) hati advise the public transit authority of
Significant labor relations developments, but shall

 

separtnent
(Emphases added.) Section 7.2 of the management agreement

specifically states that

ors shal neaotiate, an Labor a
‘necessary for the day-to day operation of the city
Bus system. = secause dependent
153 ra

(emphases added.)

‘The ordinances and management agreement, then,
expressly establish that OTS is dened the employer with respect
to labor relations and exercises entire control over all labor
contract negotiations. OTS is not “bound by any recommendations
or advice” of DTS. ROH § 13-8.6(2). As the management agreement
states, the city, through DTS “shall not assert control over the

+ + labor relations of OTS.” tone of the parties claim that
breach of such provisions took place. Thus there is no reason to
remand the case, as requested by Local 996, for a finding of fact
as to whether DTS advised OTS to halt its services.
via.

DLIR argues that the Local 996 appeal 1s frivolous and
moves for sanctions, including attorneys’ fees and costs,
Pursuant to Hawas‘l Rules of Appellate Procedure (HRAP) Rule 36."

It 4s concluded that DLIR is not entitled to HRAP Rule 38 relief.

 

WRAP Rule 38 atetes that “(sJf
determine th.
Gneiuding Fes

Hawai'i appellate court shall
‘an appeal decided by it wae frivolous, it may averd cama
enable attorney's fees and cost to the appellee,”

   

 

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a

‘The term frivolous under HRAP Rule 38 has been defined
as being “nanifestly and palpably without merit so as to indicate
bad faith on the pleader’s part.” Coll v. McCarthy, 72 Haw. 20,
29, 804 P.2d 881, B87 (1991) (citation, internal quotation marks,
and brackets omitted). This court has stated that “an appeal may
be frivolous when it merely restates arguments that the [trial]
court properly rejected [or that] were so groundless as to be
held sanctionable by the [trial] court.” Abastillas v. Kekona,
87 Hawas's 446, 449, 958 P.2d 1136, 1139 (1998) (brackets in
original) (citing Mestaver v, Wisconsin Physicians Serv. Ins.
Corps, 905 F.2d 1077, 1081 (7th Cir, 1990)). HRAP Rule 38
sanctions have been imposed in past cases where the “appellant
has engaged in a pattern of frivolous and vexatious litigation,”
ds, or where appellants continued to acknowledge controlling
authority contrary to their assertions. Gold v. Harrison, 88
Hawai'i 94, 157, 962 P.2d 353, 367 (1998), cert, denied, 526 U.S.
iors (1999).

This is the first case brought to this court contending
that the “substantial curtailment” of business was caused by a
third party. In Gold, Gold’s claim was held to be frivolous when
Gold failed to point to new evidence or case law which had not
already been cited to in the lower court. Id. at 107, 962 P.24
at 366. While Locel 996 does restate arguments that both the
referee and the court have properly rejected, no “controlling
authority” contrary to the assertions being made existed. Id.
Local 996 in apparent good faith argued that the essential

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business function of OTS was the provision of bus services “at
levels” determined by the City. ‘Thus, the appeal was not
frivolous and attorneys’ fees and costs are not justified.
ax,
‘The court's April 21, 2005 final judgment is therefore

affirmed.

on the brlefe: Yom

Sean Kim for
claimant-appel lant. Lhe Airtherinann—

Frances £.H. Lum and
LicAnn Yamashiro, Deputy Rieu Co Ninteeegane

Attorneys General, for

appellee-appellee. Pree

Gregory M. Sato and
Paul M. Saito (Torkildson, Gone, Qndteidh -
Katz, Fonseca, Moore &

Hetherington), for

employer-appeilee.