Title: Del Monte Fresh Produce

State: hawaii

Issuer: Hawaii Supreme Court

Document:

“++ FOR PUBLICATION IN WEST'S HAWAII REPORTS AND PACIFIC REPORTER,

IN THE SUPREME COURT OF THE STATE OF HAWAT'T

 

ove:

 

EDWARD C. LITTLETON;

 

DEL MONTE FRESH PRODUCE (HAWAII), INC.
STACIE SASAGAWA; GORDON REZENTES; and DIXON SUZUKI,

Appellants~Appellants,

AFL-CIO,

INTERNATIONAL LONGSHORE AND WAREHOUSE UNION, LOCAL 142,
Union-Appel lee-Appellee,

and
HAWAII LABOR RELATIONS BOARD; BRIAN K. NAKAMURA, Chairperson
CHESTER C. KUNITAKE, Board Member; and KATHLEEN
RACUYA-MARKRICH, Bord Member, Appellees-Appellees.

 

 

no. 27265 5
APPEAL FROM THE FIRST CIRCUIT couRT Alm
(CIV. NO. 06-1-0765) Buz. &
az =
NOVEMBER 14, 2006 sel
Be =
MOON, C.J., .LEVINSON, NAKAYAMA, AND DUFFY, Jd} °
s

WITH ACOBA, J.,/ CONCURRING SEPARATELY

OPINION OF THE COURT BY DUFFY, J.

Appellant-appellants Del Monte Fresh Produce (Hawaii),
Stacie Sasagawa, Gordon Rezentes, and

Littleton,
appeal from

Inc., Edward C.

(her
2008 final judgment of the Circuit Court of the

einafter, collectively, Del Monte]

 

the April 1,

 

aa
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First Circuit,? affirming the Hawaii Labor Relations Board's
(HERB) ruling in favor of appellee-appellee International

Longshore and Warehouse Union, Local 142, AFL-CIO (h

 

einafter
HLMU or Union] in @ labor dispute arising out of the downsizing
fand relocation of Del Monte’s chilled and frozen fruit operations
facility in Honolulu. .

On appeal, Del Monte argues that: (1) the HLRB erred
in finding that Del Monte violated Hawai'i Revised Statutes (HRS)
§ 277-6(4) (1993) by refusing to bargain in good faith with the
Unions (2) the HLURB erred in finding that Del Monte interfered
with or discriminated against the Union, in violation of HRS $$
377-6(1) and (3), in an “inherently destructive” manner; and (3)
the HLRB’s remedial order, which, among other things, required
Bel Monte to award certain laid-off workers “enhanced separation
benefits identified in previous negotiations or the cash value
thereof,” was in violation of the HLRB's statutory authority.

As discussed below, we sffirm the circuit court's
rulings upholding the HLRE’s conclusion that Cel Monte committed

unfair lebor practices under HRS § 377-6(4), for failing to meet

 

ite bargeining obligation, and under HRS § 377-6(1), for

  

interfering with the exercise of guaranteed employee rights,
because there was sufficient evidence to support both charges.

The Menereble abr jer thie matter.

 

8S. Mekenna presided

 
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However, we reverse the circuit court’s decision regarding HRS §
377~6(3) because the HLRB incorrectly interpreted the law,
applying an erroneous understanding of what activity can
constitute “discrimination.” Lastly, we hold that the HLRB has
broad statutory authority under HRS § 377-9(d) to craft remedies
for unfair labor practices, and that the remedy in this case was
not an abuse of discretion.

Therefore, we affirm in pert and reverse in part the
circuit court’s April 1, 2005 final judgment.

I. BACKGROUND
Facts

Del Monte Fresh Produce (Hawaii), Inc. grows and sells
whole pineapple and processed pineapple products. The company is,
part of a larger corporation, the Del Monte Fresh Produce
Company, which has headquarters in Coral Gables, Florida. At the
time this action arcse, Del Monte’s Hawai'i operations consisted
of three units: the O'ahu Plantation (hereinafter, Plantation],
where pineapples are grown and harvested; Kunie Processing and
Packing Operations unit, also known as Kunia Fresh Fruit
{hereinafter, KFF], where pineapples are packaged whole or

processed and made into concentrate juic 1e Wasakamilo

 

and

 

Henol

 

Chilled/Frezen Operation (hereinafter, HCFO), where

Pineapples are process:

 

dé into chilled pineapple products
   

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‘The ILWU, Local 142 has been the exclusive bargaining
representative of Del Monte employees since 1945. The employees

are organized into three

 

parate bargaining units, which
correspond to the three Del Monte operations: Plantation, KFF,
and HCFO. Each bargaining unit has its own collective bargaining
agreement, with separate seniority systems within the unit. . In
addition to these Union employees, Del Monte employs “seasonal”
employees whose enploynent is not covered by the collective

bargaining agreement until they have worked 100 days for the

company, at which point they become “covered seasonal. ”?

 

Del Monte’s Plan to Relocate the HCFO Facility

In Septenber 2001, Del Nonte’s corporate parent decided

 

cate HCFO work to

 

nger, California. In March 2003, a
Gecision was mace to keep limited HCFO work in Hawai'i (for the
local market), but to transfer this work to the KFF concentrate
facility, closing the Waiskamilo HCFO facility.

On April 11, 2003, the company informed the Union of

these plans through a letter sent to the Union, HCFO employees,

 

and the Director of the Department of Labor and Industrial
Relations. In the letter, the company indicated that it would

ley off sixty-seven of seve!

 

y-seven HCFO enployees, effective

 

requis” employees

fered seasore]” werkere, while covered
oreere! © te fewer beretite then “reguli

   
  

 

 
 

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HAWAF' REPORTS AND PACIFIC REPORTER,

June 30, 2003. The letter also stated that Del Monte had 154
vacancies at the Plantation and KFF facility to which all
displaced workers could apply.

On May 30, 2003, Del Monte posted vacancies for
fourteen HCFO positions that would work in the Kunia plant.

By June 2, 2003, Del Monte and its parent company’ had
finalized plans to merge operations at Kunia. Under this plan, a
downsized processing unit at KFF would be made up of fourteen
HCFO positions who would process pineapple and make concentrate.
Further, Del Monte wished to transfer two pezmanent KFF employees
eho had worked in concentrate into the new HCFO bargaining unit
at Kunis. The relocated HCFO employees would provide Limited
fresh fruit production in addition to operating the concentrate

plant, while the rest of the KFF employees wou!

 

return to the

Fresh Fruit operation.

 

Del Monte set July 1, 2003 as the date to have the HCFO

operations up and running in Kunis.

 

2. The Union Requests Information Regarding the Relocation
and Files an Unfair Labor Practice Charge with the

BLRB.

 

On April 22, 2003, the ILWU requested to bargain with

Del Monte o

 

¥ the decision to close the HCFO plan

 

and its

effect

 

At the same time, the Unicn requested information from

the company related to the decision to close the HCFO plant and
 

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lay off, transfer, and reassign its employees as a result, as

 

well as a request for information related to the effects of the
closing. Del Monte responded by providing some information and
by engaging in effects bargaining.‘

On May 12, 2003, the Union filed an unfair labor
Practice complaint with the HLRB, alleging that Del Monte refused
to bargain collectively, refused to provide information, and
interfered with, restrained, and coerced its employees “in the
exercise of their Section 7 rights under the Act.“

In the second week of June 2003, the parties commenced
bargaining sessions concerning the effects of the closure,

including layoffs and benefits.

 

Del Monte and the Union Engage in Bargaining over the
Effects of the HCFO relocation.

‘The parties met on June 10, 12, 17, and 21, 2003. be

Monte’s bargaining committee met with the Union at the Union's

 

‘The parties dicpute the extent of De] Monte’
Union's information requests. ‘The

refuses to provide
the facili

responsiveness to the
‘chat white Del Monte:

sate regarding itt cecision to close
‘did provice other information and bergein ever effects
However, the’ HIRE cid! not cetermine whether Del Monte’? conavet Im response to
information requests war an unfair laber practice because it rected ite
Finding of = failure te bargain on ether evicence

     

     
    
 

 

 

 

  
   

HRS § 277-60), due ted

  
    
   
 

 

requested te
- sileoing thet
gaining egtecrent Like the
charge, the URE Gio net edceese this

foune other enpleyer viciaticns.

 

 

 

.
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own hall making itself available for each of these sessions and
never refusing to meet with the Union.

At the first effects bargaining meeting, on June 10,
2003, the Union proposed the following:

(1) Enhanced severance benefits for laid-off HCFO
workers, consisting of two additional days of pay for each year
of service, with both lump-sun and installment pay options.

(2) Allowing the use of pre-tax severance benefits to
pay for extended medical coverage for laid-off workers.

(3) Extended housing for one month of each year of
service at current rental rates (in addition to the contractual
extension of one year).

(4) Various options for current HCFO employees:

(A) Using @ joint labor/managenent subcommittee to
determine the qualified laber pool from which each
retained bargaining unit position at HCFO Kunia
would be selected:

(B) Allowing employees who left prior to the
scheduled layoff date to receive full separation

benefits: and

 

(C) Permitting senior employees to elect

severance, bumping, or transfer into the new

 

two-week familiarization pericd,

 

 

fer to

 

Rules governing the t

 

 

roed unit:
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(A) Retention of ali HCFO bargaining unit job
classifications at HCFO Kunia, with laid-off HCFO
employees retaining seniority righte;

(B) Giving laid-off HCFO employees an option to
suspend severance and retain recall rights for
future vacancies at the merged unit; and,”

(C) Transferring five HCFO employees into KFF, and
creating forty upgraded' regular KFF positions
over four years.

The parties caucused, and the Del Monte Conmittee®
Presented its initial position and responded to the Union
Proposal. Negotiations continued at the June 12, 2003 session,
where the Union began by asking for a complete response to its
Prior information requests and presented @ revised proposal.

At the June 17, 2003 session, Del Mente presented a
Package proposal, which the Union rejected. However, after
further negotietions, several tentative agreenents were reached,
subject to an agreement cn ell matters. The parties agreed to:

(2) en additionel one-half day of severence benefits for each

 

year of service for laid-off workers; (2) various pay-out options

 

for severance benefits; (3) an two months of medical

 

An upgrace us e KFF nent involves
noving an enpleyee fren “cover States,

  
  
   

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coverage for affected employees; and (4) an additional month’ of
housing for each year of service. Furthermore, with respect to
the HCFO employee options after the closure, the parties agreed
to: (5) use of a joint lebor/management subcommittee to identity
the labor pool from which HCFO positions would be allocated:”
(6) termination benefits for employees who left the company ‘prior
to the scheduled layoff dates and (7) the right of senioé
employees to accept a job, elect severance, bump, or transfer to
the new position with » familiarization period.’ In exchange for
these proposals, Del Nonte sought the Union's agreement to:
(1) the transfer of two KFF concentrate employees to the HCFO
unit; (2) the transfer of three HCFO mechanics to the Plantation
unit; and (3) the withdrawal of the unfair labor practice
charges. The Union was willing to withdraw the pending charge
with the HERE if settlement wes reached. However, the Union was
not willing to make the cther concessions unless Del Monte agreed
to the Union's upgrade proposal.

4. The Final Bargaining Session and the June 21 Letter

At the June 21, 2003 bergaining session, Del Monte gave

the Union a written letter setting forth the company’s final

 
 
  

ing jobs be
1 hewever, added
nether eriterie, pursuant te Del Nonte's request

deter
gual

  
 
 

The ports
fer reeal
 

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offer. The letter offered two basic alternatives: (1) that the

Union agree to the tentative agreements that had been ri

 

ched as
of June 17, 2003, inctuding the transfer of two KFF positions
into the HCFO bargaining unit, and adding the condition that the
Union withdraw its pending untair labor practice charges: or

(2) that a1] HCFO employees be terminated,’ without any transfer
to KFF, and receive only pre-existing termination benefits under
the collective bargaining agreenent.! with respect to this

offer, the HLRE made the following findings of fact

 

38. On June 21, 2003 DEL MONTE’ S committee handed the
Union DEL HONTE’s final offer that spelled est the
consequences 1f the Union did not agree to the final
offer. “the firet half of the offer reflectes the
Tentative agreenents reached as cf June 31, 2009 but
alec regsirea the Union to witheraw the unfeir lebor
Practice complaints

 

19, Starting on page four of the fins! offer, DEL MONTE
13 the consequences if the Union rejected the
offer, if the Union aig net accept CEL MONTE’ s fine!
F the company planned to tersinate #11 HCFO
oyees with the exception of = couple of journey
employees who would be terminates after the
Glenantiing cf the MCFO at Wsiekanilo. The terminated
HCFO employees wcule receive cnly the terminstion
Denefits required under the collective bargaining
fone of the enhanced Henefite discussed
in eftecte barge Tt was a takenst-orsleavenit
Ercposition. DEL HOMIE intended to eapty out the
Bargeina Union's ecceptance of the
citer would inplenent the
consequences cn July 1, 2002 1f the Union did net
accept the effer by noon en Sone 36. The Union
Fejectes TEL MONTE’ effer ee ondew!

 

 

   

 

 

 

   

  
 
 

 
  

off ae of oune 30,
veer would be retained until all dlenantling work was
206:

 

   

hencenente discussed in pri

fe wculd be given es & lonp-eun payments

  

 
   

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The letter also specified that if the Union did not
agree to the proposal, Del Monte intended to create two mechanics
Positions in the Plantation unit, create two jobs in the KFF
unit, temporarily transfer sone KFF employees to laborer
positions to assist with duties involving processing operations,
and “take other steps necessary to operate the relocated
operation” in compliance with applicable contract provisions.
Lastly, Del Monte stated that it “remain{ed] willing and able to
meet with the ILWU to discuss any further questions or concerns
concerning the terms and conditions of affected employees.”

5. The Aftermath and Subsequent Actions of the Parties

After the Union rejected Del Monte’s offer,

Negotiations were discontinued. During the week of June 23,

 

2003, a12 processing operations at Weiekamilo ceased and Del
Monte began trial runs in Kunia using HCFO employees selected
from the sign up lists. On June 30, 2003, Del Monte proceeded
with the downsized HCFO cperations. Rather than lay off all HCFO
employees, however, Del Monte transferred the fourteen senior

most employees who had signed up for the new job posting to

Kuna. The remaining fifty-five HCFO employees were laid off

 
 
   

Feason, Del Monte decided
on ples Tn the Jone

   
   
 

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and paid severance benefits as specified in the collective
bargaining agreement.
B. Procedural History
3. The HLRB Proceedings and Decision

As set forth above, the ILM first. filed an unfair,
labor practice complaint with the HLRB on May 12, 2003, which was
later superceded by an amended complaint on June 25, 2003. In
its second amended complaint, the Union alleged violations of HRS
$$ 377-€(2), (3), (4), (6) and (8). The BLRB held hearings on
June 27 and 30, July 1, 11, 22, 23, 28, and 31, 2003.

‘The HLRB issued its “Findings of Fact, Conclusions of
Law, and Order” on March 24, 2008. In @ 2-1 decision, the HLRB
ruled thet Del Monte violated HRS § 377-6(4) for refusing to

bargain," as well as HRS § 377-6(1) and HRS § 377-6(3)." The

 

‘The MUAB found that the decision te close the Maiakamilo facility
4 mandetory subject of Eargsining, eng therefore there was no fatlore
to bargain with reepect to that ce fs uae the sole point on whieh
Chairman Kathleen Racuye-Markrich concurred.

      
 

       

   
  
  

 

. 16 “Unfair labor prectices of employers,”
provides

-e labor practice fer en employer

cr ceezce the employer's
 

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HLRB did not address the Union's allegations of failure to

Provide information and contractual violations, having alr

 

dy

found a failure to bargain and discriminatory conduct on the

basis of Del Montes final offer. As such, the HLRE made the

following conclusions of law:

»

 

The Board concludes that the Employer's decision to
close the Waiskanilo facility and Feiceate the bulk of
ite operations te Sanger was not a mandatory subject,
cf brgaining so that ite failure to engage’ in
Regotisticns or provide infernation regareing the nove
Gig not constitute an unésir labor practice...

 

 

 

1é on the record, the Board concludes that the
conditions imposes Gn bargaining within the Exployer's
final offer were “so onerous oF unreasonable ae te
indicate bad faith.” The first half of the final
offer reflectes the tentative agreenents reached es of
Sune’ 17, 2003 ana requires the Union te witnersy the
unfair lator practice complaints. If the Unien dic
ot accept the final offer the company planes te
terminate 11 HCFO employees except a fev sourney
esployeer who would be terminated after t

Sienantling cf HCFO Melekenile. The terminated
eaployees would receive only the termination benefi
Fequired under the collective bargaining agreenent
ith none of the enhances benefite discussed in
effects bargaining. it was o take-steor-leavecit
proposition which vse intendec to enpty out the
Eargaining unit absent the Union's acceptance. DEL
MONTE cteted st uculd inplenent ‘the consequences on
Joly 2, 2003 if the union aid not accept the offer by
hoch oh lune 25ra-- The Board conclude: therefore that
DEL MONTE refuses to bargain in gecd f2ith with the
HIND and therefore viclaved HRS § 377-618).

 

 

 

 

     

 

 

 

 

 

 

‘The Boare concludes that DEL MONTE violated HRE § 377-
€(1) ene (3) By its innerently aestrvctive
ciscrininatory act of threstening to temanate all
Fenbere cf the BCT: clrected against
Sil bergeinine oni i least for the
exployeer whe

bees.

     
  
  

      

in in the Bergeinirg unit

   

Heprecenteeive:
   

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In support of its finding that Del Monte refused to
bargain in good faith, in violation of HRS § 377-6(4), the HLRE

said the following:

 

The Employer sinply promised to terminate all
bargaining unit members on three cays’ notice unless the
Unien capitulated to its terme and forfeited its rights to»
recress.. By emptying the ACFO bargaining unit of afl of ite
penbers the Employer would have satisfied ite bargaining
obligations by sinply destroying the bargaining unit. +s

 

This was perticvlerly insidious Because DEL MONTE
planned te Tetain the previourly promised HeFO jobs and
functions at Munie. Zt wold then create new positions,
combined positions doing former HCfO work (Boiler/suice,
operator and packaging machine operator], and then transfer
KEP exployees to labarer positions to do\the rest of they
former HCFO work. DEL NORTE sie planned to pest st the
Elantaticn the journey positiene sf hed planned to transfer
from HCFO ang £111 accordingly. Any newly hired plantation
mechanic woule end up performing NCFO work.” With ne

Cent ractusl obligation under MCFO, SUZUKI agreed DEL MONTE
could freely create these new positions in REF to do the
fcrmer ACEO work

    

 

As 2 “hunanitarien” gesture the Enpleyer intended to
Permit the 1aid off HCFO menbert to appiy for and receive
Preference for vacancies st Konia: if selected for one of
the reputed 184 vacancies, s former HCFO renber Wooley
however, be hired as an entry level

Such Statue entitled an enployes to only statutoriiy
Fequired rights and benefits, there would be no right te
iin @ bargaining unit, eny accrues senierity woule be
Gliminated, there would be no severance benefits, end no
Highte uncer any collective Bargaizing agreement. “Up to 30
years of cervice waule be washed no the workforce
Would be conprised of contract day later

 

 

 

 

      

 

 

 

 

ronicaily, the forner HCFO, now seasonal, employee:
night have appiiée for whatever ef their ele sees red been
traneferres te Konia, Upen peeting, the new-eeascnal
employees could have applied fer tenporsry seeignnent to
their newly postec cle cbs. if ne resvlariy exployed
opplicent was cetermined to queiify to be placed in the
petition, the cbvicusly qualifies former HCPO expleyet
Neuie end up doing their ele Jeb, except they would be
stripped cf bargained for senefite cr fargesting rights, and
a gubstantiel savings te the Employer. nile the
Enployer cleins thet such osteenes wefe not targeted, it
sito concedes they were, with the accerpanying sdvertages,

 

 

 

 

 

 

 
 

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The HLRB was not persuaded by Del Monte’s four defenses
to bad faith bargaining. In response to Del Monte’s argument
that the layoffs were necessary in order to meet the scheduled
transition of remaining HCFO functions to Kunia, the HLRB found
that such layoffs appeared not to have been an operational
necessity, because the plan was ultimately withdrawn. Second,
the HLRB dismissed Del Monte’s argument that it was not
responsible for the collapse in negotiations because in and after
its final offer the company invited further negotiations, stating
the following: “the utility of negotiations with the Union
representing a barcaining unit which was to be unilaterally
stripped of membership, and therefore bargaining power, escapes

the Board.” In response to Del Monte’s argument that its final
offer was not an unlawful condition, but enly served to advise
the Union of “en alternative thet enphasized the comparative
advantages of the final package,” the HLRE found that “when the
Yelternative’ is nothing ore than @ promise to empty the

bergaining unit which effectively mekes further bargaining

impossible, characterizing the threat as @ consequence rather

 

 

than as condition can make no meaningful d:

 

ference.” Lastly, in
response to Del Monte’s argument that its conduct throughout the

course of bargaining p

 

or to the final offer -~ in particular

the uncontested mutual concessions -- reflected such indicia of
 

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good faith that on the “totality of circumstances” @ finding of
bad faith was not warranted, the HLRB concluded that “any
apparent indicia of good faith that could be inferred by the
Employer’s concessions or conduct prior to its final offer was
rendered illusory by the terms of that offer.*

The HLRE issued the following remedial order:. .

1, DEL MONTE shall cease and desist from the sbove
identifies unfair 1abor practices and resune effects
bargaining with the ILMU subject to the following
conaitions

 

ALL HCFO enters

  

ctf as 2 result of the
Closing of the Naiskanslo faciiity shail be
awarded the enhances severance benefits
identified in previous negotiations oF the cash
value thereo!s

 

b. Any HCFO menbers transferred or hired into
equivalent positions in the KFF or plantation
Bargaining unite shail be credited with eli
senjority and benefits accrued within the HCFO
bargaining unit?

©. For any equivalent HCFO job being performed by
KEF or Plantation employees, there shall be
ew permanent positicn establigned within the
effected [sic} eargeining unity and

 

 

¢. BEL WONTE hall provide the ILAY with « detailed
Conplete list of its current vacancies.
Guelitied ciepiaces HCFO enpicyees shell have
Fignte of first refusal inthe filling of any
vecancies, If the cuties to be performed ore
substantially the eane as those of the HCFO Job
fron which the employee wae leic off, the neely
filled porition shell be made permanent and the
employee afforded the senuerity eng rights

    

 

    

 

 

 

2. The conditions ieentities above may be mecified or
weives by the motel consent cf the perties dn
Eargaining. But unless waives of deferred by mutual
consent, SEL MONTE shell inplenent the above

 

  

 

  

‘an not only

‘evicusiy bargesned for
benefitas
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conditions within 45 days of the issuance of thie
orders

 

3. Respondents shall innedistely post copies of this
Gecision in conspicuous places at work sites unere
‘employees of the bargaining unit agsenble and
Songregste, anc cn the Respondents’ mebelte. for
period ef 60 days from the initial date of posting

    

The Circuit Court Affirms the HLRB Decision

 

On April 23, 2004, Del Monte filed ite notice of appeal

 

to the circuit court." The circuit court affirmed the HLRB’s

decision, stating in its September 20, 2004 decision:

 

With respect to the mixes questions of Lew and fact
regarding whether Appellant Dergsined in bec faith and

whether Appeilent snterfered with or discrinineted against
the Unien'in an inherently destructive manner, this Court
must give deference to the SLRE's decision, and cannot

Substitute its own Judgment for that of the Agency, Be
upon, the evidence, the court dees not conclude chat the
HURB’s Findings ene Conclusions were clearly erroneous

 

 

With respect to the renedy of proving (sicl enhanced
separation benefits, besed upon HyR.e. Section S17=3{a)s the
Court does not conclude thet the SLAB erred ac a matter of
Low in awarding such benefite: Accordingly, the NLAB'S
Decision No. ¢47 i AFFIRMED.

    

 

Judgment and Notice of Entry of Judonent was filed on
April 1, 2005. On April 29, 2005, Del Monte filed its Notice of
Appeal to the Supreme Court.

ms EV

A. Secondary Appeal

Review of # decision rade ty the circuit court open
ite review of an agency's decision 14 8 secondary appeal
The standard of review 22 che in sbich this court must
Getermine whether the circuit court was right oF wrong sn
Ste decision, epplying the stancarcs eet fe1

ie)

     

   

 
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Korean Buddhist Dae Won Sa 7 if Hawai'i vy, van, &

Hawai'i 217, 229, 953 P.2d 1318, 1327 (1998) (quoting Bragg v.

 

te Fa: to. , €1 Hewai'i 302, 304, 916 P.2d 1203,

1205 (1996)) (alteration in original). HRS § 91-14, entitled
“Judicial review of contested cases,” provides in relevant part:

{g)___ Upon review of the record the court may atffem
the decision cf the agency or renand the ca
instructions for further proceedings; or it nay Teverse oF
nogify the decision 1 rights of

          

   

 

the petitioners nay have been prejudiced because ihe
ecrinistrative findings, conclusions, decisions, or orders

(2) In violation of constitutional or statotory

   

 

 

provisiones or

(2) Te excese of the statutory authority ex
Surieaiction of the agency: or

(2) ede ‘upon unlawful preceduces or

(4) Affected by other errer of laws or

(5) Clearly erroneous in view of the reliable,
probative, ane subetancial evidence on the whole

(6) AEbitrary, or capricious, of characterized by

abuse of discretion cr clearly unwarrented
exercise of iscretion

“[U]nder HRS § 91-14(g), conclusions of law are reviewsble under

subsections (1), (2), and (4

 

ons regarding procedural

 

que

defects under subsection (3): findings of fact under subsection

 

(S)i and an agency's exercise of discretion under subsection

 

465, 918 P.2d

 

 

‘Trust Estate, 4 Hew. App. 633

 

 
   

FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER *

8 istrative Roency Conclusions of Law

Fact

An agency’s conclusions of law are reviewed de novo,
Camara v. Aosalud, 67 Haw. 212, 216, 685 P.2d 794, 797 (1984),
while an agency's factual findings are reviewed for clear error,
HRS § 91-14(g) (5). A “[conclusion of law) that presents mized
questions of fact and law is reviewed under the clearly erroneous
Standard because the conclusion is dependent upon the facts and
circumstances of the particular case.” Brice v. Zoning Bd. of
Appeals of City and County of Honolulu, 77 Hawai'i 168, 172, 983
P.2d 629, 633 (1994).

As a general matter, @ finding of fact or @ mixed
determination of law and fact is clearly erroneous when “(1) the
record lacks substantial evidence to support the finding or
determination, or (2) despite substantial evidence to support the
finding or determination, the appellate court is left with the

definite and firm conviction that a mistake has been made.” In

re Water Use Permit Applications, 94 Hawai'i 97, 119, 9 P.3d 409,
431 (2000). Substantial evidence is “credible evidence which is

of sufficient quelity end probative value to enable a person of

reasonable caution

 

support @ conc

 

(quoting Leslie

  

26 1220, 1225
(2999).
 

Statutory interpretation is “a question of law
reviewable de novo.” State v, Levi, 102 Hawai'i 282, 285, 75
P.3d 1173, 1176 (2003) (quoting State v. Arcee, 84 Hawat'l 1, 10,

928 P.26 843, 852 (1996)). This court's statutory construction

 

is quided by established rules:

First, the fundamental starting peint for statutory
interpretation is the Language of the statute steel!
Secong, where the statutory language Ss plain and
unenbiguous, cur sole duty ie to give effect te its plain
‘and ebvicus’ meaning. Thifd, implicit in the tesk of”
Statutory construction 1s cur foremost ebligetion co
ascertain ano give effect to the intention of the
legislature, which is to be obtained primarily trom the
language contained in the statute itself. Fourth, when
there is doubt, coubleness of meaning, of indistinct:

or uncertsinty’ of an expression used in'a statute, an
enbiguity existe.

Peterson v, Hawaii Elec, Light Co. Inc., 85 Hawai‘ 322, 327-28,
944 P.26 1265, 1270-71 (1987), superseded on other grounds by HRS
§ 269-15.5 (Supp. 199:

 

 

 

(block quotation format, brackets,
citations, and quotation marks omitted).

In the event of ambiguity ina statute, “the meaning of
the ambiguous words may be sought by examining the context, with

Which the ambiguous words, phrai

 

8, and sentences may be

compared, in order to ascertain their true meaning.” Id.
(quoting HRS § 1-15(1) (1993)). Moreover, the courts may resort
to extrinsic aids in determining legislative intent, such as

  

legislative

 

story, or the reason and spirit of the law. See

 

HRS § 1-15(2) (19:

 

 
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D.  Defexence to Discretionary Decisions of Administrative
Agencies

Under HRS 91-14(g) (6), an administrative agency’s
determinations will not be disturbed unless “[a]rbitrary, or
capricious, or characterized, by abuse of discretion or clearly
unwarranted exercise of discretion.” Thus, before we can
determine whether an agency abused its discretion pursuant to HRS
$ 91-14 (g) (6), we must determine whether the agency determination
under review was the type of agency’ action within the boundaries
of the agency's delegated authority. To the extent that the
legislature has authorized an administrative agency to define the
paraneters of a particular statute, that agency's interpretation
should be accorded deference.

Thus, when reviewing an agency's determination, this
court has stated:

‘The standard of review for administrative agencies

Egneists of tho ports: first, an ansiysie ef whether
ing iegisiature enpowerea the agency with discretion to make
2 particular determination; ane second, if the agency's
Geterninacion wes Uke"resin of Giseretion, wether

gency abused that discretion (or whether the agency's
action wee ctherise “ernitrary, or capricious,
Characterized by, . (a) clearly onwerrent
Giscretion," URE & $3-161g)(6)]- If an agency Getermination
Senet within ite resin of secretion [ae defined by the
legislature), then the agency" s determination 1s net
entitied te the deferential “abuse of discretion” standard
ef review. If, hewever, the agency acts within ite reeim of
Giecretion, thin its deterainetion will not se everturned
unless the agency hae abused ite discretion.

Paul's Electrical Serva, inc, v, Eefitel, 104 Hawai'i 412, 417,

494, 499 (2004) (internal citation omitted).

 

 

      

   

 

 

    

 

 

 

 

 
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TIT. DISCUSSION

A. The Circuit Court pid Not Clearly Err in affirming the

BB's Determ: Eh ee

Sood Faith,

Del Monte argues that the HLRB’s determination that Del
Monte refused to bargain in good faith in viclation of HRS § 377-
6(4) was erroneous because the “totality” of its bargaining
conduct denonstrated good faith. Applying the clearly erroneous
standard of review, the circuit court affizmed the HLRB's
determination that Del Monte had violated HRS § 377-6(4),
deferring to that agency's expertise. As set forth below, we
agree with the circuit court’s conclusion.

HRS § 377-6(4) makes it sn unfair lsbor practice for an
employer “[t]o refuse to bargain collectively” with the

employees’ Union. Whether a perty failed to bargain in good

faith is @ mixed question of fact and lew, NLAB v, Reed & Prince
Mfg. Co., 208 F.2d 132, 134 (1st Cir. 1953); Bd. of Edue., 2

PERE 275, 285 (1972), as it consists of the application of the

jegal stendard under HRS § 377-6 (4) to the factual conduct of the

 
 
  

which governs collective
1c enployees within cticn, provides the
‘cellective ber which shece Ligne on the

  

    
   
 
 
 
   
  

ing by en employer and 2
na collective

he represent
pleyees ina mutually

 

Serity

 

 
 
 

Emphasis acces

 
 

FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER **?

parties. See Price, 77 Hawai'i at 172, 883 P.2d at 633 (defining
mixed questions of law and fact as conclusions of law that are
“dependent upon the facts and circumstances of the particular
case”).

‘The HLRB has adopted the following’standard to assess
whether an employer has met its statutory duty te bargain, drawn
from federal labor law principles regarding bargaining in “good
faith": “whether the totality of the lemployer’s] conduct
evinces a present intention to find a basis for agreement and a
sincere effort to reach @ conmon ground.” Bd. of Educ. (Decision
22), 6 NLRB 173, 177 (2001) (citing The Developing Labor Law: The
Board, The Courts, end the National Labor Relations Act 608
(Patrick Hardin et al. eds., 3d ed, 1992) [hereinafter The
Developing Labor Law (3d ed.}] (citing, inter alia, MLB v
Montoonery Ward § Co., 133 F.2d 676, 686 (9th Cir. 1943))). In
addition to this inquiry, which focuses on the totality of the
parties’ conduct, the HLRB also discusses certein “conditions
imposed upon bargaining which [are] ‘so onerous or unreasonable
as to indicate bad faith.’” (Citing Zhe Developing Labor Law (3¢

€G.), supra, at 596-97.) We do not pass on the propriety of the
 

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legal standard for HRS § 377-6(4) adopted by the HLRB, which in
any case has not been raised by the parties.”

Del Monte contends that the HLRB focused unduly on Del
Nonte’s June 21 letter in making its bad faith determination,
while ignoring the totality of its conduct which Del Nonte argues
demonstrates its intent to find a basis for agreement. , Del Monte
further argues that the June 21 letter was misinterpreted by the
MLRB, and should not form the basis of a bad faith determination.
In support of its argument, Del Monte cites mmerous actions it
undertook that it argues indicate @ good faith desire to reach an
agreenent, including attending al scheduled meetings, exchanging
Propesals, and reaching agreement on nunerous proposals. Del

Monte also defends its final offer issued in the June 21 letter

has contested the legel standare for goed faith
‘the eizeuit court cr in this appeal. On the cont
isputed that the test fer good faith
ity’ of the party's conduct Gencnstrates &
is for agreement,” which test the BLAB applied,
and cites approvingly pricr HERB cose law ciscuseing thet standerd.
in ny event, the sccption of this standerd 12 8 permiscitie
ne HERA by the HLURB, whore respensibiiity it is to
See WRE €°597-2 [258817 uns'€ 26-20 (2995).” Determining
Ses exhibited a “mutcaily genvine effort to reach an
tothe subject uncer negetiatien," HRS $3718) 5 is
’ (G-fest roles co net apply.” in this
J cuserve the "well estatiisned rule of statutory
en sorsniet is chargec with the
ryine ovt

Neither part
applied by the HLRE
Del Mente’ =

 

 
 

     

     

 

     

   

 

 

 

 

by ite netere eninge.
construction that, whi

 

         
 
 

FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER

es “hard-bargaining” undertaken in good faith, and as an effort
to promote rather than to thwart agreement.

In rebuttal, the Union reiterates much of the
evidentiary basis on which the HLRB relied to reach its
conclusion, and disputes Del Monte’s characterization of its
bargaining activity. In particular, the Union points to thé
HLRB’s determination that the final offer issued by Del Monte in
the June 21 letter was 2 “take-it-or-leave-it” proposition that
would empty out the HCFO bargaining unit if the Union did not
accept the offer, The Union also raises the fact that the RLRE
determined Del Monte’s defenses -- such as its claim that the
Proposed layoffs were necessary to meet transition deadlines and
that its final offer invited further negotiations -- to be
without merit. Lastly, the Union supplies various pieces of

evidence aimed at rebutting Del Monte’s cli

 

m that its prior
conduct reflected “such indicia of good faith” that a finding of
bad faith on the “totality of the circunstences” was not
warranted.

Ag steted above, whether an enployer has bargained in
goed faith presents @ mixed question of lew and fact reviewed
under the clearly erroneous standard. Even though there is

evidence in the record of discrete actions by Del Monte

 

 

Suggestive of good faith, the HLRE’e determination of the

 
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“eotality” ss not @ counting game of good and bad acts, and its
expertise in labor relations entitle the HLRB to judicial
deference in this area. See Gov't Employees Ins. Co. v. Hyman,
90 Hawas's 1, $, 975 P.2d 213, 215 (1999) (*{J]udicial deference
to agency expertise is 2 guiding precept where the interpretation
and application of broad or ambiguous statutory language. by an
administrative tribunal are the subject of review.”). More to
the point, and in harmony with the circuit court’s decision, the
scope of review under the clearly erroneous standard is limited
to (1) determining whether there is substantial evidence in the
record to support the ruling and (2) if there is such evidence,
Getermining whether the record nevertheless leaves the court with
the definite and firm conviction that @ mistake has been made.

In re Water Use Permit Applications, 94 Hawai'i at
431; see also Exotect Ala Wai Skyline v. Land Use and Controls

Comm, € Haw. App. 560, 547, 735 F.2d 950, 965 (1987) (*IT]he law

 

9 P3d at

does not require that all the evidence put before an
administrative agency must support the agency’s findings.”

(ci

 

ions omitted.)). “Substantiel evidence” is credible

evidence of sufficient qua

 

ue to enable a

 

y and probative v

 

Person of reaso:

Water Use Permit Applications, 94 Hawai'i at 119, 9 P.3d at 431.

The BLRE’s ruling «

ble caution to support a conclusion. In re

 

t Del Mente did not meet ite

 

barged

 

ng obligation mandated by HRS § 377-6(4) was supported by
 

)R PUBLICATION IN WEST'S HAWAI'] REPORTS AND PACIFIC REPORTER *

 

credible evidence in the record. Finding of Fact No. 19

discuss

 

Del Monte’s final offer which the HLRB found to be a
“take-it-or-leave-it” proposition that was “intended to empty out
the bargaining unit absent the Union's acceptance of the offer.”
The letter, which was received on June 21, 2003, gave the Union
until June 23 to accept the offer, or face the consequences’ on
July 1, 2003. The letter required the Union to withdraw the
unfair lebor practice complaints if it was to accept the
tentative agreenents offered in the first half of the letter.
Following rejection of that offer, negotiations were
discontinued." These elenents of Del Monte’s final offer, as
well as the context of the negotiations, are sufficient evidence
upon which the HLRE may have concluded that Del Monte did not
bargain in good faith.

The HLRB also found thet Del Monte’s actions were
“particularly insidious,” in thet they would allow the company to
create new positions which combined former HCFO work in the KFF
facility, meking it possible to employ qualified former HCFO
employees in similar positions “who would be stripped of
bargained for benefits or bargaining rights.” Lastly, the HLRB

rejected Del Monte’s

 

jerious defenses of its actions, finding

 
 

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that: (1) the proposed total layoffs were not an operational
Recessity; (2) Del Monte’s ostensible invitation of further
negotiations was of no use to the Union given the circumstances;
(3) the final offer “effectively ma(de] future bargaining
impossible” rather then presenting » “lawful alternative"; and
(4) Del Monte’s final offer “rendered illusory” the apparent good
faith of its prior bargaining conduct.

While Del Monte disputes these characterizations, it
has not shown then to be in clear ezror. On the contrary, the
RLRB'S uncontested findings of fact provide substantial evidence
that Del Monte did not bargain in good faith. Del Monte contests
in particular the weight that the HLRB placed on the “inal
offer” issued in Del Monte’s June 21 letter. However, the HLRB
may, within its expertise, determine that this letter was “so

onerous or unreasonable” as to tip the scales towards a bad faith

   

Getermination, despite the employers other bergaining conduct
‘This determination is not clearly erroneous, and this court is

not in the pos

 

ion to second-guess the agency’s close reading of

the complex relationship between Del Monte and the ILNU local.

Sse Dole Hawai'i Division-Castle § Cooke, Inc, vs Ramil, 71 Haw.

419, 424, 794 P.26 1115, 1118 (1990) (*(T]he court should not

   

As neted, the BLRE
ficta cf geod feith

rendered “ilueery

 

 

 
1+ FOR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER ***

substitute its own judgment for that of the agency.” (Citation

omitted.)).

 

Del Monte argues that the HLRB’s determination that Del
Monte violated both HRS $$ 377-6(1) and (3) was an exror.of law
and/or clearly erronecus because its final offer in the June 21
letter was not “inherently destructive” conduct. Specifically
Del Monte argues that its conduct was not “inherently
destructive” because it (1) did not have @ visible and continuing
impact and (2) had a legitimate and short-term goal of expediting
agreenent.* However, the circuit court affirmed the HLRB’s
determination that Del Monte had violated HRS §§ 377-6(1) and
(3), applying the clearly erroneous stendard of review and
deferring to the agéncy’s expertise. As set forth below, we
agree with the circuit court's conclusion with respect to the HRS
§ 377-6(1) charge but disagree with its conclusions regarding the

HRS § 377-6(3) charge.

# an ite brief, Del Monte fecuses on the requirenente fer “inherently
ervctive” conduct ite the “inheren eructive™ Lebel hi

 

 

 
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1, The HERB’ s Determination that Del Monte Violated HRS §

377-6(3) Through “Inherently Destructive” Acts Was an

Error of Law Because Del Monte Did Not “discriminat[e]

in regard to hiring, tenure, or other terms or

conditions of employment.”

The HLRB concluded that Del Monte’s conduct was
“inherently destructive” of employee rights, in violation of HRS
§ 377-6(3), focusing on the company’s final offer contained in
the dune 21 letter. The HLRE described the violation as Del
Monte’s “discriminatory act of threatening to terminate all
members of the HCFO bargaining unit and eliminate their
positions," which it categorized as “inherently destructive.”

Under HRS § 377-6(3), it is an unfair labor practice

for an employer “(t]o encourage or discourage menbership in any

 

labor organization by discriminetion in regard to hiring, tenure,
er other terms or conditions of employment.” In determining

whether employer conduct is discriminatory in vielation of HRS §

   

RB has followed National Labor Relations Board

sorated 26 fclloxe:
rected agesnst el bargaining unit members. At

fer the eepleyees no the B

ne subsequently decides to

  
    
  
  
  
  

   
  

  

threat wee # result of
cine the exercise of

 

 

26 (1867), the united
duct that adver
ye" or "comparatively

et ef inportent
Untisuces evidence that

     

 

ably be oe
eeployee rights, no p

 

 

 
‘FOR PUBLICATION IN WEST'S HAWAI REPORTS AND PACIFIC REPORTER ***

(WLRE) and United States Supreme Court interpretation of
analogous federal labor lew. See International Longshore and
Warehouse Union, Local 142, 6 HLRB 194, 198 (2001) (citing Great
Dane Trailers, Inc., 388 U.S. 26). The key element of Section
377-6(3) is “discrimination” by the employer. As the NLRB has
put it, “[4Jn the law of labor relations, the term
‘discrimination’ most often refers to inequality of treatment
based upon discriminatory employment practices on the part of
employers to discourage employees’ organizational activities for
collective-bargaining purposes.” Walnut Creek Hosp., 208
N.L.R.B. 656 (1974). Employment practices that discriminate in
this fashion usually take the form of discharge, refusal to hire,
or lesser forms of discipline." Therefore, it is clear that
Interpreting substantially eimiler provision of federal law —~
Liter elet ote “act tea) Section 64113) —“"she United states

ie not enbiguous. The unfair labor
@ 1s for an employer to encourage of discourage nexbership

Of discrimination. Thos thie section dees not cutlaw al
‘genent oF aiscourecenent of mesbership in iaber

 

  
  

 

  

 

Srgentations: only ss déserininstio
Eechibited.
, 347 9.8. 17,

 

43 (1954) lenphacaé adcec) We fs with respect to
RS § @9-12(8) (3), which if nearly identicel te HRE § 377-6(3) but governs
public rather then private sector leper relatiens. See Hawsil ©

se! " i ations Ea., €0 Hew 360, $90 F.2d 985,
S8e (175) (concluaing that *[elniy interference with e lavtul employee
activity, of ciscriminetion lovee evercise of = provectes

 

     

 

   

      

Fight, may Be

 

   

 

leber lay in te “epecitic
nation” section, has a ciscussicn
‘expleyment action that
Bscipline fer Union
ky Repiacenent and
‘eone inved

 

 

  

 
 

 

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—EDRPUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER *¢* _

“discrimination” requires some employment action or practice that
is beyond mere threat or bargaining proposal.

Because the HLRB has not identified any employment
ection by Del Monte that may qualify as “discrimination,” its
conclusion that the company violated HRS § 377-6(3) is erroneous.
Winile an administrative agency's interpretation and application
of @ broad or ambiguous statute is generally entitled to
deference, see Gov't Emplovees Ins. Co., 90 Hawai'i at 5, 975
P.2d at 215, this court will not hesitate to reject an incorrect
cr unreasonable statutory construction advanced by the agency
entrusted with the statute's implementation. In re Wi
Permit Applications, 94 Hawai'i st 145, 9 P.3d at 457.

Del Monte’s conduct of putting forward a threatening
bargaining proposal, while found to violate its duty to bargain
in good faith, did not effect any change in the terms or

conditions of the Union members’ employment, nor involve any

 

Gischarce or feilure to hire Union members.‘ As such, the

   
   

fst Unien or
er Sex"; ane Sion’ Eaeed on Terns of
signet tener SRG 2-17 (Fetrack Herasn et aL

fer The bevesccine Labor lax (ath ed.1}- The
he question ef unether the enpleyer in fact
Ghanges the enployee's tenure cr tere cr conditicnt of enpicyeent is rarely
Af'ever disputed.” 1a. at 25960,

    
 

collective Barcesn

 

 

   

deter ections ky Del Monte that
Union enplcyees coule give rise to 8

recultes in the ciscnarge cf nosere

    

 
‘OR PUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER,

   

conduct did not “discriminate,” as no employees were treated)
differently than any others with respect to their employment
conditions. Rather, Del Monte’s conduct was limited to the realm
of bargaining and did not affect terms of employment. While its
result may have been to discourage unionism, it did not reach
this result by discrimination as to hiring, firing, or the
conditions of employment. .

Under these circumstances, the HLRB has applied an

erroneous definition of “discrimination” to which this court need

 

not defer. For this reason, we hold that the HLRB erred in its
determination that Del Monte violated HRS § 377-6(3).

2. The HLRB’s Determination that Del Monte Violated ERS §
377-6(1) Was Not Clearly Erroneous.

HRS § 377-6(1) provides that it is an unfair labor
practice for an employer “(to interfere with, restrain, or
coerce the enployer"s employees in the exercise of the rights
guaranteed in section 377-4." In assessing whether such

®(...continued}
véclation éf mhe § 277-663), tha
are tne

 
 
     
    
 
 
  

woe net presented to the HLAB or the

circuit court t Stands befere this court en appeal.

   

   

able clein of ciserininatii
RB ond thie court, In see
jon of Fact and Law te the HIRE,
softer to support ite

 

 

complaint cr subsequent briefs te the
Unease

the Unien fecvees
ruling!

 

 

   

27-8

  
 

provides

 
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—EORUBLICATION IN WEST'S HAWAI'I REPORTS AND PACIFIC REPORTER °° _

interference has taken place, the HLRB asks “whether the conduct

 

in question had a reasonable tendency in the totality of the
circumstances to intimidate.” United Food and Comercial workers
Union, « HLAB £10, £17 (2988) (quoting Corie Comm,, 375 F. 2d at
153). Whether the enployer “interfereid]” with employees"
exercise of their rights presents @ mixed question of fact and
law to be reviewed under the clearly erroneous standard. See
Brice, 77 Hawai" at 172, 683 P.2d at 633 (defining mixed
questions of law and fact as conclusions of law that are
“dependent upon the facts and circumstances of the particular
case").

‘The HLURB concluded thet Del Honte’s conduct, as
expressed in the June 21 offer, was threatening to employee
Fights. The letter offered tuo scenarios, one of which required
that the Union withdraw its unfeir labor practice charge as a
condition of agreenent, the other of which involved layoff
without any benefits beyond those already in the collective
bargeining agreement. The Union was given three days’ notice
before Del Monte would inplenent the total leyoff. vitinately,

fourteen HCFO employees were trensferred to Ki

 

8. With respect

   

ith activstier

 
*** FOR PUBLICATION IN WEST'S HAWAI REPORTS AND PACIFIC REPORTER **

to the final offer, the HLRE found that, “{aJt least for the’
employees who the Employer had previously intended, and
subsequently decided to retain, the threat was a result of their
participation in the bargaining unit and exercise of rights via
their exclusive representative.” Based on the evidence
Presented, the HLRB’s determination that Del Monte’s conduct had
a reasonable tendency to intimidate employees, in violation of
HRS § 377-6(1), was not clearly erreneous.**

C. The Remedy Granted b L

77=91d) Nay
ary fom a for Unk:

Exactices.

Del Monte argues that the HLRB exceeded its statutory
authority and was in error with respect to its proposed remedy
that “all HCFO members laid off as a result of the closing of the

Waiakamilo facility shall be awarded enhanced severance benefits

 

eanilar vein, the UF its answering brief to this court,

asserts that Del Wente’s finsi offe a message to the remaining employees

Sh the HCPC ang the two other bar unite that further negotiations were

futile. Furtherncre, the Union subnite, “the final ultimatum. . « would have
tn the foture to engage sn

       

 

 

 

agverse impact on [enployees’) willingre:
Concerted ectivity.”

(clusion thet Del Monte
Gp ste etermsnstsen that Del
ea employee right

Lec have based ste «
eed employee £3gh
In gees fateh, wh:

(CEnployees:

 
  
   
 
 

  
 
 
      
 
  
 
 

ine analogous

   

 

Wonder fece 2 ser =
Provision, MURA § €(a) (11; 29 U.8-C. § (2000) can be found
incther nisiz leecr prectice set Seen conmsttec. See The Develepize

   

iabagchaa 160 cos), aug 9002 PIA vie

 
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identified in previous negotiations or the cash value thereof
Del Monte’s principal argument is that the HLRB, because of
Limits in its statutory authority to craft remedial orders, may
Rot impose substantive terms of collective bargaining upon the
Parties, based on United States Supreme Court decisions Limiting
the remedial powers of the NIRB. With less emphasis, Del Monte

appears to

 

que in the alternative thet even if the HLRB had the
authority to grant the enhanced severance benefits remedy, it was
not justified in doing so. The circuit court ruled that the HLRB
had not erred as a matter of law in granting the enhanced
severance benefits renedy. For the reasons discussed below, we
agree.

1. As a Matter of Law, the Enhanced Severance Benefits
Remedy Did Not Exceed the HIRB’s Statutory Authority.

 

‘The Staci fords the HLRB Diser sa

 

In order to determine if the severance remedy granted

by the HIRB in this case was in violation of law, we must

 

determine the outer bounds of the authority of the HLRB to order
remedies for unfair lebor practice violations.

The extent of the HLRE’s remedi

 

powers authorized by
statute is 2 question of first impression for this court. In
order to determine whether the HLRB’s crder wes within its

authority, me must interpret the statute. The proper
   

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HAWAT' REPORTS AND PACIFIC REPORTER

interpretation of a statute is “a question of law reviewable’ de
nove.” Levi, 102 Hawai'i at 285, 75 P.3d at 1176 (quoting Arceo,
84 Hawai'i at 10, 928 P.2d at 852).

As in all statutory analysis, we begin with the
statutory text. ‘The imposition of remedies by the HLRB under the
HERA is governed by HRS § 377-9(d), which discusses how the “HLRB
disposes of a case after the final hearing.” With respect to
final orders, that section says the following:

Final orders may dismiss the complaint or require the person
complained of to cease and desist from the onfair labor
practices found to have been committed, suspend che person's
Fights, intunities, privileges, or remedies granted or
afforded by this chapter for net more than one yeat, and

Hegulve the person to take such affiemstive action,
he beard nav deen proses, Any order may farther requis

the person to make reports from time to time showing the
extent to which the persen has conpiied wth the order.

 

HRS § 377-9(d) (1993) (emphasis added).
At issue in this case is what limits exist on the
NLRB's power to grant orders requiring “affirmative action.” The
relevant provision states that the final order “may . . . require
the person te take such affirmative action, including
reinstatenent of employees with or without pay, as the board may
deem proper.” Id. (emphasis

 

idea) .

 

fe cninietrstor of the #

Beard et

 
 

 

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In interpreting the meaning of this provision, we focus
first on the language itself and give effect to that language if
it is plain and unambiguous. See Peterson, 85 Hawai'i at 327-38,
944 P.24 at 1270-71, Focusing on the relevant provision above,

the statute presents no ambiguity. The provision, on its fac

 

grants discretion to the agency in determining the types of
actions it will require of employers who have committed unfair
labor practices. The words “as the board may deen proper” make
this exceedingly clear. See State v. Kahawai, 103 Hawai'i 462,
465, 83 F.3d 725, 728 (2004) (“The term ‘may’ is generally
construed to render optional, permissive, or discretionary the
Provision in which it is embodied? this is so at least when
there is nothing in the wording, sense, or policy of the
Provision denanding an unusual interpretation.” (Quoting State
ex rel. City of nil Bernard, 372 N.E.24 338, 342 (ohio
1978).)). The clause specifying reinstatement “with or without
Pay” as possible actions that could be brought upon a violating
employer does not restrict the discretion of the HLRB in crafting
“affirmative action[s],” because thet clause is explicitly
illustrative rather then exclusive in nature, as nade clear by

the word “including”. See In re Waikoloa Sanitary Sewer Cou,

Ince, 102 Hawai'i 263, 128 P.3d 484 (2006) ("[T]he term

     

neludir on, but connotes

 

is not one of ali-enbracing de:
 

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simply an illustrative application of the general principle.”
(Quoting Zed. Land Gank of St. Poul v, Bismarck Lumber Co., 314
US. 95, 99-200 (1941).)). Therefore, the clear text shows that
the Hawai'i legislature enpowered the HLRB with discretion to
determine appropriate remedies for the commission of unfair labor
practices." See Paul's Electrical Serv., 104 Hawai'i at 417, 91
P.3d at 499 (stating that, when this court reviews adninistrative
agency determinations, the first step is “an analysis of whether
the legislature empowered the agency with discretion to make a

particular determination").

 

b. stor!
\dicially Constructed Lim: the Remedial

Authority of the NLRA Inepplicable to the HLRB.

Del Monte argues that the HLRB’s authority to grant

remedies should be limited by the 1970 United States Supreme
Court case Hk. Porter Cou, Inc, v. NLRB, 397 U.S. 98 (1970),

which held that the NLRB lacked authority to compel a party to

 
  

wry is unnecessary where a
7-28, 344 P.2a at 1270-

 
 

 

stetute'e nesning i P:
51, the legislative he ne opposing construction.
The legislative nistery of the HERA gives little elucigstion of the intention
of the legislature. One positive statenent, inva report. fren the Hawai!
House sudicisry Coanittee recommending pacséce cf the £111 te the Senste,
Provides that: “the purpose of this bill ie to procere che peacefor
Settlenent ef cieputes anoustry." Hse. stone. Comm. Rep.
No. S16, in 1965 House Jot This cf purpore ia in the
neture cf e general ebsect ally neanirofel in another
context, theo: tenent provices iittie guidance to the issue at hand
$i, 29 U..€, $181 12000) (includes an

5, fuch es the ein to

senely adsvernent of 2

     

  

  
  
   

 

 

 

    
   
      
 

 
 

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make a bargaining concession or to agree to @ proposal. Del
Monte also points to legislative history of the NLRA which
Suggests limitations on the types of remedies permitted.”
However, due to pertinent differences in the language, structure,
and history of the HERA and the NLRA, these authorities cannot
dictate the development of Hawai'i law and Del Monte’s arguments
are inapposite.

Textually, the two statutes contain significant
variations in the language used to describe the affirmative
remedies that may be ordered by the respective labor boards. As
Giscussed, the HERA specifies that the HLAB may issue final

orders which “require the person to take such affirmative action

 

++ asthe board mi roper.” HRS § 377-9(d) (emphasis

scded). In contrast, the parallel provision in the NLRA states

   

that the NLRB, when it finds thet the Act hae been violated, may
issue an order requiring the employer “to take such affirmative
action including reinstatement of employees with or without back
pey, as tectuat 2 ia os an

U.S.C. § 160(c) (2000) (emphasis added). The differing language

 

Conmittee Gn Eavcetion ane 2

 
  
 
 
  
 
 

peteage cf the MLR, ‘that st
inpression thet this bill se oeedgned te
he ma : rentel supervision ef their
(Citing Wik. Fortes, (queting . Rep. No, 74-573, at
cry ef the NIRA cennct be
aint eg:

 

 

     
   

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in these two provisions indicates the different remedial schemes
fon which they are based. While the NLRA provision places a
Limiting condition on the affirmative action the NLRE can take
(Tas will effectuate the policies of this subchapter”), the HERA
more clearly leaves the crafting of affirmative remedies to the
discretion of the board ("as the board may deem proper”). The
lack of @ policy section in the HERA further makes clear that the
statutory language of the NLRA in 29 U.S.C. § 160(c) ("as will
effectuate the policies of this subchapter") cannot be read to
apply to the parallel provision in the HERA, end that, as a
result, judicial interpretations of the NLRA section should not
be used to guide interpretation of BRS § 377-9(d). See HK.

Porter, 397 U.S. at 108 ("The Board’s remedial powers under § 10

of the Act are broad, but they are limited to carrvine out the
olicies of t itself.” (Emphasis added. ))

‘The structure of the two laws also differs in

significant ways wi

 

ch suggest that the HERA wes intended to

rent more discretion to its board than under the federal labor

 
 
  
  
    
  

used fecerel prececent on occasion in the
ich of state lebor ond enploynent lowe, gee,

‘960 F.2d i180, 1156
otson of poBlse
elely to,
ry language is the

 

   

employment lowe under HRS
Sntereretetson ano enly ae
Exzance, re Honass

incerprecing’eieiias piewielens:? tea

 

 

    
  
 
 

    

 
 

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Jaw. The NLRA begins with an extensive section entitled
“Findings and declarations of policy,” which has been used by
Courts and the NLRB to guide its interpretation of the federal
Ret. As noted, the HERA lacks such a policy section to guide the
HERB in ite adninistration of the act. Compare 29 U.S.C. § 151
(2000) ("Findings and declarations of policy”) with HRS §,377-1 to
~15. Secondly, the HERA lacks @ section equivalent to NLRA §
€(d), 28 U.S.C. § 158(d) (2000), upon which the United states
Supreme Court relied extensively in H.K. Porter to conclude thet
the NLRB lacked power to compel a bargaining term, in that case a
dues check-off provision. 387 U.S. at 107-08. NLRA § 8(d)
explicitly states that the collective bargaining obligation “does

ot compel either party to agree to a proposal or require the

 

making of @ concession." 29 U.S.C. § 158(d). These structu

   

differences reinforce the different natures of the remedial

suthority granted to the respective boards, and the

The nearest equivelent to this section in the HERA cones in the
Setinition ee. Sees not explicitly or implicstly limit the remedies
the HAD ray

“collective bargeins

        
 

" as the negotiating by an employer and a

exployeee in e collective bergaining
representatives) concerning representation oF Corns
of engleysent ef such employees ine mtvelly

to reach en greenent with reference ce the subject

    
    

 

 

 

the HERA cees
het by steelf sean
Sonped pertics to agree tc specific preporsis er te make apes
5 thet the

et 2 provieion equivalent te NRA
the HIRE hee the affirmative power te

 

 

     
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inepplicability of the H.K. Porter decision to Hawai'i state”

daw.

‘Therefore, based on the plain meaning of the HERA, it
is clear that the legislature has granted discretion to the HLRB
in crafting remedial orders when an employer has committed an
unfair labor practice. Thus, to determine whether the HLRB”
remedy was proper, we must determine whether the agency abused

its discretion.

* the structural differences between the HERA and the NERA are also
confirmed by their aifferent crigane! the template used to write the HERA was
a 'Wiscensin state lau, tne Miecensin Employment Peace ct, codified at Wis.
Stet. $5 111.01-.19 (2006), Wisconsin sas one of the first states to pass =
state labor relaticns law in 1987, later smendes in 193. See Joseph A.
Renney, The Rise of Labor 4 Wisconsin's “Little New Deal, is. Lew., Moy
10995, at 16, The Havel legislature, im 1945, consulted the Wisconsin law in
Grafting the HERA, 195 Haw. Sese. L. Act 250, §§ 1-20 at 108-17. Seq Sen.
Com, Whole Rep. No. 13, in 1948 senate Journal, at £30 (reporting on March 22,
185 hearing of the connittee, where subcem: speinted fo "go over
the bill... «end redraft it elong the lines of the Wisccnesn bil1"). The
sintlai in'the two lawe make clesr that the Hawai'i lew was dvaun from
the eariler-paceed Ricconesn set, rather than the NOAA. Comsaze HRS § 377~
516). ("Final orders nay disries the conplesnt or require the person complained
of te ceace ang seesst from the onfesr laber practices found to have been
Committed, suspend she person's Fights, immunities, privileges, oF renedies
grantee of of! er for net nore nd require
the person te,

enpleyees with er

       

 

 

 

     

 

 

  
  

 

    
       
 
 
 
  

   
 
  
 

 

to have been committed, suspend the per
Fenedies grantes cr affordes by thie subchapter f
quire the person to mative set

nent ef erpioyese with of wethest Poy oe sich deen
Pitier run threughe She cifferent

text and history ef the NIRA end the HERA sake Clear that Judicial

   

     
 

   

 

 
 

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‘The HLRB Did Not Abuse its Discretion by Ordering the
Enhanced Severance Benefits Remedy.

 

Having found that the legislature empowered the HLRB
with discretion in ordering affirmative renedies, we must
determine whether the HLRE’s renedy in this case, granting
enhanced severance benefits to laid-off HCFO enployees, vas an
abuse of that discretion.” See Baul’s Electrical Servs, 104
Hawai'i ot 417, 91 P.3d at 499.

As this court has discussed, discretion “is a flexible

 

 

   
   
  

   

 

 

concept”:
A strong showing is required te establish an abuse,
ang each cose must be decided on its own fecten Se
most commonly repeated definition was first erticuiated ie
. (748 Haw. 266, 292, 367 Be2d 11, 23 (1961)
(Glenerally, to'constivute an abuse it must oppear thet the
court clearly exceeded the bounds ef 1
substantia!
son ie
ieference
rerelly give to disereticnary decisions,
the high burden of arbitrariness er coprice
pellent must meet to overcene that deference.
aul’s Electrics] Serv., 104 Hawai'i at 419, 91 F.3d at 501

(queting Michael 3. Yoshii, appellate

Stenderds of Review in Hawsii, 7 U. Haw. L. Rev. 273, 292-93

(2985)).

 

 

% Because the challenged agency
iter ceternin,

on here wes the renegy it issued
conrittes an unf or practice, it
seein of glette ‘See Basle

      

 
 
 

   

 
 

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hat constitutes an abuse of discretion in the context
of an HLRB renedy has not been addressed previously by this
court. Rather than creating @ general rule to be applied across
the board, it suffices to say that the HLRB's remedy in this case

was not an abuse of its discretion.

 

The challenged remedy in this case, of granting
enhanced severance benefits that had been tentatively agreed to
in prior bargaining, arises in a special and limited context:
effects bargaining pending the closing of operations of the HCFO
facility and the layoff of the majority of its employees. The
closing of a plant and concomitant elimination of the attached
bargaining unit constitutes the end of the collective bargaining
relationship for the employees to be laid off. These
circumstances irrevocably alter the balance of bargaining power

between the parties, and the possibility of resolution through

 

negotiations may erode further with the passage of tine. For

this reason, effects bargaining stands spart from routine
negotiations between enployer and lebor union for @ new
collective bargaining agreement. As such, the HLRE’s substantive
renedy does not supply the terms of an cngoing collective
bargaining relationship ~~ rather, it is in the nature of a one-

time payout calculated to remedy the unfeir labor practice that

the HLRE found Del Monte

 

committed. In these circumstances,

jonsble or in disregard of

 

the HLRE’s renecy is not unrea:
 

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Principles of law, and will therefore not be overturned as an

That order, including the challenged remedy of enhanced severance

® Even acting under the NLRA -- which, as discussed supza in section
by does not govern the HLNB's remedial powers == the NERD has allowed
2" renedy in the case of plant clocures. See, gg, Stevens Fomiae.

4 298 NuLiR.B. £09 (1989) (lesuing a bargaining Sider as eet eee
Tisitea Bockpay requirenent designea to make whole the enpicyees for losses
sustained asa result of the violation, and To recreate in seme: practicasie
manner a situation in which the parties’ bargaining positions are not entirely
devoid of eccnenic consequences for the (cexpanyi,” where the exployer
wolawfuily refused to bargain abeut the effects cf sts decision fo close &
fecslity) (emphasis acded). In such circumstances, the LAE applies « remedy
fret adopted in Tansmarine Comg., 170 N.1-R-B. 365 (2966), ordering the
enployer

 

utc.
a speci

 

  

 

 

8 with the Union, upen request, about the effects on its
3] of the (cempeny] shutaawn, and co pay these employees:
amounts at the rate of thelr normal mages when lest in the’
Respondent's enpley from S cays after the Gate of this
Suppienentel Oecisicn until the occurrence of the eariiest of the
following conditions: (1) the date the Respendent Sergeins for
agreement with the Union cn these eutsecte perteining to the
effects of the cloting « «si 12) a bene fide inpesse in
Bargaining: 3) the failure ef the Unien te request bergeining
within © days of this Supplenental Decision, or te commence
negotiations within © Gaye ef the Respondent's notice ef its
desire to bargain with the Union; of ié) the subsequent failure of
the Union te Eargein in gcod faith; but in no event shell the sum
Peid to eny of these enpicyees exceed the amount re mevid have
cerned as wager [fron the dete of cloeure te the tine the employe
secured equivelent enployzent or the cate the enplcyer cffers te
Ebreesn) rewever, that

   

   

   

 

 

 

 

   

      

        

 

 

 

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benefits,” is in the nature of a remedy for Del Monte’s
violation of its bargaining duty rather than a remedy for a
discrimination claim.” First of all, the HLRB opinion and
decision were primarily focused on the bargaining claim."
Furthermore, because the HLRB crafted its remedial order to deal
specifically with the effects of the closing of the Waiakamilo
facility, and incorporated in that remedy terms that were
tentatively agreed to by the parties, it is clear that the HIRB's
order was primarily intended to remedy Del Monte’s failure to
meet its bargaining obligation. Thus, as the HIRB’s remedial
order was directed towards Del Monte’s refusal to bargain in good
faith and not on its finding of discrimination under HRS § 377-

6(3), there is no reason to alter the HLRB’s proposed remedy.

   

% The other parte of the renedial order, not challenged by Del Monte,
also include the retention of senlorsty and behefite for HCFC merbers who are
hired cr transferre to the Kunis facility, the creation of a new permanent
position within the effectes bergaining unit fer any equivelent ACEO Job Being
performed by KFF cr Plantation employees, end renting e right of first
Fefusal to qualities dicplaced HcFO enpicyees for current vacancies at Del
Monte, a list of which Gel Monte must provice te the Unien

 

 

 

 

 

 

% the typical renedy for discrimination claim is backpay and

yeinstotenent under MIRA la4. See The Develoeine Labor tay (4th ed-), Supra,
at 2521-22, The HLRB' s renedial orer Goes net Feguire el Monte to pay

Backpay or ‘reinstate any employees

 

 

 

 

 

“ Moreover, to the extent thet the HLAE incorrectly opplied the law

with respect to the discrimination cles prcposes renecy wee not meant to
Fenedy e genuinely ciscriminatery ect. the HLRE misepplies the law by

het the threatening fin

Becaure st thecry of the vscisesen wer

9 efter, ite renecy cen alec Be od 88 a

hcther worce, the proposes

ate tse effects Of discrimination,

ee ren onfeir labor

 

 

 

   
   
 
 

 

 

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Therefore, and in light of the broad authority of the HLRB to
remedy unfair labor practices, the original remedy may stand.
aw. usr
Based on the foregoing, we affirm in part and reverse

in part the circuit court’s April 1, 2005 final judgment.

on the briefs:

Barry W. Marr

and Christopher S. Yeh

(of Marr Hipp Jones & Wang) .
for appellants-appellants BP terince—
Del Monte Fresh Produce

(Heweis), Inc., Edward C.

Littleton, stacie Sesageua, Rss 1, cea aeith

Gordon Rezentes, and

Dixen suzuki
Yorn €, Deibas the

Herbert Takahashi

and Rebecca L. Covert

(of Tekahashi, Masui,

Vesconcelios § Covert)

for Union-appellee=

appellee International

Longshore and Warehouse

Union Local 142, AFL-CIO

On the record:

Velri Lei Kunimeto
for appellees-appellees
Haweii Labor Relations Board;
Brian K. Nakanure, Chairperson
Chester C. Kunitake, Eoerd
Member; and Kethleen Racuye-
Markrich, Board Member