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IN THE SUPREME COURT OF THE STATE OF HAWAIʻI

---o0o---

In the Matter of the Grievance Arbitration Between

STATE OF HAWAII ORGANIZATION OF POLICE OFFICERS (SHOPO),

exclusive representative for Bargaining Unit 12, Police,

on behalf of SHELLY L. RODRIGUES, JAMES A. RODRIGUEZ,

and SHANE Y. SOKEI,

Respondents/Grievants-Appellants,

and

COUNTY OF KAUAʻI and KAUAʻI POLICE DEPARTMENT,

Petitioners/Employers-Appellees.

SCWC-10-0000077

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS

(CAAP-10-0000077; S.P. NO. 09-1-0031)

June 29, 2015

RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON JJ.

OPINION OF THE COURT BY POLLACK, J.

The County of Kauaʻi and Kauaʻi Police Department (the 

Employer) filled five police sergeant positions in 2007 through 

internal promotions. The State of Hawaii Organization of Police 

Officers (SHOPO) challenged the non-promotions of three police 

Electronically Filed

Supreme Court

SCWC-10-0000077

29-JUN-2015

08:03 AM
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2

officers through the grievance procedures of the collective 

bargaining agreement governing the parties. When the parties 

were unable to resolve the grievances, the matter was submitted 

to arbitration for final determination. After finding that the 

promotions were subjective, arbitrary, and capricious in 

violation of the collective bargaining agreement, the arbitrator 

awarded the three officers promotions and back pay. The Circuit 

Court of the Fifth Circuit (circuit court) found that it was 

beyond the scope of the arbitrator’s authority to award 

promotions and vacated the arbitrator’s remedy.1

 The principal

issue before this court is whether it was proper for the circuit 

court to vacate the arbitrator’s remedy. 

I. BACKGROUND

In May 2007, the Employer notified SHOPO that it would 

fill five police sergeant positions from the existing 

promotional eligible list, which was based on the results of 

written examinations. The acting chief of police decided to add 

an oral interview to the promotional process. An examination

panel was assembled, and the interviews were conducted in August 

2007. Five candidates were selected to the police sergeant

positions, and following the appointments, three of the 

 1 SHOPO appealed the decision of the circuit court to the 

Intermediate Court of Appeals (ICA), and the ICA vacated the circuit court’s 

decision. 
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unsuccessful candidates filed grievances alleging violations of 

the collective bargaining agreement. 

The grievances were brought under the collective 

bargaining agreement that pertains to the employment of state 

and county police officers (agreement).2 The agreement is 

between SHOPO--the exclusive representative for public employees 

in the police officers unit--and the State of Hawaiʻi, City and 

County of Honolulu, County of Hawaiʻi, County of Maui, and County 

of Kauaʻi. The agreement includes a four-step grievance 

procedure that provides for the final settlement of unresolved 

grievances through “final and binding” arbitration.3 

The four-step grievance procedure is set out in 

Article 32, which provides for arbitration as the final step and 

restricts review of the decision on appeal: “The award of the 

Arbitrator shall be accepted as final and binding. There shall 

be no appeal from the Arbitrator’s decision by either party, if 

such decision is within the scope of the Arbitrator’s authority 

as described below . . . .” Article 32 includes a limitation on 

the arbitrator’s authority: “The Arbitrator shall not have the 

 2 The parties agreed that Articles 1, 14, 32, 35, and 47 were 

substantially the same between the contract that was in effect July 2003 

through June 2007 and the contract in effect from July 2007 through June 

2011. All quotations from the agreement in this opinion are from the 

agreement effective July 2007. 

3 Article 32 provides for the grievance procedure to govern the 

parties under the agreement; it includes provisions regarding the selection 

of an arbitrator, the arbitrator’s jurisdiction, a pre-hearing, discovery, 

and the arbitration award.
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power to add to, subtract from, disregard, alter, or modify any 

of the terms of this Agreement.” Article 32 also sets forth the 

arbitrator’s authority: 

The Arbitrator’s authority shall be to decide whether the 

Employer has violated, misinterpreted or misapplied any of 

the terms of this Agreement and in the case of any action 

which the Arbitrator finds unfair, unjust, improper or 

excessive on the part of the Employer, such action may be 

set aside, reduced or otherwise changed by the Arbitrator. 

The Arbitrator may, in the Arbitrator’s discretion, award 

back pay to recompense in whole or in part, the employee 

for any salary or financial benefits lost, and return to 

the employee such other rights, benefits, and privileges or 

portions thereof as may have been lost or suffered.

Article 47 of the agreement specifically addresses 

promotions: “Promotions shall be based upon fair standards of 

merit and ability, consistent with applicable civil service 

statutes, rules and regulations and procedures.” The “Rights of 

the Employer” are provided for in Article 11; it includes a 

single section titled “Management Rights” that provides, “The 

Employer reserves and retains, solely and exclusively, all 

management rights and authority, including the rights set forth 

in Section 89-9(d)(1)-(8), Hawaii Revised Statutes, except as 

specifically abridged or modified by this Agreement.”4

 

 4 HRS § 89-9(d) (Supp. 2007) prohibits agreement to a provision 

that “would interfere with the rights and obligations of a public employer 

to” do certain listed functions including the right to “[h]ire, promote, 

transfer, assign, and retain employees in positions.” Notwithstanding HRS § 

89-9(d)’s prohibition of agreements that interfere with certain management 

rights, it also provides the following: 

This subsection shall not be used to invalidate provisions 

of collective bargaining agreements in effect on and after 

June 30, 2007, and shall not preclude negotiations over the 

procedures and criteria on promotions . . . .

(continued . . .)
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The grievances of the three police officers asserted

violations of the collective bargaining agreement. The 

grievants contended that the promotional process used by the 

Employer was subjective, arbitrary, and capricious. Each 

grievance statement stated the following under the heading 

“remedy sought”: “That the employer promote the Grievant to 

Police Sergeant on the effective date of promotion and be made 

whole.” 

The parties were not able to settle the grievances 

through the first three steps of the grievance procedures before 

the Employer, and in May 2008, SHOPO sent the Employer a Notice 

of Intent to Arbitrate on behalf of each grievant. Larry L. 

Cundiff, Sr. was selected as the sole arbitrator for 

determination of the three grievances (arbitrator). A 

consolidated arbitration hearing on the grievances was held 

before the arbitrator for three days in January 2009.

At the beginning of the hearing, the arbitrator 

stated, “Both parties have agreed that this matter is properly 

before the arbitrator.” After a brief discussion with both 

attorneys off the record, the arbitrator stated that the parties 

previously agreed that SHOPO had the right to challenge “the way 

 

(continued . . .)

Violations of the procedures and criteria so negotiated may 

be subject to the grievance procedure in the collective 

bargaining agreement. 

HRS § 89-9(d).
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that the promotions were done; however, they do not challenge 

the [Employer’s] right to make the promotions.” During the 

hearing, a total of seventy-five exhibits were admitted into 

evidence, and eight witnesses testified. Testimony indicated 

that there were three to five vacant sergeant positions at that 

time.

In the arbitrator’s June 2, 2009 decision, the 

arbitrator found that the matter was properly before the 

arbitrator and that the arbitrator had jurisdiction over the 

grievances.5

 The arbitrator’s decision provided an overview of 

the testimony presented regarding the three officers’ work 

history and qualifications. The arbitrator found that the 

grievants were denied promotions “due to subjective, arbitrary 

and capricious promotional practices.” The arbitrator awarded 

the grievants promotions to sergeant positions, back pay, and 

“any additional rights, benefits and privileges they would have 

been entitled to had they been promoted.”

SHOPO filed a motion to confirm the arbitrator’s award 

in the circuit court on June 23, 2009, arguing that the award 

was valid, binding, and issued within the arbitrator’s 

authority.6

 The Employer opposed SHOPO’s motion and moved for 

 5 The arbitrator determined he had authority based on the section 

titled “Arbitrators Authority” in Article 32.

6 The Honorable Kathleen N.A. Watanabe presided in all circuit 

court proceedings in this case. 
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the circuit court to vacate the award on the basis that the 

arbitrator “exceeded his authority” under the agreement. The 

Employer also maintained that the arbitrator’s actions “were 

beyond the jurisdiction of negotiation and arbitration, as well 

as a violation of public policy.” SHOPO opposed the Employer’s 

motion to vacate and contended that the arbitrator had the 

jurisdiction and authority to decide the matter and noted that 

the Employer conceded in pre-arbitration proceedings that SHOPO 

had the right to grieve the subject promotions.

The circuit court heard argument on the motions in a 

July 29, 2009 hearing. The court stated during the hearing that 

the grievances were properly before the arbitrator and that the 

Employer had taken “inconsistent positions” regarding whether 

the promotions were a proper subject of arbitration. The 

circuit court stated, “I believe the employer is estopped from 

arguing otherwise, because they agreed to final and binding 

arbitration.” The circuit court continued, “They agreed that 

this was a proper subject.”

However, the circuit court also found that it was 

beyond the scope of the arbitrator’s authority under the 

agreement and HRS § 658A-23 to award promotions and back pay. 

The circuit court found that the agreement in this case was 

distinguishable from the collective bargaining agreement in

University of Hawaiʻi Professional Assembly v. University of 
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Hawaiʻi, 66 Haw. 214, 659 P.2d 720 (1983) (per curium)

[hereinafter UHPA II],7 which the circuit court found granted the 

arbitrator greater authority.

On August 6, 2009, the circuit court granted in part 

and denied in part the Employer’s motion to vacate. The court 

confirmed the arbitrator’s findings of facts and conclusions 

with the exception of the arbitrator’s remedy, which the court 

vacated. The court reasoned that the grievances were properly 

before the arbitrator and within his jurisdiction, but the court

also found that the arbitrator’s remedy exceeded his authority 

and powers granted under Article 32 of the agreement in 

violation of HRS § 658A-23. In accordance with its rulings, the 

court denied SHOPO’s motion to confirm the arbitrator’s award

and remanded the case for a rehearing on the issue of remedy. 

SHOPO filed a notice of appeal, which was dismissed by the ICA

for lack of appellate jurisdiction.

On July 8, 2010, the arbitrator issued a decision 

regarding the circuit court’s order denying the Employer’s

request to vacate the arbitrator’s remedy. The arbitrator’s 

 7 In a series of four cases decided on the same day in 1983, this 

court clarified judicial review of arbitration decisions in the context of 

public sector collective bargaining agreements providing for final and 

binding arbitration. See Univ. of Haw. Prof’l Assembly v. Univ. of Haw., 66 

Haw. 207, 659 P.2d 717 (1983) (per curium) [hereinafter UHPA I]; UHPA II, 66 

Haw. 214, 659 P.2d 720; Univ. of Haw. v. Univ. of Haw. Prof’l Assembly, 66 

Haw. 228, 659 P.2d 729 (1983) (per curium) [hereinafter UHPA III]; Univ. of 

Haw. v. Univ. of Haw. Prof’l Assembly, 66 Haw. 232, 659 P.2d 732 (1983) (per 

curium) [hereinafter UHPA IV]. 
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decision stated that the parties agreed to a rehearing on the 

remedy issue before the arbitrator by submitting their arguments 

and positions via memoranda. The arbitrator concluded that the

remedy from his previous decision would “remain unchanged” based 

on the arbitrator’s “reading and interpretation of the plain 

language and meaning of the ‘Arbitrator’s Authority’ as set 

forth in Article 32” of the agreement.

The arbitrator also made several findings with regard 

to his authority under Article 32 including that “the words 

‘otherwise change’ are clear and unambiguous” and grant the 

arbitrator the authority to grant promotions as part of the 

remedy to resolve grievances. The arbitrator found that the 

remedy was consistent with past practices of parties under the 

agreement. The arbitrator also found that the Employer “never 

contended during the arbitration hearings that the language in 

Article 32 was not sufficiently worded to permit the Arbitrator 

to grant a promotion to remedy the grievances.” Additionally, 

the arbitrator noted that he had “previously found” that the 

grievants were “well qualified based on merit and ability for 

promotion,” as shown by evidence presented during the 

arbitration hearings. 

SHOPO filed a motion to confirm the arbitrator’s July 

8, 2010 award arguing that the arbitrator’s remedy “should be 

confirmed as a ‘final and binding’ decision that was issued 
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within the arbitrator’s authority.” The Employer opposed 

SHOPO’s motion and filed a motion to vacate. On September 20, 

2010, the circuit court issued orders resolving the parties’ 

motions. The court granted in part and denied in part SHOPO’s 

motion to confirm the award; as it had done previously, the 

court confirmed the arbitrator’s “findings and decisions in all 

respects” but vacated based on the arbitrator’s remedy. SHOPO 

timely filed a notice of appeal.

In a published opinion, the ICA first considered

SHOPO’s contention that the Employer was estopped from asserting 

that the arbitrator exceeded his authority in awarding 

promotions because the Employer failed to raise this argument 

during arbitration. The ICA rejected SHOPO’s estoppel argument, 

distinguishing the UHPA II case from this case based primarily 

on the wording of the respective agreements. The ICA also found 

that the Employer contested the arbitrator’s authority to 

promote the grievants during the arbitration hearings.

With regard to the remedy awarded by the arbitrator, 

the ICA concluded that pursuant to the agreement and HRS § 89-

9(d), the arbitrator did not exceed his authority in awarding 

promotions and the circuit court erred in finding otherwise. In 

its analysis, the ICA considered the public policies set forth 

in HRS §§ 76-1 and 89-9 but did not expressly resolve whether 

the agreement was contrary to public policy. Accordingly, the 
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ICA affirmed in part and vacated in part the circuit court’s

August 6, 2009 and September 20, 2010 orders and remanded the 

case to the circuit court for confirmation of the arbitrator’s 

decision in its entirety.

The Honorable Lisa M. Ginoza concurred and dissented 

in the decision, arguing that the arbitrator exceeded his 

authority in granting the remedy (ICA dissent). The Employer 

requests this court to adopt the analysis of the ICA dissent, 

which interpreted the agreement as reserving the right to 

promote solely to the Employer and to the exclusion of the 

arbitrator.

II. STANDARDS OF REVIEW

“[J]udicial review of an arbitration award is confined 

to ‘the strictest possible limits,’” and a court may only vacate 

an award on the grounds specified in HRS § 658A-23 and modify or 

correct on the grounds specified in HRS § 658A-24. See Daiichi 

Haw. Real Estate Corp. v. Lichter, 103 Hawaiʻi 325, 336, 82 P.3d 

411, 422 (2003). This standard applies to both the circuit 

court and the appellate courts. See id. (noting that HRS §§ 

658–9 and –10 “also restrict the authority of [appellate courts] 

to review judgments entered by circuit courts confirming [or 

vacating] the arbitration awards” (quoting Mars Constructors, 

Inc. v. Tropical Enters., Ltd., 51 Haw. 332, 336, 460 P.2d 317, 

319 (1969)).
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The circuit court’s “findings of fact will not be set 

aside unless they are clearly erroneous.” Beneficial Haw., Inc. 

v. Casey, 98 Hawaiʻi 159, 167, 45 P.3d 359, 367 (2002). 

A finding of fact is clearly erroneous when, despite 

evidence to support the finding, the appellate court is 

left with the definite and firm conviction in reviewing the 

entire evidence that a mistake has been committed. A 

finding of fact is also clearly erroneous when the record 

lacks substantial evidence to support the finding. We have 

defined ‘substantial evidence’ as credible evidence which 

is of sufficient quality and probative value to enable a 

person of reasonable caution to support a conclusion.

Daiichi, 103 Hawaiʻi at 337, 82 P.3d at 423 (citations 

omitted) (quoting Beneficial Haw., Inc. v. Kida, 96 Hawaiʻi 

289, 305, 30 P.3d 895, 911 (2001)) (internal quotation 

marks omitted). We review the circuit court’s conclusions 

of law under the right/wrong standard. Id.

III. DISCUSSION 

The Employer raises one issue in its Application for 

Writ of Certiorari, whether “the ICA gravely erred in holding 

that the Arbitrator did not exceed his powers under the 

applicable collective bargaining agreement . . . by ordering 

that the Grievants be promoted to the position of Sergeant and 

awarding the attendant back pay and benefits.” The Employer 

argues that the Arbitrator exceeded his authority under the 

agreement in promoting the grievants and maintains that the 

agreement expressly reserves the right to promote to the 

Employer. The Employer also submits that the arbitrator’s 
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awarding of back pay and promotions are in violation of public 

policy.

In response, SHOPO maintains that the ICA majority

reached the correct decision and that the circuit court 

“contravened well established case law” in “second guessing” the 

arbitrator’s interpretation of the collective bargaining 

agreement, ignoring the unambiguous language of the agreement, 

and disregarding the parties’ long standing practice “that 

permitted the Arbitrator to resolve the grievances as he did.”

A. The Arbitrator’s Decision and Award Could Have Rested on an 

Interpretation of the Agreement. 

In this case, the parties agreed to “final and 

binding” arbitration for the settlement of grievances. “It is 

well settled that the legislature overwhelmingly favors 

arbitration as a means of dispute resolution.” Tatibouet, 99 

Hawaiʻi at 234, 54 P.3d at 405 (quoting Leeward Bus Co. v. 

Honolulu, 58 Haw. 64, 71, 564 P.2d 445, 449 (1977)). 

Accordingly, the legislature narrowly constrained judicial 

review of arbitration awards in the HRS, Chapter 658A. Under 

HRS § 658A-22 (Supp. 2001),8 a party to an arbitration proceeding 

 8 HRS § 658A-22 provides the following:

After a party to an arbitration proceeding receives notice 

of an award, the party may make a motion to the court for 

an order confirming the award at which time the court shall 

issue a confirming order unless the award is modified or 

corrected pursuant to section 658A-20 or 658A-24 or is 

vacated pursuant to section 658A-23. 
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may make a motion to a court for confirmation of an award. HRS 

§ 658A-22 requires the court to confirm the order unless the 

award is modified or corrected under certain limited 

circumstances9 or is vacated pursuant to HRS § 658A-23 (Supp. 

2001).10 The circumstances under which a circuit court may 

vacate an arbitration award are set forth in HRS § 658A-23, 

 9 The award may be modified or corrected by the arbitrator pursuant 

to HRS § 658A-20 or by the court pursuant to HRS § 658A-24. 

10 HRS § 658A-23(a) provides the following: 

Upon motion to the court by a party to an arbitration 

proceeding, the court shall vacate an award made in the 

arbitration proceeding if:

(1) The award was procured by corruption, fraud, or other 

undue means;

(2) There was:

(A) Evident partiality by an arbitrator appointed as a 

neutral arbitrator;

(B) Corruption by an arbitrator; or

(C) Misconduct by an arbitrator prejudicing the rights of 

a party to the arbitration proceeding;

(3) An arbitrator refused to postpone the hearing upon 

showing of sufficient cause for postponement, refused to 

consider evidence material to the controversy, or otherwise 

conducted the hearing contrary to section 658A-15, so as to 

prejudice substantially the rights of a party to the 

arbitration proceeding;

(4) An arbitrator exceeded the arbitrator’s powers;

(5) There was no agreement to arbitrate, unless the person 

participated in the arbitration proceeding without raising 

the objection under section 658A-15(c) not later than the 

beginning of the arbitration hearing; or

(6) The arbitration was conducted without proper notice of 

the initiation of an arbitration as required in section 

658A-9 so as to prejudice substantially the rights of a 

party to the arbitration proceeding.
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which includes vacation of an arbitration award if an 

“arbitrator exceeded the arbitrator’s powers.” Cf. Tatibouet, 

99 Hawaiʻi at 234, 54 P.3d at 405 (discussing the limitations on 

judicial review of arbitration awards under HRS § 658-9 (1993)

(repealed 2001)).

In determining whether an arbitrator has exceeded his 

or her authority under the agreement, “there should be no 

‘second guessing’ by the court” of the arbitrator’s 

interpretation of his or her authority so long as the 

arbitrator’s interpretation “could have rested on an 

interpretation and application of the agreement.”11 Local Union 

1260 Int’l Bhd. of Elec. Workers v. Hawaiian Tel. Co., 49 Haw. 

53, 56, 411 P.2d 134, 136 (1966); UHPA I, 66 Haw. at 210, 659 

P.2d at 719 (explaining that the issue of arbitrability should 

be decided by the arbitrator, rather than the court, because 

“the parties agreed to submit to the arbitrator” disputes of 

arbitrability); see also Haw. State Teachers Ass’n v. Univ. Lab. 

Sch., 132 Hawaiʻi 426, 432, 322 P.3d 966, 972 (2014) (upholding 

the principle that questions of arbitrability are reserved for 

 11 Federal courts apply a similar standard: an arbitrator’s award 

“is legitimate only so long as it draws its essence from the collective 

bargaining agreement.” United Steelworkers of Am. v. Enter. Wheel & Car 

Corp., 363 U.S. 593, 597 (1960); see also W.R. Grace & Co. v. Local Union 

759, Int’l Union of United Rubber Workers, 461 U.S. 757, 765 (1983) (“Because 

the authority of arbitrators is a subject of collective bargaining, just as 

is any other contractual provision, the scope of the arbitrator’s authority 

is itself a question of contract interpretation that the parties have 

delegated to the arbitrator.”). 
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the arbitrator); UHPA III, 66 Haw. at 230, 659 P.2d at 731 (“It 

is the arbitrator’s construction of the contract which was 

bargained for.” (alterations omitted) (quoting United 

Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 

597 (1960)).

Consistent with our case law discussing the proper 

review of arbitration awards, the agreement in this case 

provided, “The award of the Arbitrator shall be accepted as 

final and binding. There shall be no appeal from the 

Arbitrator’s decision by either party, if such decision is 

within the scope of the Arbitrator’s authority . . . .” 

Accordingly, the outcome of this case depends on whether the 

arbitrator’s interpretation of the scope of his authority “could 

have rested on an interpretation and application of the 

agreement.” Hawaiian Tel. Co., 49 Haw. at 56, 411 P.2d at 136.

In this case, Article 32 of the agreement expressly 

grants the arbitrator the authority to “decide whether the 

Employer has violated, misinterpreted or misapplied any of the 

terms of this Agreement.”12 Article 32 further provides that 

 12 Article 32 provides: 

The Arbitrator’s authority shall be to decide whether the 

Employer has violated, misinterpreted or misapplied any of 

the terms of this Agreement and in the case of any action 

which the Arbitrator finds unfair, unjust, improper or 

excessive on the part of the Employer, such action may be 

set aside, reduced or otherwise changed by the Arbitrator. 

The Arbitrator may, in the Arbitrator’s discretion, award 

back pay to recompense in whole or in part, the employee 

(continued . . .)
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“any action which the Arbitrator finds unfair, unjust, improper 

or excessive on the part of the employer, such action may be set 

aside, reduced or otherwise changed by the Arbitrator.” 

(Emphasis added). Further, Article 32 gives the arbitrator the 

authority to “award back pay” and “return to the employee such 

other rights, benefits, and privileges or portions thereof as 

may have been lost or suffered.”

Article 32 supports an interpretation that the 

arbitrator had the authority to award promotions and back pay in 

this case. Article 32 grants the arbitrator the authority to 

determine violations of the agreement and to remedy such 

violations. By granting promotions to the grievants, the 

arbitrator returned to the grievants “such other rights, 

benefits, and privileges” that were “lost or suffered” as a 

result of the nonpromotions, thus, “chang[ing]” the action of 

the Employer it found to violate the agreement. Because the 

arbitrator’s authority to grant promotions and back pay “could 

have rested on an interpretation and application of the 

agreement,” the circuit court should not have “second guessed” 

the arbitrator’s award in this case. See Hawaiian Tel. Co., 49 

Haw. at 56, 411 P.2d at 136. “Indeed, by giving the arbitrator 

 

(continued . . .)

for any salary or financial benefits lost, and return to 

the employee such other rights, benefits, and privileges or 

portions thereof as may have been lost or suffered. 
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the power to actually grant tenure or promotion, the collective 

bargaining agreement is made that much more meaningful, since 

‘the confidence of the workers in the equity of the agreement is 

strengthened when they know that any dispute over the meaning of 

the contract may be submitted to an impartial third party for 

decision.’” UHPA II, 66 Haw. at 223, 659 P.2d at 727 (quoting 

James M. Ringer, Note, Legality and Propriety of Agreements to 

Arbitrate Major and Minor Disputes in Public Employment, 54 

Cornell L. Rev. 129, 135 (1968)).

The Employer urges this court to adopt the analysis of 

the ICA dissent, which found that the award of promotions

exceeded the arbitrator’s authority under Article 11 of the 

agreement. Article 11 reserves exclusively to the Employer “all 

management rights and authority, including the rights set forth 

in Section 89-9(d)(1)-(8), Hawaii Revised Statutes, except as 

specifically abridged or modified by this agreement.” The ICA 

dissent seems to suggest that because Article 11 reserved the 

Employer’s right to make promotions--“except as specifically

abridged or modified”--the agreement must expressly state that 

the arbitrator has the authority to grant promotions. However, 

this interpretation of the agreement does not give appropriate 

judicial deference to the arbitrator’s interpretation of the 

agreement and is contrary to the terms of the agreement itself.
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Additionally, the ICA dissent references a court’s 

authority to review whether the arbitrator exceeded its 

authority under the agreement and under HRS § 658A-23(a)(4) in 

responding to SHOPO’s argument that the circuit court erred by 

substituting its interpretation of the agreement for that of the 

arbitrator. The ICA dissent states that the agreement in this 

case is “even beyond the authority provided by HRS § 658A23(a)(4)” because the agreement in this case “expressly 

contemplates that a party may seek judicial review when there is 

a question whether the Arbitrator exceeded his authority.”13 

While it is true that HRS § 658A-23(a)(4) and the agreement 

authorize judicial review for a determination of whether or not 

the arbitrator exceeded its authority under the agreement, it 

does not follow that the court may substitute its own 

interpretation of the agreement for that of the arbitrator when 

making such a determination. 

Further, we disagree with the ICA dissent’s 

interpretation of the arbitrator’s authority under the 

agreement. The ICA dissent looked at Article 32 and Article 42 

separately for express grants of such authority, while not 

 13 The agreement’s provision that the arbitrator’s decision be 

“final and binding” and that there shall be “no appeal” of an arbitrator’s 

decision within the scope of the arbitrator’s authority is consistent with 

HRS § 658A-23 and Hawaiʻi case law limiting judicial review of arbitration 

decisions. Accordingly, the provision for judicial review under the 

agreement appears to be coextensive with HRS § 658A-23(a)(4). 
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considering the importance of reading the two provisions 

together. See Leeward Bus Co., 58 Haw. at 68, 564 P.2d at 448 

(“[A]n agreement should be construed as a whole and its meaning 

determined from the entire context and not from any particular 

word, phrase or clause.” (quoting Ching v. Hawaiian Restaurants, 

Ltd., 50 Haw. 563, 565, 445 P.2d 370, 372 (1968))). When read 

together, Article 47 and Article 32 make promotions subject to 

the grievance procedures of the agreement and, thus, grant the 

arbitrator the authority to “otherwise change” any action with 

relation to a promotion that the Arbitrator finds “unfair, 

unjust, improper or excessive.” Article 32 also specifically 

gives the arbitrator the authority to “award back pay” and 

“return to the employee such other rights, benefits, and 

privileges or portions thereof as may have been lost or 

suffered.”

The arbitrator determined that the grievants were 

denied promotions “due to subjective, arbitrary and capricious 

promotional practices.” Under Article 32, the arbitrator was 

authorized to “return to” the grievants the right, benefit, or 

privilege of their promotions that they lost due to the improper 

interview procedure. It would be illogical for the arbitrator 

to have authority over the promotion grievances yet have no 

authority to “otherwise change” the grieved action and “return 
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to” the grievants the privileges and benefits lost as a result 

of the nonpromotions. 

An interpretation of the agreement that recognizes the 

arbitrator’s authority to remedy the promotion grievances is

further bolstered by the fact that the arbitrator’s authority 

over the grievances was agreed to by the parties, affirmed by 

the circuit court, and not raised on appeal. Further, the 

arbitrator found that the remedy granted in this case was 

consistent with past practices of the parties under the 

agreement, and the record indicates that there were three to 

five positions that were open at the time of the arbitration 

hearing.14

For the reasons discussed above, the ICA majority

correctly concluded that “the arbitrator’s award did not exceed 

his authority and the circuit court erred in failing to so 

conclude.”

B. The Arbitrator’s Decision and Award Does 

Not Violate Public Policy.

In its Application, the Employer asks this court to 

“set aside the ICA’s holding pertaining to whether the 

Arbitration Decision violated public policy.”

 14 This case therefore does not raise, and we do not address, a 

situation where an arbitrator’s remedy would require an employer to establish 

a new position for a grievant. 
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Hawaiʻi case law recognizes “that there is a limited 

public policy exception to the general deference given 

arbitration awards.” Inlandboatmen’s Union of the Pac. v. Sause 

Bros., Inc., 77 Hawaiʻi 187, 194, 881 P.2d 1255, 1262 (App. 

1994); see also Gepaya v. State Farm Mut. Auto. Ins. Co., 94 

Hawaiʻi 362, 366, 14 P.3d 1043, 1047 (2000). This public policy 

exception is based on the exception recognized by the United 

States Supreme Court in United Paperworkers International Union 

v. Misco, Inc., 484 U.S. 29 (1987); see Sause Bros., 77 Hawaiʻi

at 194, 881 P.2d at 1262 (adopting the public policy exception 

of Misco and directing that the exception should be applied 

under the guidelines set forth in Misco). 

The Court in Misco established a framework for courts 

reviewing public policy claims. First, the court must determine 

whether there is an “explicit, well defined, and dominant” 

public policy that is “ascertained ‘by reference to the laws and 

legal precedents and not from general considerations of supposed 

public interests.’” See E. Associated Coal Corp. v. United Mine 

Workers of Am., Dist. 17, 531 U.S. 57, 62 (2000) (quoting W.R. 

Grace & Co. v. Rubber Workers, 461 U.S. 757, 766 (1983)) (citing 

Misco, 484 U.S. at 43)); accord Sause Bros., 77 Hawaiʻi 187, 193, 

881 P.2d 1255, 1261 (App. 1994). Second, the court must 

determine whether the arbitration award itself is clearly shown 

to be “contrary” to the “explicit, well-defined, and dominant 
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public policy.” See E. Associated Coal Corp., 531 U.S. at 62-

63; Sause Bros., 77 Hawaiʻi 187, 194, 881 P.2d 1255, 1262 (App. 

1994) (stating that the court must determine that “the violation 

of the public policy is clearly shown” in order for the public 

policy exception to apply (alterations omitted) (quoting W.R. 

Grace & Co., 461 U.S. at 766)). 

We consider whether the arbitrator’s award violates

public policies with regard to the merit principles as set forth 

in HRS § 76-1 and the authorized scope of negotiations of 

collective bargaining agreements as expressed in HRS § 89-9(d).

First, “[t]he merit principle is the selection of 

persons based on their fitness and ability for public employment 

and the retention of employees based on their demonstrated 

appropriate conduct and productive performance.” HRS § 76-1

(Supp. 2000). There is nothing in the record to suggest that 

the arbitrator’s authority to grant promotions and back pay in 

this case violates the merit principle. To the contrary, the 

agreement is in accordance with the merit principle as it 

requires promotions to be based on “fair standards of merit and 

ability, consistent with applicable civil service statutes, 

rules and regulations and procedures.” The arbitrator heard 

testimony with regard to the grievants’ professional background 

and work performance, and the arbitrator found that “the 

grievant officers were well qualified based on merit and ability 
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for promotion to the rank of sergeant based on the evidence 

presented during the arbitration hearings.” Thus, the 

arbitrator’s award in this case was not contrary to the merit 

principle. Accordingly, there is no basis to support a finding

that the arbitrator’s authority to grant promotions and back pay 

was contrary to the public policy of promotions in accordance 

with the merit principle. 

Second, HRS § 89-9, which pertains to the scope of 

negotiations for public sector collective bargaining, provides 

that an employer and union may not agree in collective 

bargaining to any provision “which would interfere with the 

rights and obligations of a public employer to” perform several 

listed functions including to “[h]ire, promote, transfer assign, 

and retain employees in positions.” While HRS § 89-9(d) 

expresses a policy that a collective bargaining agreement should 

not interfere with an employer’s prerogative to make promotions, 

the provision expressly provides that this subsection “shall not 

preclude negotiations over the procedures and criteria on 

promotions . . . as a permissive subject of bargaining during 

collective bargaining negotiations.” Further, HRS § 89-9(d) 

states, “Violations of the procedures and criteria so negotiated 

may be subject to the grievance procedure in the collective 

bargaining agreement.” 
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Thus, HRS § 89-9(d) expresses a policy to avoid 

interference through collective bargaining with an employer’s 

function to make promotions, but the statute specifically states 

that this policy is to be balanced against a policy to encourage 

negotiations over the procedures and criteria on promotions that

may be subject to grievance procedures. Accordingly, HRS § 89-9 

does not include an “explicit, well defined, and dominant” 

public policy discouraging the arbitrator’s award of promotions 

and back pay in this case. 

The public policy to encourage negotiation over the 

procedures and criteria for promotions that is clearly expressed 

on the face of HRS § 89-9(d) is further bolstered by the history 

behind the 2007 amendment to the provision.15 The legislature’s 

2007 amendments to HRS § 89-9(d) were made in light of United 

Public Workers v. Hanneman, 106 Hawaiʻi 359, 105 P.3d 236 (2005), 

 15 The 2007 amendments added the following language: 

This subsection shall not be used to invalidate provisions 

of collective bargaining agreements in effect on and after 

June 30, 2007, and shall not preclude negotiations over the 

procedures and criteria on promotions, transfers, 

assignments, demotions, layoffs, suspensions, terminations, 

discharges, or other disciplinary actions as a permissive 

subject of bargaining during collective bargaining 

negotiations or negotiations over a memorandum of 

agreement, memorandum of understanding, or other 

supplemental agreement.

Violations of the procedures and criteria so negotiated may 

be subject to the grievance procedure in the collective 

bargaining agreement.

2007 Haw. Sess. Laws Act 58, § 1 at 101 (emphasis added). 
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wherein the court held that management rights under HRS § 89-

9(d) precluded collective bargaining over the City and County of 

Honolulu’s unilateral decision to transfer refuse workers to a 

different employment location. Under Hanneman, the scope of 

topics subject to negotiation cannot “infringe upon an 

employer’s management rights under [HRS § 89-9(d)].” Hanneman, 

106 Hawaiʻi at 365, 105 P.3d at 242. The purpose of the 2007 

amendments was to clarify that management rights enumerated in 

HRS § 89-9(d) do not invalidate or preclude negotiations 

concerning agreements on procedures and criteria on promotions 

and other management functions. See S. Stand. Comm. Rep. No. 

889, in 2007 Senate Journal, at 1438. The House Committee on 

Labor & Public Employment stated that “negotiations over 

procedures and criteria of promotions . . . are consistent with 

the underlying purpose of chapter 89, HRS.” H. Stand. Comm. 

Rep. No. 1465, in 2007 House Journal, at 1595. 

Further, as the parties agreed before the arbitrator, 

SHOPO challenged the way in which the promotions were done and 

did not challenge the Employer’s right to make promotions. 

Thus, the arbitrator’s decision and award did not infringe on 

the Employer’s authority to make promotions in accordance with 

the bargained for criteria and procedures and relevant law. See

UHPA II, 66 Haw. at 220-21, 659 P.2d at 725 (holding that HRS 

89-9(d), which granted the employer the “exclusive jurisdiction 
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over matters such as setting the criteria for determining 

tenure, promotion, and other areas of faculty employment,” did 

not prohibit the arbitrator “from actually granting tenure or 

promotion upon a finding of arbitrary or capricious conduct”). 

Thus, the arbitrator’s award has not been clearly shown to be 

“contrary” to an “explicit, well-defined, and dominant public 

policy.” 

We thus conclude that the arbitration award in this 

case did not violate public policy. 

C. Clarification of the Doctrine of Quasi-Estoppel. 

The ICA majority held that the Employer was not 

estopped from contesting the arbitrator’s authority. The ICA

majority’s ruling was based primarily on a distinction that it 

drew between this case and the UHPA II case, which is discussed 

below. 

Under the doctrine of quasi-estoppel, a party is 

estopped from taking “a position inconsistent with a previous 

position if the result is to harm another.” UHPA II, 66 Haw. at 

221, 659 P.2d at 725; see also, e.g., Godoy v. Haw. Cnty., 44 

Haw. 312, 320, 354 P.2d 78, 82 (1960) (“But there is a species 

of equitable estoppel, sometimes called quasi-estoppel, which 

has its basis in election, waiver, acquiescence, or even 

acceptance of benefits and which precludes a party from 

asserting to another’s disadvantage, a right inconsistent with a
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position previously taken by him. No concealment or 

misrepresentation of existing facts on the one side, no 

ignorance on the other, are necessary ingredients.” (quoting 

Hartmann v. Bertelmann, 39 Haw. 619, 627-28 (Haw. Terr. 1952)).

In UHPA II, this court found that the doctrine of 

quasi-estoppel provided a basis for affirmation of an 

arbitrator’s award of tenure and back pay to a grievant. 66 

Haw. at 216-17, 659 P.2d at 723. The UHPA II court found it 

significant that the parties contractually agreed that the 

arbitrator’s decision would be “final and binding” and that the 

Employer agreed to arbitrate the tenure and promotions dispute. 

Id. at 221, 659 Haw. P.2d at 726. The court explained that the 

Employer “could have either excluded subjects such as tenure and 

promotion from the agreement’s arbitration provision altogether, 

or it could have made clear, at the outset of the arbitration 

proceedings, that it was not submitting to the arbitrator the 

power to actually grant tenure or promotion.” Id. at 221-22, 

659 Haw. P.2d at 726. UHPA II found that the grievant would 

have been “substantially disadvantaged in terms of time and 

money spent in the arbitration process and in litigation” if the 

employer were permitted to argue that the arbitrator never had 
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the power to resolve the grievances only after the arbitration 

award was not decided in its favor.16 Id.

The agreement in this case, like the agreement in UHPA

II, provides for “final and binding” arbitration. Also like the 

agreement in UHPA II, the agreement here does not exclude 

promotions from the arbitrator’s powers. Further, Article 47 of 

the agreement expressly provides requirements for promotions, 

and Article 32 gives the arbitrator the authority to “award back 

pay” and “return to the employee such other rights, benefits, 

and privileges or portions thereof as may have been lost or 

suffered.” Thus, the scope of the arbitrator’s authority in 

this case is not significantly different from that of the 

arbitrator in UHPA II. 

The ICA majority distinguished this case from UHPA II

on the basis that the agreement in UHPA II “expressly gave the 

 16 The court in UHPA II stated, 

After having contractually agreed that arbitration would be 

the last step in the grievance process and that the 

arbitrator’s decisions would be “final and binding,” and 

after agreeing to arbitrate these tenure and promotion 

disputes only to see the arbitration award go against it in 

each and every instance, the University now complains that 

the arbitrator never had the power to resolve these 

grievances in the first place. We find this complaint 

untenable. The University could have either excluded 

subjects such as tenure and promotion from the agreement’s 

arbitration provisions altogether, or it could have made 

clear, at the outset of the arbitration proceedings, that 

it was not submitting to the arbitrator the power to 

actually grant tenure or promotion.

66 Haw. at 221, 659 P.2d at 726.
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arbitrator the right and power to ‘substitute his judgment for 

that of the official’ if the arbitrator found the official’s 

decision to be arbitrary and capricious,” while in this case the 

Employer retains the management rights under the agreement 

“except as specifically abridged or modified.” However, this is 

not a meaningful distinction because the UHPA II court’s focus 

was on the parties’ agreement to “final and binding” arbitration

and the Employer’s consent to arbitrate tenure and promotions. 

See UHPA II, 66 Haw. at 221-22, 659 P.2d at 726. Further, the 

ICA majority’s comparison of the arbitrator’s authority in UHPA 

II with the Employer’s authority in this case does not support

the ICA majority’s distinction, particularly since the employer

in UHPA II and the employer in this case retained similar 

authority over promotions.17 

We note that the arbitrator in this case made an

express finding that the Employer “never contended during the 

arbitration hearings that the language in Article 32 was not 

sufficiently worded to permit the Arbitrator to grant a 

promotion to remedy the grievances.” Nonetheless, the ICA 

majority made a contrary finding that the “Employer did contest 

the arbitrator’s authority to actually promote the grievants.” 

 17 The employer in UHPA II had “exclusive jurisdiction over matters 

such as setting the criteria for determining tenure, promotion, and other 

areas of faculty employment.” UHPA II, 66 Haw. 214, 220, 659 P.2d 720, 725 

(1983). 
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Because we find that the arbitrator acted within the scope of 

his authority under the agreement, we need not decide whether 

the doctrine of quasi-estoppel applies in this case and,

therefore, do not address this conflict between the findings of 

the ICA majority and the arbitrator.

IV. CONCLUSION 

Accordingly, the ICA’s December 5, 2014 Judgment on 

Appeal is affirmed, but for the reasons set forth herein. 

Mauna Kea Trask

for petitioner

Vladimir Devens

for respondent 

/s/ Mark E. Recktenwald

/s/ Paula A. Nakayama

/s/ Sabrina S. McKenna

/s/ Richard W. Pollack

/s/ Michael D. Wilson