Arbles v. Merit Appeals Bd.

151 Hawai‘i 400

515 P.3d 217

Aaron ARBLES, Robert Bailey, Reuben Chun, Michael Gahan, Michael Hayashida, Garret Komatsu, Gerald Kosaki, Steve Loyola, Jerry Lum, Ty Medeiros, Paul Paiva, Raymond Rowe, Jr., Warren Sumida, and Alvin Tobosa, Appellants-Appellants,

v.MERIT APPEALS BOARD, County of Hawai‘i, Mitch Roth, Mayor, County of Hawai‘i, and Waylen L.K. Leopoldino, Director of Human Resources, County of Hawai‘i, Appellees-Appellees¹

NO. CAAP-17-0000072

Intermediate Court of Appeals of Hawai‘i.

JUNE 30, 2022

AS CORRECTED JULY 21, 2022

On the briefs:

Robert M. Hatch, Margery S. Bronster, (Bronster Fujichaku Robbins A Law Corporation), Honolulu, for Appellants-Appellants.

D. Kaena Horowitz, Mark D. Disher, Deputies Corporation Counsel, County of Hawai‘i, for Appellees-Appellees Mitch Roth, Mayor of County of Hawai‘i and Waylen L.K. Leopoldino, Director of Human Resources, County of Hawai‘i.

James E. Halvorson, Deputy Attorney General, for Appellee-Appellee Merit Appeals Board.

GINOZA, CHIEF JUDGE, HIRAOKA AND NAKASONE, JJ.

OPINION OF THE COURT BY NAKASONE, J.

This appeal considers the application of Hawaii Revised Statutes (HRS ) § 89C-3(b)(2),² which requires government employers to make adjustments to the compensation and benefit packages of civil service employees excluded from collective bargaining to ensure that the compensation and benefit packages of the excluded employees are at least equal to the compensation and benefit packages of their subordinates covered by collective bargaining. The appellants claim that the county employer violated HRS § 89C-3(b)(2) by paying appellants hourly rates less than the highest hourly rates paid to their subordinates.

Appellants-Appellants Aaron Arbles, Robert Bailey, Reuben Chun, Michael Gahan, Michael Hayashida, Garret Komatsu, Gerald Kosaki, Steve Loyola, Jerry Lum, Ty Medeiros, Paul Paiva, Raymond Rowe, Jr., Warren Sumida, and Alvin Tobosa (collectively, Battalion Chiefs or Chiefs ) appeal from the (1) December 27, 2016 Decision and Order Denying Appellants’ Appeal (Decision and Order ) and (2) January 26, 2017 Final Judgment, filed and entered by the Circuit Court of the Third Circuit (Circuit Court )³ in favor of Appellees-Appellees Mitch Roth, Mayor of the County of Hawai‘i, and Waylen L.K. Leopoldino, Director of Human Resources, County of Hawai‘i (collectively, County ) and the Merit Appeals Board (MAB ).⁴

On appeal, the Battalion Chiefs, who are excluded civil service employees, contend that the Circuit Court erred by affirming the MAB's conclusion that the County provided the Battalion Chiefs "compensation and benefit packages that [we]re at least equal to the packages of their subordinate Captains [(Fire Captains )] who were receiving higher hourly rates of pay because they had more years of service or were assigned to specialty stations, and therefore did not violate H.R.S § 89C-3(b)(2)." The Battalion Chiefs specifically contend that the Circuit Court and the MAB erred in excluding "Hazmat and Rescue" differentials (hazardous assignment differential )⁵ paid to certain Fire Captains and not considering pay inversions⁶ due to "years of service" in the evaluation of the respective compensation and benefit packages of the Battalion Chiefs and Fire Captains under HRS § 89C-3(b)(2). The Battalion Chiefs also contend that the Circuit Court erred when it concluded that Arciero v. City and Cty. of Honolulu, No. 30160, 2011 WL 6355166, at *1 (App. Dec. 15, 2011) (mem.) "did not apply."⁷

We hold that the County's exclusion of the hazardous assignment differential and failure to consider pay inversions due to "years of service" resulted in the compensation and benefit packages of the Battalion Chiefs not being "at least equal to" their subordinates’ packages, in violation of HRS § 89C-3(b)(2). For the reasons explained infra, we vacate and remand.

I. BACKGROUND

On August 27, 2014, the Battalion Chiefs filed a complaint with the County and then-Hawai‘i Fire Department Fire Chief Darren J. Rosario, requesting retroactive and future adjustment of their compensation and benefit packages in compliance with HRS § 89C-3. The County denied their request, and on December 22, 2014, the Battalion Chiefs appealed the denial to the MAB. Following four days of evidentiary hearings in August and September 2015, the MAB issued its February 24, 2016 Findings of Fact, Conclusions of Law, Decision and Order Granting In Part and Denying In Part Appeal of Appellant Aaron Arbles and Denying Appeals of Robert Bailey, Reuben Chun, Michael Gahan, Michael Hayashida, Garret Komatsu, Gerald Kosaki, Steve Loyola, Jerry Lum, Ty Medeiros, Paul Paiva, Raymond Rowe, Jr., Warren Sumida, and Alvin Tobosa (FOFs/COLs and Order ).

The Battalion Chiefs appealed to the Circuit Court pursuant to HRS § 91-14. At the November 4, 2016 hearing, the Circuit Court affirmed the MAB's FOFs/COLs and Order. The Circuit Court filed its Decision and Order on December 27, 2016. The Battalion Chiefs timely appealed the January 26, 2017 Final Judgment.

The Decision and Order sets forth the relevant procedural history, factual findings,⁸ and legal conclusions as follows:

The Hawai‘i Fire Department divides Hawai‘i Island into two operational Battalions. The First Battalion covers the east side of the island and the Second Battalion the west. There are eleven stations in the First Battalion. Nine are commanded by Fire Captains and two by Fire Equipment Operators. The Second Battalion has nine stations.^[9]

Within each battalion, there are also two specialty fire stations. One provides rescue operations such as water, high angle, and helicopter rescue. The other provides hazardous materials ("HAZMAT") operations. Firefighters assigned to these stations need to complete specialized training.

Firefighter IIIs and Captains assigned to specialty units (rescue or HAZMAT) are entitled to an hourly rate increase of 8.126% above their rank and longevity rate. This differential is paid for all hours worked regardless of whether the firefighter actually participates in a rescue or HAZMAT activity.

The Hawai‘i Fire Fighters Association ("HFFA") is the union representing firefighters working for the counties in the State of Hawai‘i. The HFFA negotiates with the Counties to reach a Collective Bargaining Agreement ("CBA") that applies uniformly for all members of HFF A across the State of Hawai‘i. Thus, HFFA members have the same compensation and benefit packages under the CBA regardless of whether they work for the County of Hawai‘i or the City and County of Honolulu. The HFFA is designated as Bargaining Unit 11. Firefighter IIIs and Captains assigned to specialty units (rescue or HAZMAT) are members of Unit 11 and represented by the HFFA.

The CBA for Bargaining Unit 11 for 2011-2017 provides for the 8.126% differential. Section 44D of the CBA states, in part, that employees assigned to units that are designated for search and rescue which require them to be trained and/or certified beyond that which is required for other members of their class (and such is not recognized in the pricing of their class) shall be paid a hazardous assignment differential of 8.126% of the employee's regular salary in addition to base pay and applicable differentials and premiums. The 8.126% differential is only paid to specially trained and qualified personnel assigned to specialty fire stations and not to all members of Bargaining Unit 11, unlike Rank for Rank, which was the focus of the Arciero case.

Battalion Chiefs are excluded managerial positions. They are not members of Bargaining Unit 11. During the period [sic] January 1, 2005 to January 15, 2015, no Battalion Chief has ever been assigned to any of the Hawai‘i County Fire Department's two HAZMAT and two Rescue stations.^[10] Appellants’ claim they did not receive compensation and benefit packages since 2005 that are at least equal to the compensation and benefit packages provided under applicable collective bargaining agreements for counterparts and subordinates was primarily based on the report and testimony of their expert, a certified public accountant. The expert's report was admitted into evidence during the hearings on the merits.

The expert identified the highest hourly rates for Fire Captains in Hawai‘i County over the time period covered in the County's payroll records. He compared the highest Captain's hourly rate to each Battalion Chiefs actual hourly rate for the same pay periods. The conclusions in the expert's report were based on his premise the 8.126 % [sic] hazardous duty pay differential was an "adjustment".

Appellants’ expert did not identify any instances in which a Battalion Chief did not receive compensation and benefit packages at least equal to that of subordinate Fire Captains that did not arise from the assumption that the 8.126 % [sic] hazardous duty differential was an adjustment.

As mentioned above, the 8.126% hazardous duty assignment is only paid to specially trained and qualified personnel assigned to specialty fire stations and not to all members of Bargaining Unit 11. Excluding consideration of the hazardous duty premium differential available only to bargaining unit employees assigned to specialty HAZMAT and Rescue Stations, none of the Appellants identified any specific instance in which any Appellant did not receive compensation and benefit packages at least equal to that of any subordinate Fire Captain.

The hazardous duty premium differential identified in § 44 D. of the CBA is not available to employees who are not specially trained and not assigned to specialty HAZMAT and Rescue stations. It does not comprise an "adjustment" to compensation nor is it part of a benefit package for purposes of ensuring that excluded civil service employees receive compensation and benefit packages that are at least equal to the compensation and benefit packages provided under collective bargaining agreements for counterparts and subordinates within the employer's jurisdiction .^[11] The CBA, at

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