U.S. District Judge Helen Gillmor rejected Friday an attempt by the United Public Workers union to derail the privatization of Maui Memorial Medical Center and Kula and Lanai Community hospitals, according to an announcement from the state Department of the Attorney General.
The union, which represents approximately 1,500 employees of Hawaii Health Systems Corp., argued that the state law providing for the transition of the hospitals to Kaiser Permanente violated the contracts clause of the U.S. Constitution. The union also maintained that the law interferes with two collective bargaining agreements between the state and certain HHSC employees. HHSC is the quasi-government body that manages the public Maui County facilities.
The judge dismissed UPW's complaint and denied the union's motion for a preliminary injunction, the department reported.
In her ruling, Gillmor said there was no merit in UPW's claim that the state law providing for privatization of the public hospitals impairs a contractual right to be employed for the full term of the collective bargaining agreements. She noted that the collective bargaining agreements contain layoff provisions.
"Not only is there no guarantee of employment, there is no express or implicit term that requires the Hawaii Health Systems Corp. to operate any specific facility for the duration of the agreement," the judge's ruling says. "The collective bargaining agreements explicitly contemplate the possibility of an employee-wide layoff as well as layoffs due to a 'lack of work, need or fund.'''
Attorney General Douglas Chin said: "I am pleased that the court confirmed that the Legislature acted within its rights in passing this law and that Governor Ige acted properly in working to implement it."
The Legislature passed a bill that Gov. David Ige signed into law as Act 103. It authorizes the Maui Region of HHSC to stop providing health care services in Maui County, while creating a process to allow a private entity to take over services.
According to the department, Gillmor ruled that that UPW failed to show any constitutional violation and determined that the UPW was unlikely to prevail on the merits of its case - a key element for the judge to rule to issue an injunction.
"The state is working diligently to make sure this transition gets done the right way," Chin said.
Gillmor also ruled that Ige is entitled to sovereign immunity against being sued in his official capacity.