Trustees of the Employer-Union Health Benefits Trust Fund may have assumed they could hammer out agreements on board policy during secret “mediation” sessions under a sunshine law exemption intended to allow confidential labor negotiations.

The use of the “labor negotiations” exemption to cover secret mediation is now being reviewed by the Office of Information Practices following a request for an opinion by Larry Geller (www.disappearednews.com).

In a December 1 letter to EUTF Chair George Kahoohanohano, OIP attorney Lorna Aratani asks for a detailed explanation of EUTF’s position “including any relevant legal citations”.

The issue is crucial because two controversial decisions of the EUTF board with significant impacts on public workers statewide were based on recommendations from the secret mediation sessions and there is little in the public record of the board to indicate why and how they came to be the preferred outcomes.

The first decision was to eliminate the direct competition between HMSA and HMA preferred provider option plans that had been offered for several years.

When they competed directly, HMSA says more than 99% chose the plan it administered over the HMA option. Despite that record, EUTF then designated HMA as the “default” PPO and assign HMSA to offer an alternative plan with fewer benefits but a slightly lower monthly cost.

The minutes show there was concern about application of the sunshine law.

Mr. Williams (EUTF director Jim Williams) stated the Board could proceed without opening the mediation to the public but there could be a possibility it could be challenged.

The EUTF board made two legal references when it approved a motion “to engage in dispute resolution”, citing Chapter 87A-11(c) HRS and Rule 1.07(d)(4) for its authority.

Neither specifically authorizes a departure from the sunshine laws’ open meeting requirements, and EUTF meeting minutes show board members may have assumed that their personal experience in confidential labor negotiations, specifically permitted by the sunshine law, would be applicable to the EUTF, a jump that appears to be without specific legal support.

The statute cited describes the EUTF’s peculiar voting arrangement. It provides that the five trustees representing the public employers “collectively” have one vote, with the five employer trustees also having one collective vote.

Subsection (c) provides:

(c) Any action taken by the board shall be by the concurrence of at least two votes. In the event of a tie vote on any motion, the motion shall fail. Upon the concurrence of six trustees, the board shall participate in dispute resolution.

Dispute resolution is not defined and there is no apparent exemption provided from the requirements of the sunshine law.

The board rule cited in the minutes provides that the board can vote to engage in a dispute resolution process after being deadlocked on an issue for two meetings in a row.

If six trustees of the board vote to engage in dispute resolution, the two trustee groups shall enter into mediation to attempt to resolve the question or resolution upon which the board has deadlocked.

The rule then discusses the selection of a mediator, either appointed by the Federal Mediation and Conciliation Service, selected by mutual agreement, or appointed by a state court.

It also provides:

Nothing in this rule is meant to preclude the board from voting to engage in other forms of alternative dispute resolution to resolve a question or resolution upon which it has deadlocked.

During board discussion, several trustees referred to their own experience with mediation during labor negotiations.

What’s important about this is that the sunshine law specifically provides an exemption for labor negotiations that does not appear to apply to meetings of the EUTF.

Section 92-5 (a)(3) allows the public to be excluded from meetings:

(3) To deliberate concerning the authority of persons designated by the board to conduct labor negotiations or to negotiate the acquisition of public property, or during the conduct of such negotiations;

However, this exemption for “labor negotiations” does not appear to apply to meetings of the EUTF board of trustees.

In addition, it’s important to note that the federal mediation service also offers dispute resolution services that do not follow the procedures used in labor negotiations, including “public policy dialogues” and “negotiated rulemaking”. Some examples on the agency’s web site involve situations covered by the federal “Government in the Sunshine Act”, the equivalent of the state sunshine law.

The sunshine law specifically requires any exemptions to be interpreted narrowly in favor of open meetings. Here’s the full list of permitted exemptions, and it doesn’t appear that any of them would apply to the EUTF’s discussion of proposed health insurance plans or rates, which do not involve personal private or other restricted matters.

§92-5 Exceptions. (a) A board may hold a meeting closed to the public pursuant to section 92-4 for one or more of the following purposes:

(1) To consider and evaluate personal information relating to individuals applying for professional or vocational licenses cited in section 26-9 or both;

(2) To consider the hire, evaluation, dismissal, or discipline of an officer or employee or of charges brought against the officer or employee, where consideration of matters affecting privacy will be involved; provided that if the individual concerned requests an open meeting, an open meeting shall be held;

(3) To deliberate concerning the authority of persons designated by the board to conduct labor negotiations or to negotiate the acquisition of public property, or during the conduct of such negotiations;

(4) To consult with the board’s attorney on questions and issues pertaining to the board’s powers, duties, privileges, immunities, and liabilities;

(5) To investigate proceedings regarding criminal misconduct;

(6) To consider sensitive matters related to public safety or security;

(7) To consider matters relating to the solicitation and acceptance of private donations; and

(8) To deliberate or make a decision upon a matter that requires the consideration of information that must be kept confidential pursuant to a state or federal law, or a court order.

However, even if the board violated the sunshine law by participating in secret mediation sessions, there may be no recourse for the public.

The sunshine law provides:

§92-11 Voidability. Any final action taken in violation of sections 92-3 and 92-7 may be voidable upon proof of violation. A suit to void any final action shall be commenced within ninety days of the action.

In the case of EUTF, its final action to adopt the recommendation that came out of the mediation session was made in an open meeting.

Furthermore, more than 90 days has elapsed since that vote was taken.

And although penalties for individual board members who violate the sunshine law are provided, in this case EUTF board members appeared to follow the advice of their attorney, and as a result they could not be considered to have “wilfully” violated the law.

In any case, OIP has requested that EUTF reply to its request for information within 10 business days.