A county violated state civil service laws when it privatized the operation of a landfill, thereby displacing government employees who had worked at a predecessor facility. As a result, the contract between the county and the private operator is void, and the landfill operation must be transferred back to the county (Jack T. Konno v. County of Hawaii, et al., No. 18203, Hawaii Supreme Ct., Feb. 28, 1997).
For many years, the county of Hawaii owned two landfills and operated them with county workers. Then, in 1991, county officials considered constructing and operating a new landfill using a private contractor.
The labor union that represents public employees in the state agreed to outside help in constructing the new facility, but opposed private operation. The privatization effort stalled until late 1992 when the county administration changed hands. Thereupon, the county went forward with privatizing construction, operation and closure of the new landfill. After competitive bidding, it awarded the contract to Waste Management of Hawaii in April 1993.
County officials did not seek certification from the personnel director or from the civil service commission that the worker positions at the new landfill could not be filled through normal civil service procedures. In addition, the county did not consider the privatization decision to be subject to mandatory bargaining. Instead, the 10 landfill workers who were affected by the privatization were given the choice of either resigning from the government and working for the contractor or working at other civil service jobs.
In May 1993, the union filed a lawsuit in a state court claiming that the county had violated merit principles and civil service law and requesting damages and an injunction. Waste Management joined the suit on the side of the county.
After holding hearings, the court in mid-1994 ruled in favor of the county and upheld the contract's validity. (The union also filed a complaint with the state labor relations board on various collective bargaining issues not directly related to the contract's legality.)
On appeal, the Hawaii Supreme Court addressed the policies behind privatization and civil service, and examined the approaches taken by courts in other states. The court concluded that the state's civil service laws were intended to cover work that has been "customarily and historically provided by civil servants."
The court found that the workers at the new landfill performed, for the most part, the same duties as the employees at the old landfill who held civil service positions.
The landfill workers at the new site "are performing a service that has been customarily and historically provided by civil servants," the court said. As the legislature did not expressly exclude the privatization process from coverage, the landfill worker positions are "still within the civil service," the opinion concluded.
The high court overturned the circuit court's decision and sent the case back with instructions to enter a judgment in favor of the union and to issue an injunction barring private operation of the landfill. However, the circuit court also was directed to oversee the transition to county operation "consistent with practical and public interest concerns."
In the same vein, the California Supreme Court has ruled that the state cannot hire private companies for work that civil servants can perform (Professional Engineers in California Government v. Dept. Of Transportation, No. S042591, May 15, 1997).
The ruling - which state officials say will delay nearly $500 million in future transportation projects - nevertheless allows the state to contract out whenever it can show that private companies can do the work more cheaply, that state employees lack the ability or that an emergency exists and public safety is at stake.
The high court said that state officials failed to support their claim that restrictions on private contracting create additional expense or safety risks.
Under a state constitution provision adopted in the 1930s, the state must use civil service employees whenever possible. State engineers, invoking the constitutional requirement, convinced a Sacramento judge to issue an injunction in 1990 restricting the ability of the Department of Transportation to award private contracts.
After the injunction took effect, state lawmakers passed a bill that called for more private contracting on road construction projects. California Governor Pete Wilson pointed to that law when he refused to obey the injunction, and an intermediate appeals court sided with him.
Overturning the appellate decision, the supreme court, by a five-to-two margin, found that the state law conflicted with the California constitution and was adopted without sufficient evidence that private contracting was necessary.