click on cover to order hardcopy

The new contract was not too well received by HRT worker; who had expected more. In the next negotiations that started in May 1938, the Amalgamated, prodded by criticism from leaders of the CIO United Transport Workers, took a more aggressive position-the men took a strike vote on the union shop issue. The International, however, refused permission for a strike and after five months of negotiations, the local settled for a five cent increase, free uniforms, fourteen days vacation after one year and a reopening each June 30. In 1939 the contract was renewed without any change. It was again renewed in September 1940 with a five cents wage increase (see Appendix B).

By 1940, Charles Wright was President of the Amalgamated local. Another organizational change of greater significance for the future of labor relations at HRT was that the CIO United Transport Workers, under guidance from Louis Welch and Arthur Rutledge, disbanded in June 1940. Its members then joined the Amalgamated and infused it with a new sense of militancy. Within a few months, several former CIO members, including Henry Gonsalves, who became President of Division 1173 in 1943, assumed leadership roles in the Amalgamated and were actively involved in 1940-1941 negotiations.

AUTHOR'S ADDITIONAL NOTES:

Major sources for information on HRT's early labor history are:

1. Up From Company Unionism: The Rise of the Transit Workers Union (not bearing any author's name, although written by John E. Reinecke), issued by the Transit Workers Union, Honolulu, Hawai'i, May 12, 1949.

2. Frank Vaughan, "A History of Industrial Relations at Honolulu Rapid Transit Company, Ltd." Paper for Economics 294, University of Hawaii, 1954. Only one microfilm copy of this paper exists in the University of Hawaii Hamilton library. It is a remarkably complete and objective account of industrial relations up to about 1953, written by an undergraduate. Vaughan, in 1955, went to work for T. H. Davies in personnel administration and labor relations. As later head of that department until his retirement in 1984, he frequently dealt with Rutledge in negotiations covering Teamster organized employees.

Identification of early directors of HRT made through Company annual reports. Their role in early Hawaiian history is described in Lawrence H. Fuchs, Hawaii Pono. A Social History (New York: Harcourt, Brace & World, Inc., 1961), and in Gavan Daws, Shoal of Time: A History of the Hawaiian Islands (New York: Macillan Co., 1968).

The ethnic makeup of the work force until the early 1940s was described by former HRT employees who first went to work for the Company at that time.

The use of labor spies by HRT in 1937 is mentioned by both Reinecke and Vaughan who quotes an unidentified company official as the source for his information.

The thousands of defense workers who poured into Honolulu during 1940 and 1941 included large numbers of mainland union workers who swelled the ranks of existing local unions and also imbued them with a new awareness of basic union principles. There was more organizing of new members than had occurred in almost any previous year. Organized labor, although still relatively weak, reached its pre-World War II peak of about 10,000, up from a mere 3,500 just two years earlier. By 1941, the union shop had been established at two operations that were later to become Teamster units: Primo Brewery after a 50-day strike that ended in February 1938, and at the Dairymen's Association in January 1941.

HRT, then enjoying a sharp increase in bus riders as a result of the defense boom, was willing to make many concessions in 1940-1941 negotiations but remained adamant on the union shop issue. In a full page ad they stated their firm belief that the company must have the full right to select each and every employee with care because they were responsible for the women, little children, and the aged and the infirm, who rode the buses.

On January 23, 1941, Amalgamated members, by a vote of 237 to 57 agreed to strike for the establishment of a union shop. Nine days later, on February 1, the men walked off the job in the first strike in HRT history.

The Honolulu Advertiser, previously noted for its virulent racism, strongly opposed the strike in an editorial in its February 2, 1941, issue with a rather unusual argument:

The same things said in these columns during the Inter-Island shipping strike can be restated with even greater emphasis today. Every other principle of union labor is acceptable in Hawaii for collective bargaining. The closed shop is not . . . The closed shop would eventually crowd out the Hawaiian worker. In this mainland form of unionism, he would find himself outside the closed door. The American-born Japanese, laborer or artisan, would be discriminated against . . . The closed shop is the rallying cry of radical West Coast labor leaders for Nordic immigration to replace Asiatic Americans in Hawaii. The minute it gets a foothold, out the window goes the slogan 'Hawaii for the Hawaiians'.

The strikers, by overwhelming votes, twice rejected a company offer that differed only slightly from the original offer. At the conclusion of one of these meetings, Rutledge, as the head of the bartenders union, spoke and told the strikers that they were obligated to the brewery workers, who had given financial support to the strike, and to organized labor to hold out for the union shop.

On February 24, four buses, escorted by police, started operating. Two days later, 20 new men were moved into the HRT building. At a union negotiating committee session on February 27, Rowan strongly suggested that the men accept a compromise on the union shop issue. One day later, the union membership voted 265-15 to accept a company offer that had been previously rejected.

The settlement, except for the absence of a union shop, contained some fairly good improvements. There were increased wages, improved vacations, greater job security and other improved conditions, but, considering that the main issue in the strike was the union shop demand, the result could only be regarded as a serious defeat for the Amalgamated.

An aftermath of the strike was the passage of the Public Utilities Labor Act which called for a "cooling off" period of at least one month before a strike could be called against a public utility, with penalties for violation of a fine or up to six months in jail. This was later amended in 1949, after the 1948 strike, to provide for even tougher provisions.

AUTHOR'S ADDITIONAL NOTES:

The impact of imported defense workers on the Hawaiian labor movement is described in J. Garner Anthony's Hawaii Under Army Rule (Palo Alto: Stanford University Press, c. 1955}.

Information on union membership and activities in Hawai'i is taken from the invaluable mimeographed "Unity House Chronology, 1937-1963," Honolulu, March 1965. The chronology was prepared by John E. Reinecke, then Research Director for Hawaii Teamster Local 996. A few copies of this manuscript may still be found in public libraries and at the Center for Labor Education & Research of the University of Hawai'i . A supplementary study, "Unity House Chronology 1964-1965" was issued in October 1968.

Bus ridership, according to Company annual reports, Increased from 19.4 million in 1939 to 29.0 million in 1941.

The third version of the Hawai'i Public Utility Labor Act, enacted in 1949, contained a new paragraph providing for the use of injunctions. That provision was never used according to Paul F. Brissenden, "The Labor Injunction in Hawaii," Annals of American Economics, Washington, D.C.; Public Affairs Press, 1956.

The bombs that fell on Pearl Harbor on December 7, 1941, radically changed ways of life in Hawaii. Within a few hours after the first bombs, Hawai'i was placed under military rule which lasted until October 24, 1944, when it was terminated by Presidential proclamation.

The Office of the Military Governor (OMG), irreverently referred to by some union leaders as "One Mighty God," assumed full control of all labor matters. A series of three General Orders, issued over a four month period, froze wages, froze men to their jobs unless formally released, provided penalties for changing jobs without a formal release or for failing to report to jobs selected by the military, and also banned all meetings. The ban on meetings, after many arguments and pleadings by union leaders, was finally relaxed. An OMG section of Labor Control, headed by the personnel director of one of the leading plantations, handled all labor grievances. The general orders relating to labor control were produced by the same law firm that represented the Big 5 companies.

The net effect of these restrictions was that union organizing virtually ceased, and many unions went into a deep freeze for at least two years. Bartenders Union Local 5 almost died as the Navy took over Matson hotels and dismissed all civilian employees. Bars, after being closed for three months, reopened but refused to abide by their pre-war contracts.

There were only two strikes of any significance during this period of martial law: a 10-day strike against Theo. H. Davies by the Teamsters, settled by arbitration; and a later strike by AFL drivers of the Moanalua Dairy.

Union membership in the early war years dropped by about half to around 5,000, but began picking up as the military situation later improved. Rutledge's personal situation, in this same period, despite a drastic loss in Local 5 membership, vastly improved. He acquired new positions, many new supporters and greatly enhanced his popularity among Hawaii's workers, especially Japanese-Americans.

With time on his hands because of very limited activity in Local 5, he handled negotiations for the electrical workers at Hawaiian Electric Company and for the dairy workers at Hind-Clarke. These last negotiations resulted in a contract that brought wage increases of from 39 to 62 percent. On the mainland, under the Little Steel Formula imposed by the War Labor Board, wage increases were limited to the increase in the cost of living since the last increase, 10 to 15 percent in most cases. ⁶

Hind-Clarke workers were almost entirely Japanese-Americans. The Hawaii Herald, an English language Japanese paper, was most enthusiastic about the settlement.

. . . The result was the negotiation of a contract that gave them the highest increase in wages and the greatest concessions ever won by any organized group of employees in the territory. (June 12, 1943)

Rutledge's stock among Hawai'i workers was also boosted by his public stands against racial discrimination. On August 1943, on a motion introduced by Bartenders Local 5, the Honolulu Central Labor Council adopted a motion calling for the naturalization of Chinese and Filipino aliens, contrary to the position then taken by the national AFL.

Again, in 1943, Rutledge openly opposed the position taken by the Hotel Workers International President Edward Flore in refusing to cooperate with the War Relocation Authority in placing Japanese-American workers in union jobs; Flore argued that they were of doubtful loyalty and also tended to work for lower wages.

Rutledge, with Reinecke's assistance, wrote an open letter to the International's official organ, the Catering Industry Employee in which he stated.

Man for man, we will match these 'Japs' against the same number of members of any other local in the United States. . . , The Hawaiian Japanese-American makes a good union man because he knows that the unions are the one force against the damnable dual standard of wages for Orientals and whites, which local big business instituted and would like to perpetuate. . . . He knows that in a union, he is an American.

It was also during this period that Rutledge made a brief feint at organizing plantation workers. At the end of 1943, he and Jack Kawano of the ILWU visited Hilo on the Big Island of Hawai'i to sound out organizing possibilities on the plantations. Three days after their arrival, on December 13th, both men issued a joint statement proposing formation of an independent Big Island Labor Council. Almost immediately thereafter, on a motion by his old adversary in the Amalgamated, Charles M. Wright, Rutledge was suspended from office as Secretary of the Honolulu Labor Council and charged with "malfeasance of office."

A trial committee, headed by Wright, was set up to try the case. Over a period of three months the trial was postponed several times for lack of a quorum. Rutledge argued that since he had been suspended, he was no longer a member and, therefore, couldn't be tried. He then secured a court injunction against the holding of the trial, and the Council finally dismissed the charges.

It was of this period that Arnold L. Wills of the NLRB is reported to have responded to a question about the labor movement in Hawai'i: "There isn't any-there's just one man running around loose."

NOTE:

6. Hawaiian labor settlements were under military control until June 1944 when, after a visit by the Chairman of the Board, the War Labor Board revoked Hawaii's previous exemption from federal wage controls.

AUTHOR'S ADDITIONAL NOTE:

The role played by the Office of the Military Governor in World War II labor activities is taken from J. Garner Anthony's book, Hawaii Under Army Rule; Mark Perlman's "Organized Labor in Hawaii," Labor Law Journal, April 1952; and from John E. Reinecke's A History of Local 5: Hotel and Restaurant Employees and Bartenders International Union AFL-CIO (Honolulu: Industrial Relations Center, University of Hawai'i, May 1970). This last named study is also the source for the quotation from the Catering Industry Employee and the quote of Arnold L. Wills. The information about the use of a Big 5 law firm to draft the general orders regarding labor is from an attorney who worked for the firm at that time.

HRT drivers under military rule were frozen to their jobs, put on a seven-day-a-week basis with no overtime for the seventh day. Passenger traffic in 1943 was nearly three times what it was before Pearl Harbor, buses were crowded, some drivers were held to a 14-hour spread, and there was the additional strain of driving in the blackout and with frequently unruly GIs. When the Amalgamated moved to open their contract in early 1943, Addison Kirk, company president, who also doubled as Director of Land Transportation for the Military Governor, turned them down on the grounds that wages were frozen. An appeal to the Military Government's Section of Labor Control got nowhere. Finally, after a memo to OMG (prepared by Reinecke, signed by Rutledge and two others} that accused both HRT and the Section of Labor Control of giving them the runaround, the Military Government called in management and the union and dictated a new contract to become effective July 1, 1943. The terms included an average wage increase of 24 cents per hour, improved sick leave and overtime provisions, and a higher starting pay for bus drivers (see Appendix B).

Shortly before July 1, the company announced a reduction in fares, a reduction made necessary by its excessive earnings. Company revenues had soared to the point where its rate of return was close to eight percent instead of the usual six percent allowed by the Public Utilities Commission. The fare reduction was estimated to amount to about half a million dollars.

About this same time, a bus driver was disciplined for not following one of the company's many rules. Thereafter, according to a Honolulu Advertiser story on June 30, all drivers were urged by the Union to adhere to all company rules, "although one union official said that observance of all rules will make it impossible for the drivers to give good service to the public."

The union, it was reported, had adopted a resolution urging drivers to adhere diligently to company requirements in order to meet the threat of a company "crackdown." It was explained that no fewer than 200 rules were listed. The company, according to the same story, said it had no knowledge of any "crackdown."

The next day, the same day that their new wage increase went into effect and a new method of issuing tokens was to be instituted, some 1,000 Pearl Harbor workers, plus many working elsewhere, were from one to two hours late for work as buses slowed down. On strict observance of the rules, all passengers had to move beyond the white line in the front of the bus; stops were skipped when the buses were full; buses did not pass any bus ahead of them; and transfers were very carefully examined at each stop. At one time, a long line of about 20-30 buses going into Waikiki were strung out for several miles. Other traffic was also stalled. Police, called to the scene, arrested 56 operators for obstructing traffic; they reported that many of the operators were proceeding as slow as five miles per hour in the 20-mile-per-hour zone and that none was driving more than 15 miles per hour.

One driver, after listening to complaints from many riders, is reported to have taken off his cap during one of several long stops and in his loudest voice to have said:

Folks, I know you're wondering what's going on. So for your own information I want to tell you this. The company has asked us to observe the rules going into effect today. We're doing the best we can to get you down to work on time but because of the rules, we are delayed. Right now I know many drivers are behind their schedule but we can't help that. I think the best thing for you to do is for you to petition the company and ask that some of the regulations be overlooked. I feel we can give you as fast and safe a ride as before if some of the rules were relaxed. It's up to you to ask the company for us. Thank you. (Star Bulletin, July l, 1943)

The next day, Henry Gonsalves, President, and Ernest Burlem, Secretary of the Amalgamated local, met with the Military Governor, Lt. General Robert C. Richardson, Jr., to protest the "persecution of its drivers by the City police department."

On Saturday, July 3, a union committee met with Addison Kirk. The company agreed to modify two of the rules immediately and to suspend four others pending investigation. Kirk admitted that some of the company rules were obsolete and probably needed change from time to time.

The Amalgamated paid the bail forfeitures of its driver-members, a total of $110. The Advertiser, in an editorial on the same day as the meeting, attributed the action of the drivers to pique because the company had reduced fares instead of turning the money over to them as a bonus. The editorial went on to state:

The busmen have put themselves on the spot. They have followed a course that can be regarded in no other light than as direct aid to Hirohito and his Tokyo butchers. This is particularly unfortunate because of the preponderance of young American-born Japanese among the drivers…

AUTHOR'S ADDITIONAL NOTES:

Something of the feeling of utility employees (including HRT employees) is conveyed by this quote from J. Garner Anthony's book:

…employees of utilities were frozen to their jobs (under General Order No, 91) ... This resulted In great dissatisfaction, particularly in view of the higher wages received by others doing similar work. . . . Whatever might be said for industrial mobilization carried out by the government under a general law, there is little to be said for the freezing of men to their jobs for the benefit of private employees who stood to profit as the result of a job freeze, (p. 43).

Anthony also says of the memo to OMG, ". . , the first articulate protest was set forth by a local of the AFL Teamsters Union" and quotes from it extensively (p. 44).

The need for the Company to reduce its fares in order to avoid excessive earnings is first mentioned in Frank Vaughan's paper.

The eight year span following the end of World War II was a period of turbulence. Rutledge unionism, as exemplified by the HRT workers, engaged in a series of head on clashes with the economic power structure. It suffered its share of losses and gains, and ultimately emerged as a respected and recognized adversary to be taken seriously at all times. These were the years in which the membership, while tackling the company on several fronts, completely broke with Amalgamated Division 1173, established its own independent union (Transit Workers Union of Hawaii) and decisively defeated attempted comebacks by the Amalgamated in three NLRB elections (see Appendix A).

The period was marked by a series of mass actions, led by Rutledge, that fully engaged the membership. These were bold, daring, innovative actions, illegal in some cases, but actions that fired up the members and infused them with a sense of identity and loyalty to the union. This was the period in which drivers first provided "free rides?" in which members engaged in organized marches on the Governor's office? packed court room demonstrations? conducted regular strikes, quickie strikes, and weekend strikes. Except for the relatively quiet years of 1949 and 1952, job actions occurred in every year of the period (see Appendix C). These were, in a sense, formative years for Rutledge in which tactics were first tested, modified and developed. They became part of the Rutledge operational style that remained with him for the rest of his organizational life.

In 1944, Henry Gonsalves, former president of Amalgamated Division 1173, attempted to lead a movement out of the Amalgamated, which he felt was under pro-company influence. He wrote a sharply critical letter to the Advertiser pointing out the many shortcomings of the Amalgamated leadership. For this he was suspended by the Amalgamated for 99 years. He then left HRT and was immediately hired as a business agent for the Teamsters.

The company during the war years had prospered as the result of the vast increase in revenue passengers. In one year, 1943, it had paid over one million dollars in excess profits tax. It had also reduced fares in order to cut back on excessive earnings and, throughout the war years, had greatly increased its "contingency" and "depreciation" reserves, all of which would be seized by Harry Weinberg after he took over control of the company some 1415 years later.

HRT workers, in addition to the OMG dictated 24 cents average increase in 1943, received only one additional increase in the war years: a negotiated ten cents increase in the form of an overtime and bonus plan, finally approved by the War Labor Board in December 1944 (retroactive to July 1, 1944) after two previous rejections by that agency (see Appendix B). They hoped to do some "catching up" to wages and conditions in other industries in the postwar years. This was the year (1946) in which over five million workers on the mainland, through industry-wide strikes, secured an 18 1/2 cents "pattern" wage increase in such basic industries as steel, auto, electrical, nonferrous metals, and others.

The company's financial picture changed with the end of the war. There began a steady decline in passenger traffic and revenues which, although comfortable by prewar standards, was a persistent downward trend. The Hawaii Public Utilities Commission, in an effort to relieve that situation, authorized an interim increase in token fares to five for 40 cents (previously six for 40 cents).

Negotiations for a new contract started on May 16, 1946. At a special meeting on June 27, 1946, the Amalgamated negotiating committee, led by L. A. Olney, business agent, and Claude W. Tebeau, president, reported that the company would consider an eight cent wage increase if the union would agree to give up sick leave. A new element had entered the bargaining scene-the company had designated the Hawaii Employers Council (set up three years before) as its "accredited representative for collective bargaining purposes."

At another special meeting four days later, the membership, after agreeing to admit Rutledge and Henry Gonsalves to the meeting, voted to reject the company's offer, to disband the existing negotiating committee and to appoint a new negotiating committee consisting of four HRT employees plus Rutledge and Gonsalves, with Rutledge to serve as chairman. There was no apparent action for the next nine days, and then things moved quickly.

At a regular meeting on July 10, President Tebeau opened the meeting by asking if the members would follow the constitution or not. When asked to explain himself, Tebeau walked out. The remaining members were then asked to leave the school auditorium where the meeting was being held? it had been reserved on behalf of Tebeau. The group then marched over to the Bartenders Hall where the meeting was resumed. Tebeau, by membership vote, was suspended from the Amalgamated Association, and Edward (Chick) Collier was elected as President ProTern.

At another special meeting on the very next night, July 11, Rutledge and Gonsalves reported that the Hawaii Employers Council, on behalf of the company, refused to meet with this new negotiating committee. The Council had been notified by the Tebeau faction that they were still the official negotiating committee. An Advertiser reporter, present at the meeting, wrote that in the course of an hour long speech, Rutledge, "demanded that the union unite under his leadership to fight the communist inspired CIO trying to tie up all harbors in the area . . ." and that he hinted that further action might include giving the public free rides while continuing service. This was applauded loudly by the members.

The minutes of that July 11 meeting are silent on what was actually said with regard to the "free rides." What is clear is that no formal action was taken on this at that meeting. The union, because of the 30-day cooling off period required under the Hawai'i Public Utilities Labor Act could not legally strike. Rutledge's recollection is that at about that time the Amalgamated's official journal, Motorman, ran an article on a "no fares" action taken by a Japanese bus drivers group in Tokyo where strikes were then forbidden, and that there had been much talk of this among the men.

Honolulu's public transportation was badly crippled on Friday, July 12, as drivers placed their caps or handkerchiefs over the fare boxes or merely told passengers that no fares were required. Company inspectors spent most of the day looking for bus drivers guilty of failing to collect fares; several were discharged and replaced with relief drivers. Traffic was jammed for several blocks in the vicinity of the HRT terminal as sightseers flocked to the scene.

That night, as quoted in the press, Rutledge stated:

As far as the union is concerned, all drivers will report for work tomorrow [Saturday] but will collect no fares. If the company does not approve of this, it had better get busy and fire all the drivers. Our people are calling the bluff of the company and the Employers Council of pretending to be concerned with the public welfare. We will continue to give service, but only on a free basis. In this way the public really will be served.

The Rutledge faction, by Saturday, had made some important initial gains: Business Agent Lyman Olney and President Claude W. Tebeau of the Amalgamated faction wrote a letter to the company conceding that the Rutledge faction represented more HRT workers than they did. The company then immediately wrote to George Kaisan, who was both secretary of the Amalgamated and on the Rutledge negotiating committee, that they would deal with Rutledge's committee. Contact was soon established with James Blaisdell of the Hawaii Employers Council (for the company) but negotiations snagged on the union's insistence that all 29 discharged drivers be reinstated to their jobs. When the employers, after long sessions on Sunday, refused to budge on that issue, the union went into a two-hour meeting in which they voted not to return to work unless the drivers were rehired.

Rutledge, on Sunday, threatened to call out Honolulu Gas Company employees as the start of a tie-up of all utilities. On Monday, he called a meeting of Teamsters Local 904 (of which he was Business Agent), and 60 gas and oil drivers voted to strike in support of the HRT drivers. By early morning several filling stations (Shell, Tidewater Associated, and Union Oil) had dried up, and others were expected to be out of gasoline by noon. At this point, the Governor intervened directly in the dispute and, at a meeting with company and union representatives and the Territorial Attorney General, virtually dictated the terms of the settlement.

1. The 29 drivers were to be reemployed without loss of any of their rights.
2. Bus operators were to forfeit two days pay for Friday and Saturday (July 12, 13).
3. Upon return to work, all employees would perform the duties of their job faithfully and fully.

When we forced the company to rehire those 29 drivers that was the first time the members got a taste of their strength. The members were in favor of giving up two days pay because getting that agreement meant that the company had recognized this new group as the union, as an independent body separate from the company dominated Amalgamated. Just the recognition was worth all that.

Rutledge and five other members of the 1946 negotiating committee (Collier, Gonsalves, Kaisan, Lopes, Dias) were indicted in September of that year for "conspiring ... to hinder and prevent passengers . . . paying their fares" (so as to defraud and cheat the Honolulu Rapid Transit Company) and also for "... conspiring ... by instigating . . . the drivers ... to refuse to accept and collect the fares of passengers."

By the time the case came to trial over a year after the events involved had occurred, several important changes in the union situation had taken place. The new Transit Workers Union, by a better than 10 to 1 margin had won bargaining rights through an NLRB election? it had negotiated its first contract with the company, retroactive to July 1, 1946 (gains nearly twice as large as the company had offered the Amalgamated)? and the parties were in the midst of new negotiations under a wage reopening clause in the 1946 contract.

At the trial, which lasted eight days, a young company bookkeeper, Albert Moniz (who, 24 years later, was to become the first president of the city owned bus system) estimated that the "free rides" had cost the company $9,108.

One witness, Joe Turosh, an inspector, testified that, on company orders, he had tracked down various buses and where he found that fares were not being collected, he ordered the operator to drive the bus back to the car barn. In some instances, he himself took over the operation of the bus. He was then asked, "When you drove the bus, did you collect fares?" He responded, "Oh no-I'm a good union man, too."

Major testimony came from three police officers. Officer Sheather said that on July 12, 1946 (Friday), he heard Rutledge tell the men at the Alapai Street barn that the "free ride" plan was not a union action, that the men could use their own judgment about collecting fares. Officer Case testified that at that same meeting he heard drivers yelling, "free rides, free rides." On cross examination, he could not recall that Rutledge had ever said anything about this tactic originating in Japan. The third officer, Buckman, said that Rutledge told him, after the dispute had been settled, that the entire membership suggested the plan not to collect fares.

Rutledge was the only defendant to testify. He stated that he first heard about men planning to give free rides after meeting with the Governor on the morning of July 12. He heard men at the car barns talking about free rides but didn't give it a thought because it appeared "fantastic." At the time there was a meeting of bus drivers in progress. He yelled, "Let's have order, you can't do that"? then the men took off.

The union's attorneys, Richard S. Mirikitani and Ernest E. Wiles, argued that the government had failed to prove any criminal intent on the part of the defendants. Some 21 hours later the case was given to the jury. After 12 hours of deliberation, all defendants were acquitted.

"Upon hearing the verdict," reported the Star Bulletin August 1, "the reportedly 'hard boiled' labor leader, Mr. Rutledge, broke down and cried."

NOTE:

7. The Teamsters, as an affiliate of the AFL at the time, could not accept members from the
   Amalgamated, another AFL affiliate, on orders from their International.

AUTHOR'S ADDITIONAL NOTES:

Company finances and passenger traffic information taken from the company's annual reports.

The Hawai'i Public Utilities Commissions decision is Decision No. 82, Order No. 500.

The events that occurred at various union meetings are covered in typewritten minutes in Teamster Union files.

Details of what happened on the July 13, 1946, march through town, in addition to newspaper accounts, were also provided by Teamster members who were there.

The quote by George Kaisan is from a story on his retirement in The Hawaii Teamster of April 1985.

The Joe Turosh testimony at the trial, not mentioned in any of the newspaper accounts, is recalled by both Rutledge and Kaisan.

As if he were not busy enough with the "free ride" controversy to compel company recognition of the new Transit Workers Union of Hawaii; preparations for an NLRB election; and negotiations for a new contract, Rutledge, with the help of several other AFL Unions, most of which he controlled or influenced, determined that the year 1946 was the appropriate time in which to take on the recently organized Hawaii Employers Council on a basic issue of principle.

Hawaiian big business, as the end of World War II approached, realized that they would soon be facing an unprecedented, wide-ranging union organizing effort and that, just as the unions had to import persons with the necessary organizational experience and skills, they too needed help beyond what was locally available. The autocratic management style that may have sufficed in the days before the national government threw its weight behind labor's right to organize and bargain collectively would no longer do.

An organizational meeting of the Hawaii Employers Council, attended by some 46 persons representing the large businesses and agencies (the companies that dominated sugar, pineapple, inter-ocean travel) was held in July 1943. Soon thereafter, organizational preliminaries were completed and arrangements were made to bring James P. Blaisdell, a West Coast attorney and former president of the San Francisco Distributors Association, to Hawaii as the first President of the Council. ⁸

Shortly after his arrival in Hawaii in January 1944, Blaisdell participated in negotiations on behalf of Theo. H. Davies & Company with Local 996 of the Teamsters. A contract was executed which contained two of what became known as the Three Clauses: "No Strikes or Lockouts", "No Discrimination" and "Discharge."⁹

A few weeks later Rutledge negotiated a contract with Honolulu Construction and Draying Company, Ltd. (HCD) which contained the Three Clauses. At one of the negotiating sessions, one of the workers asked if the Discharge Clause could be used to prohibit crossing picket lines which might be established at plants of other employers. Rutledge stated that they had a right to refuse to cross picket lines and that right was guaranteed by the National Labor Relations Act. His statement was made in the presence of E. C. Rinehart, a negotiator for the Hawaii Employers Council, and Leroy Bush, President of the company. In their silence, he and the rest of his committee assumed that they agreed with his conclusions. That assumption proved to be incorrect.

An arbitration board, in October 1945, found that HCD was justified in discharging six employees for refusing to cross a picket line set up by Local 996 at the Davies plant. The arbitrators found that by accepting the Discharge Clause HCD employees had surrendered certain rights guaranteed under the National Labor Relations Act.

Thereafter, the Hawaii Employers Council insisted that all member companies include the Three Clauses (or a slight modification thereof) in all of their contracts. There were several instances in which unions would conclude an agreement with an employer only to find that the Hawai'i Employers Council had insisted that the contract be rewritten so as to include the Three Clauses. Particularly in dealing with a small employer, whose business depended on the goodwill of the larger businesses, there was always the implied threat of economic sanctions.

The unions, in practically all such instances, reluctantly yielded to the pressures exerted by the Employers Council.

The Honolulu Central Labor Council, at Rutledge's urging, decided to strike back. On July 2, 1946, it urged all affiliates to declare a one-day holiday on August 1 to protest Employer Council insistence on the Three Clauses. They then sent a letter to the Employer Council notifying it of their intentions. Local 904, the AFL Gas and Oil Drivers Union, served notice on Honolulu Gas, under the Hawai'i Public Utility Labor Act, that it planned to declare a work stoppage on August 1 "or any other day and stay out as long as deemed necessary" to make the Employers Council change its position. Similar notices were served on Hawaiian Electric by the IBEW local and on HRT by the Transit Workers Union.

The employer counteroffensive built up quickly and then burst forth in a massive blast against the union. A front page banner headline appeared in the Star-Bulletin of July 18-"AFL Unions Draw Lines for Oahu Work TieUp. Widespread Stoppage is Planned" followed by a detailed story warning, "indications are that the strike might be territory-wide and would paralyze almost every community, at least on Oahu."

At about this same time, Rutledge received a call at home one evening inviting him to a meeting of Employer Council members at the Smyth Auditorium on the grounds of the Queens Medical Center. When he appeared, he was physically grabbed and virtually hauled to the platform amid boos and shouts of "throw him out." He barely got started on his explanation when he was asked to leave.

He also later appeared at a meeting of about 200 women, We the Women. Again he found it almost impossible to speak amidst the boos, hisses, and catcalls that greeted him.

There were daily stories, usually front page, in both Honolulu papers for the next two weeks. Probably the heaviest fire came in a full page ad on July 24 signed by the presidents of Hawaiian Electric, Honolulu Gas, Mutual Telephone, and Honolulu Rapid Transit. The dire consequences of what a general utility strike would mean was spelled out in great detail.

There will be misery and tragedy such as no American city has ever known ... no refrigeration, ice shortage . . . hospitals paralyzed, public health threatened, danger of epidemic, water shortage, sewerage disposal blockade, no lighting, cooking or water heating by electricity or gas, no street or traffic lights, food spoilage, gas stoppage within a few hours, no public transportation, telephone service stopped, fire protection hampered, no milk supply, bakeries closed, industrial plants and canneries closed, restaurants, laundries, dry cleaning closed. ...

There was another full page advertisement in that same issue of the paper by Hawaiian Electric, a three-quarters page ad by the Hawaii Employers Council and individual appeals by We the Women, the Hospital Council, Honolulu Board of Supervisors, the Veterans of Foreign Wars, and local church leaders.

Whatever the original intentions of Rutledge and other AFL leaders may have been with regard to the August 1 general utility strike (and there are indications that they were at least partially serious), it was obvious that they had a bear by the tail and some kind of orderly retreat was called for.

Rutledge announced, on July 24, the same day that all of these ads appeared, that there would be no general strike in Honolulu for at least 50 days. The Central Labor Council, two days later, dropped its threat of a utility tieup. It stated:

It never was the intent nor the policy of the AFL to cause the untold suffering as advertised in the hysterical newspaper propaganda and radio programs and trumpedup meetings of the Employers Council. . . .

The ILWU, which had never gone along with the idea of the utility strike, in a newspaper ad "Let's Clear the Air" (July 31, 1946) stated:

The 'threat' of a utility strike was carefully played up by certain antiunion employers, who maneuvered the utility workers into a position where they could be used to arouse the public as well as organized labor. Even after the workers had stated that they intended no strike, the newspapers continued to play up the coming strike and to assert that a strike 'threat' is still present.

About six months before the Central Labor Council adopted its recommendation on the general walkout over the Three Clauses, Teamsters Local 904 had filed unfair labor practice charges with the NLRB against three oil companies (Shell, Union and Tidewater) for insisting on the Three Clauses in their contracts. With the abandonment of the threatened August 1st walkout, the entire labor movement looked to the NLRB, undoubtedly with some encouragement from its Regional Director, Arnold L. Wills, for some relief from what they considered an onerous burden. An NLRB trial examiner started hearings on the Teamsters complaint on August 7, 1946. His Intermediate Report, issued some eight months later, supported the union charges in nearly every respect, but 15 months after his report, a new labor board, operating under a revised National Labor Relations Act (Taft-Hartley), with little comment, curtly dismissed all charges against the companies.

The Labor Board, in its final report, took about four and a half printed pages to dismiss charges of refusing to bargain against the oil companies and unfair labor practices against the Employers Council. In an unusual departure from its customary procedure, it then reprinted, as an appendage to its decision, a 54 printed page Trial Examiner's report, which it rejected.

Union representatives who testified in support of the complaint against the companies and the Employers Council included, in addition to Rutledge, the AFL organizer for Hawai'i, two representatives of the Machinists Union, a Local 904 representative, and Jack Hall, ILWU Regional Director.

The Trial Examiner, Howard Myers, concluded that:

. . . The Council, soon after its formation, realized that organization of employees in Hawaii was rapidly becoming a factor with which the employers had to deal and the Council adopted the theory that if successful union organization was to be forestalled, and the purposes of the Act thus defeated, it could only be accomplished, if at all, by a uniform and consistently adhered to strategy. This gave rise to the inclusion of the three clauses in all labor contracts. By thus forcing employees, through their chosen representatives, to execute contracts which would entail the relinquishment of the rights of self-organization as guaranteed in the Act, before the employees could obtain wage increases and improved working conditions, is one of the more reprehensible elements in the entire anti-union program of the Council.

The official NLRB position failed to persuade Arnold Wills, its Hawai'i Regional Director. In a speech delivered more than two years after the decision was issued, he stated:

I know of no single item which in the last few years has caused so much bitterness and hostility and frustration among union employees in general as employer insistence that the Three Clauses go into every single contract.

One ironic note needs to be added to this story of the battle over the Three Clauses. Although HRT officials were active in the leadership of the Hawaii Employers Council, and Art Rutledge led the union fight against the Three Clauses, none of the standard Employer Council clauses was ever included in any HRT contract. One suggested reason for this is that there were enough controversies going on at any one time without taking on any new ones. Also, the kind of work done by HRT employees did not ordinarily bring them into contact with picket lines set up at other companies.

NOTES:

8. Leslie Hicks of Hawaiian Electric served as temporary President for a brief period before Blaisdell's appointment.
9. The three clauses read:
   No Strikes or Lockouts
   The parties hereto agree that during ihc term of this agreement any past, existing, or future custom or practice of the Employer or the Union to the contrary not withstanding, there shall be no lockout by the Employer, nor any strike, sit-down, refusal to work, stoppage of work, slow-down, retardation of production or picketing of the Employer on the part of the Union or its representative or on the part of any employee covered by the terms of this agreement.
   
   No Discrimination
   Employer will not discriminate against any employee because of his membership in the Union or for legitimate Union activities; provided, however, that such activity shall not interfere with Employer's operations and must not be conducted during working hours unless expressly provided for in this agreement. The Union agrees for itself and its members that neither it, its representatives or members will attempt to intimidate or coerce any employee of the Employer for the purpose of compelling such employee to join the Union.
   
   Discharge
   Employees shall be subject to discharge by the Employer for insubordination, pilferage, drunkenness, incompetence or failure to perform the work as required, or for failure to observe safety rules and regulations and employer's house rules which shall be conspicuously posted. Any discharged employee shall, upon request, be furnished the reason for such discharge in writing. Probationary and temporary employees may be summarily discharged.
   
   

AUTHOR'S ADDITIONAL NOTES:

The organization of the Hawaii Employers Council and their involvement with the "three clauses" are described in the Intermediate Report of Trial Examiner Howard Myers contained in NLRB decision In the Matter of Shell Oil Company . . . Union OH Company of California . . . Tidewater Associated Oil Company . . . and Hawaii Employers Council and Gasoline and Oil Drivers, Warehousemen and Helpers Union Local 904 . . . International Brotherhood of Teamsters . . . AFL, Cases Nos. 23-[-40, 23-[-43 and 23-[-44. Decided June 22, 1948, 77 NERB1315.

The quote from Arnold L. Wills' speech is contained in Paul F. Brissenden's article, "The Three Clauses in Hawaiian Eabor Agreements," Political Science Quarterly (March 1953), p. 105.

Strikes run by Honolulu transit workers in the years 1948-1953 played a crucial role in helping to determine Rutledge's attitude toward strikes in general. Over this six-year period there was a big loss (1948), a big win (1950-1951) and some experimental strategies that "almost" but finally failed to win NLRB approval. In between these confrontations the union sought safe havens when the going was rough, only to prepare for future battles at a more propitious time.

Out of these experiences, there developed a reluctance to engage in long strikes (not always adhered to when conditions seemed right or when the Union was backed into a corner), and preference for "quickie" actions despite NLRB disapproval and possible court action.

The 1948 strike came after unusually long and protracted negotiations that stretched over 15 months, involved five separate fact finding and mediation boards, the use of a court injunction, and many of the usual Rutledge dramatic touches, such as mass marches through town and courtroom demonstrations. There was also, for a period, rare support by the Honolulu Star Bulletin of the union's campaign to have the negotiations settled by arbitration.

The union looked on the 1948 negotiations as an outgrowth of the December 1946 settlement. In December 1946, when the union settled its first contract with HRT, that contract was regarded as a down payment on what was owed to its members-an adjustment to compensate for loss of take home pay because of the postwar cutback in hours. The year 1946 had been a tough one for the union. It had pressured the company into a recognition of its bargaining rights by use of the "no fares" demonstration, had won NLRB certification in October (see Appendix A), and still faced a court trial of its leadership after their indictment for conspiracy in the "no fares" incident. This was a good time to pin down what was available while continuing to negotiate for the balance of what they regarded as due to them, particularly in comparison with mainland settlements.

The 1946 settlement was for two years, with a wage reopener on July 1, 1947. When the union filed its reopener notice in early 1947, it met with a flat refusal by the company to consider any wage increase, based on its declining postwar ridership. The Territorial Director of Labor, under the "cooling off" provisions of the Hawaii Public Utility Labor Act, appointed a mediation board which failed to settle the dispute. The Governor then appointed an emergency board which found that the company could not, "pay additional wages or increase other costs in its present financial condition." It did urge the parties to continue collective bargaining and also recommended that the Public Utilities Commission be instructed to examine at the "earliest possible moment" the figures upon which the company based its claims. ¹⁰ This the PUC immediately refused to do, insisting that it was not an agency for investigating labor disputes.

There were to be three more boards appointed in 1948 (one by the Territorial Director of Labor? two by the Governor) before a settlement was reached. Together, these five boards add up to almost a textbook illustration of the futility of conducting mediation and fact finding by political or public spirited appointees who, whatever their merits, lack both the expertise to function in such capacities and the power to enforce their recommendations.

In November 1947, TWU filed a strike notice as required under the Public Utility Labor Act. When HRT petitioned the PUC in February 1948 for a fare increase, the Union intervened and, despite some reservations about salaries paid by the Company to its executive staff, supported the company's petition as a means of getting their wage increase.

The PUC, on May 24, authorized the fare increase (to a straight ten cents cash, eliminating the five tokens for 40 cents option) to become effective on June 1, 1948.

The union, meantime, in addition to the wage reopener and strike notice filed in 1947, served notice on April 30, 1948, that it was cancelling its existing contract as of June 30, the expiration date. The members, shortly before June 30, voted eight to one by secret referendum ballot to strike and on June 30 walked out at midnight.

The company immediately rushed to court claiming that a new "cooling off" period was required for the 1948 negotiations, separate and apart from the notice filed under the 1947 wage reopener. For the one and only time in its history, it also sought an injunction against the strike. The union claimed that what it did in 1948 was merely a continuation of the 1947 dispute. Judge Cristy granted a preliminary restraining order, sending the men back to work after 36 hours of strike and setting a future date for a hearing by Judge Moore on the granting of a permanent injunction.

Individual restraining orders were served on 675 strikers. At a union meeting to explain the situation, the men decided that all of them would comply with the letter of the court's order and appear in court at 9 a.m. when the case was to come up for hearing. The men then formed a marching column about two blocks long and, led by Rutledge and their attorney, Myer Symonds, marched through town, escorted by three motorcycle police, on their way from the union hall to the courtroom.

In order to avert another bus tieup, Judge Moore then set the hearings for two a.m. on July 8. At the first session, 400 members crowded into the courtroom with another 100 or so standing outside. At the next three sessions there were from 300 to 350 in attendance.

On July 24, Judge Moore upheld the company's contention that the 1948 negotiations were a separate dispute and replaced Judge Cristy's temporary restraining order with a preliminary injunction.

The union then filed a new strike notice, resumed bargaining on August 17, 1948, and soon reached another impasse. The Governor's Special Conciliation Board (the last of the five boards) on September 2 then suggested a "peace formula": six cents an hour raise for operators, five cents for other workers, both retroactive to June 1, 1948? operators to receive an additional increase (up to four cents an hour) if fare revenues in any month exceeded a specified sum. The union insisted that this was the same as the company's last offer and turned it down. The company accepted it. At midnight of the same day as the "peace formula" was proposed, the union struck.

At the Governor's insistence, negotiations were reopened on September 14 by got nowhere fast. The company rescinded its previous acceptance of the conciliation boards "peace formula," claiming that, because of the revenue losses due to the strike, it could no longer afford that increase in wages and that negotiations would have to start "from scratch" (the existing wage scale).

Early in the strike the union proposed that the entire dispute be submitted to binding arbitration. Its members circulated a petition calling for arbitration and gathered nearly 25,000 signatures. The Star Bulletin, in a rare support of a striking union's position, ran a series of articles showing that arbitration was the usual procedure for settling transit disputes on the mainland and urged HRT to accept it here. To all such appeals the HRT responded with a flat "no."

Finally, on October 9, after 36 days of strike, the union accepted the company's previous offer five and six cents an hour without, however, any retroactive pay to June 1, as was originally offered. This last provision was at the insistence of E.C. (Bill) Rinehart, the Hawaii Employer's Council rough and tough negotiator who knew when and how to apply the pressure. Thus the union after the strike received less than was available before the strike.

Why did the union capitulate when it did? Some of those who participated in the strike say their members had reached the limit of their staying power-this was their first postwar strike, not too well organized, and behind the scene was the Amalgamated, still alive after two NLRB defeats (see Appendix A), preparing to start a back-to-work movement.

Rutledge, in a statement to the press, said that the fight for decent working conditions, hours, and a living wage, was not over and that the incident should be considered only the first round.

The majority of the members of the union have learned much from their strike experience which will be put to good use in the future. (Star Bulletin, October 9, 1948)

Whatever hopes the TWU may have had for recouping some of the losses suffered in the 1948 strike in the next year were dashed by a combination of circumstances beyond the union's control.

HRT, for the second time in its history, showed a net loss for the year 1948 of $90,873, a loss that was soon rectified by a fare increase and uninterrupted operations for a long period of months but, at the time of negotiations, created some support for the company's position that a wage increase was not affordable. The most critical event impinging on the 1949 negotiations was the 177 day ILWU strike against the Hawai'i stevedoring companies. The main issue there was the union effort to reduce the wage differential between Hawaii and West Coast longshore contracts. This was undoubtedly the most economically devastating strike in Hawaii history. At its height some 25,000 people (not all because of the strike but it was difficult to differentiate), were out of work. Many small businesses had collapsed without the flow of materials and supplies from the mainland on which they depended. Others had reduced wages. There were shortages of many food and merchandise items. The most damaging impact of the strike, so far as the rest of the labor movement was concerned, was the extremely hostile environment created by both the strike and the steady barrage of anti-ILWU and anti-labor editorials carried by both Honolulu newspapers.

Rutledge, at the time of the longshore strike, was in one of his rare "warm" periods in his relations with the ILWU. In 1948 and 1949, ILWU's research director, Theodora Kreps, had presented the TWU's case before the various mediation and fact finding boards. Hotel Workers Local 5, the other Rutledge union, had donated the use of its meeting and mess halls to the ILWU strikers. In August of 1949, Rutledge, at the invitation of Harry Bridges, the ILWU International President, joined him in a two-man picketing of the docks in defiance of a circuit court order. The two marched together for some 35 minutes-their picture made the front page of the next morning's Advertiser.

The longshore strike had been on for about two and a half months when TWU opened negotiations in July, 1949, with proposals for a 23 1/2 percent wage increase and a 40-hour week with no cut in pay among its major demands. Rutledge, at about the time the Union's proposal was presented to the company, publicly asked the Attorney General to rule on whether a 24-hour "stop work" meeting would be considered a violation of the Public Utility Act which required a ten-day strike notice. He had previously been advised by the Territorial Labor Department that it would, but Rutledge never overlooked an opportunity to taunt the opposition and to provoke outbursts from the press.

The union's demands had nowhere to go except through the Emergency Board fact finding procedure established by the recently amended Public Utilities Labor Act (1949). This at least gave the appearance of activity while nothing was really happening. In the meantime, the press continued its drumbeat of opposition.

The Honolulu Advertiser, in a front page editorial on July 15, 1949, asked for a new law to prohibit aliens who were working in public utilities, shipping, transportation and communications from participating in a strike vote: "Never again should nationals or aliens be allowed to cast deciding votes to crucify American citizens."

The Star Bulletin in an editorial, "Not Much 'Percentage' in a Strike Today" (September 6, 1949), warned the TWU against calling a strike against HRT.

        A strike against the Rapid Transit Co. now would probably mean a long period of idleness for the busmen, and a return to work on a wage basis that will make them very unhappy.
        The Transit Workers should take a good look around at what's going on in the community.

The Star Bulletin has accorded Mr. Rutledge more than the usual space because he undertakes to show that this newspaper is uninformed. Maybe in some details-but not on Mr. Rutledge's tactics. We've seen them too often.

Finally, on September 29, the fact-finding board released its long-awaited report-what the Star Bulletin termed "a 50 page dilemma." Under the recently amended public utility labor law, the public member and the industry members felt that they were barred from making recommendations. The result was that each board member wrote a separate report merely reciting what they saw as the issues in dispute. The union was free but obviously in no position to strike five days after the report was submitted to the Governor.

Rutledge at this time, despite all his press statements regarding "stop work" meetings and possible future actions, faced a dilemma of which the press was apparently not aware. He was unable to call a meeting of his TWU members. The constant pounding by the press had effectively intimidated his own followers-the ILWU strike was still on at the time and the members, fearful that any meeting might result in strike action, just rejected all efforts to bring them together in formal session.

Rutledge then pulled an end run that at least momentarily saved the situation. In a meeting with George N. Voorhees, HRT Vice-Chairman, in the kitchen of Voorhees' home, agreement was reached on a five cent wage increase and some minor adjustments in other conditions in a new two-year agreement. The agreement was confirmed by a later formal bargaining session.

The members, who until then were fearful of more strike action to get any kind of settlement, tended to regard Rutledge as some kind of magician who had produced this totally unexpected bonanza. In fact, the settlement was probably only slightly above the average achieved by labor unions in 1949.¹¹

The 1950-1951 strike, despite a faulty start in negotiations, proved to be the most successful strike run against HRT up to that time. The union, through better preparation and organization of its forces, and in a more favorable economic climate than had existed in either of the two previous years, was able to wrest from the company wage gains well in excess of anything previously offered in negotiations.

Negotiations were opened in July 1950 under a wage re-opener clause in the existing contract and continued, relatively peacefully, over a four month period with agreement reached, subject to ratification by the union membership, on November 8, 1950. During these negotiations, many of the bitter after-effects of the 1949 longshore strike had been dissipated. The number of unemployed in Hawaii, for example, had dropped by more than 50 percent from 33,451 in January 1950 to 16,396 in October. There was also a sounder business climate based in large part on United States involvement in the Korean War which, among other things, brought greater federal income to Hawai'i.

The agreement reached by HRT and TWU on November 8 provided for:

1. a five cent per hour wage increase?
2. an insured pension plan to replace the long existing informal plan with the company agreeing to supplement wage rates by three percent to cover employees' cost of contributions to the insured pension plan, and
3. company payment of half of the employee cost of a medical plan.

HRT, over many years, had had an informal pension arrangement. Whenever a long service employee (whether in the bargaining unit or not) reached retirement age, the Board of Directors, depending on the situation as it existed at the time and taking into account whatever factors it then considered relevant, would decide on the amount of pension for the particular employee. This "rough and tumble" approach, not uncommon among many Hawaiian companies, was obviously unsuited to any sizeable enterprise and, sooner or later, would have to be replaced by a more formal arrangement with a definite pension formula. Whatever the original cost of an insured plan might be, it would in the long run save money for the company, especially when pensions for non-bargaining unit employees are covered by the same plan. It would also result in a generally more equitable and nondiscriminatory method of providing pensions. This was something the company very much wanted, and it was able to persuade the union negotiating committee to consider the proposal.

The difficulty for the union negotiators was that none of them knew anything about pensions and, as it later turned out, HRT members knew even less and were unwilling to buy something they didn't understand. When the negotiating committee was first presented with the proposed pension plan, they submitted it to a mainland research organization for analysis and comments. On the basis of that organization's report, they did agree to accept the plan but were never really able to explain it to their members. At the end of December, after the strike had been on for ten days, some 150 striking HRT workers, as reported by the Star Bulletin, were asked to raise their hands if they didn't understand the proposed pension plan-nearly all of the 150 men present raised their hands.

At a meeting of about 100 HRT employees on November 15, one week after the tentative agreement was reached, it was unanimously rejected. The men, as Rutledge explained in a letter to the company, wanted "no part" of an insured pension system and medical plan proposed by the company. "They want a substantial wage increase." To counter company claims that the meeting did not truly represent the HRT employees, the union later conducted a secret ballot vote. Of 165 votes cast, only 28 voted for the negotiated settlement.

From then until the final settlement on January 25, 1951-after a 35 day strike-the company and the union were engaged on a direct collision course. The company was trying to saddle the union with its previously negotiated settlement, the union was seeking to separate the pension plan out of negotiations and to raise substantially the wage increase.

After a brief and fruitless effort by the Territorial labor department to mediate the dispute, acting Governor Oren E. Long appointed an emergency fact finding board to investigate the dispute and make recommendations within 30 days. The members of the board were Lee Maice, executive director of the Hawai'i Housing Authority; Leroy C. Bush, president of Honolulu Construction & Draying, also a director of HRT; and Theodora Kreps, research director for the ILWU. In the meantime, the union made careful preparations for a strike. The ILWU, still in a friendly relation with Rutledge, loaned the TWU the services of Takumi Akama, an experienced sugar union strike leader from Kaua'i, to help coordinate the strike effort.

The fact finding board, 25 days after its appointment, on December 22, 1950, released a majority report which fully supported the company's position and a minority report which fully supported the union's position. The maintenance men, without filing any notice of intent to strike as required by the Public Utilities Labor Act,¹² just walked off their jobs. They were joined at midnight by the bus drivers. The strike was on at the height of the pre-Christmas shopping season. About a week after the strike started, the union formalized its action by a strike vote taken at the Lincoln School with 213 voting in favor of continuing the strike, 14 against (three ballots void).

Efforts to resume negotiations during the early days of the strike got nowhere with the union insisting that the sole issue to be discussed was basic wage rates. During this same time period, the union announced formation of a strike policy committee to oversee the activities of a number of subcommittees. Teams of strikers were sent out on house-to-house visits to raise money and food contributions and to explain the issues of the strike. Picket line committees were established and provision was made to provide free meals and barber services to all strikers. The setting up of soup kitchens, as one reporter noted (Advertiser, December 30, 1950), was a way of sending a message to the company since "soup kitchens . . . sometimes accompanied protracted strikes."

Finally, on the 20th day of the strike, after mounting pressure from newspaper editorials and the badly hurt retail merchants, the company did agree to resume negotiations solely on the wage issue. One week later, the Honolulu Advertiser in a front page editorial, "Give Public The Facts on Bus Strike Situation" (this was after the United States Immigration and Naturalization Service publicly revealed that Rutledge was not a U.S. citizen), injected a new note into the strike situation.

It is timely in this relation to ask why no official action is taken by the proper authorities to clear up the question of the citizenship of Arthur Rutledge. If he has no right to be here, or in a position of union leadership, why is he being protectedl If he is in the right the public has the right to know it. (January 20, 1951)

Finally, after 35 days of strike, agreement was reached on an immediate eight cent wage increase; an additional seven cents about six months later? upgrading of 53 drivers (an additional three cents); and elimination of third class mechanics (15 men, an additional 20 cents). In return for these wage increases, the company gained an extension of the existing contract from July 1, 1951, to January 15, 1952, thus minimizing the possibility of another pre-Christmas strike.

NOTES:

10. One of the three members of the emergency board was Henry Gonsalves, former President of
    the Transit Workers Union and, at the time, a business agent for the Teamsters. Despite
    Gonsalves' position, the Union rejected the report.
11. An exhibit prepared by the Hawaii Employers Council, introduced into the 1950 fact finding
    hearings, showed that of 140 contracts negotiated between October 1, 1949 and October 1950,
    65 had no increases and 75 had varying increases with five cents the most frequent gain.
12. By this time, even the state's attorney general had serious questions as to the constitutionality of the Public Utilities Labor Act because of its having been superseded by the federal Taft-Hartley, and no effort was ever made to prosecute the Union or any of its leaders for their failure to abide by the Act's notice requirements.

AUTHOR'S ADDITIONAL NOTES:

Events involving Honolulu transit workers (mostly strikes and negotiations) for the period from mid-1949 to about 1979 are covered in an unpublished type written manuscript, "Ass-Wy Hard" (That's Why Hard), by R. B. Sheetz and John E. Reinecke, both employed by the Teamsters. The paper, intended as a follow-up to the earlier "Up From Company Unionism", has been helpful in identifying significant occurrences and in providing the Union's view of what happened. Our approach, while utilizing much of the same basic information, uses very different emphases.

A Big Loss: 1948 Strike: The Transit Workers Union, in a brief filed with the Governor's Fact Finding Board, explained its view of the 1946 settlement:

... It was at that time and still is the contention of the Union that the wage adjustment effected December 1, 1946 was properly made to off-set a reduced work week and in most instances did not actually increase the take home pay of the Employees involved.

Rutledge testified before the Emergency Fact Finding Board that the Union had supported the Company's request for a fare increase (Transcript, August 3, 1948).

The Star Bulletin of September 3, 1948, carried a chronology of events leading up to the strike. The detailed happenings after that date until the settlement on October 9 were reported in both daily papers.

Union members who participated in the strike provided the analysis of why the Union capitulated when it did.

Kitchen Negotiations: The impact of the 1949 longshore strike on the Hawaiian economy is described in many books and articles. We have mainly relied on Paul F. Brissenden's article, "The Great Hawaiian Dock Strike" in the April, 1953, issue of Labor Law Journal.

George Kaisan recalled the situation in which Rutledge was unable to get his TWU members to a meeting. Rutledge is the source of the story about his negotiations with Voorhees.

The Big Win: The more favorable economic climate for 1950 negotiations is detailed in the Union's Statement of Position of the Transit Workers Union before the Governor's Emergency Board in late 1950.

The proposed new pension plan was analyzed for the Union by Clifford D. O'Brien of the National Labor Board; his analysis is contained in a letter of August 28, 1950, to the Union.

In every year except one (1949) from 1948 through 1952, TWU members had been involved in some form of strike action, ranging from a short weekend strike in support of a recognition strike by the newly organized inspectors, checkers and dispatchers unit of the Teamsters Union, to the 36 day strike in 1948 (see Appendix C). By now, Rutledge concluded, there must be some better way for the union to gain its objectives-one that would require minimum cost to the union and its members, would not greatly inconvenience the public, and would still inflict economic damage on the company.

About one month after 1953 negotiations were under way on April 30, Rutledge informed E. C. Rinehart, the Hawaii Employers Council negotiator for the company, that the union would employ a "new gimmick" in that year-a weekend strike. Thus if a settlement was not reached by May 9, employees would strike that weekend and thereafter would work only five days each week but would not work on Saturdays or Sundays.

On May 9 and 10, and for four consecutive weekends, employees scheduled for weekend work did not report for duty, except for one Sunday, May 24, at the request of a church group and again on Memorial Day to oblige a veterans association.

After three strike weekends, the company notified all employees that if they did not report for "scheduled assignments at the regular time" they would be laid off, not only for that day but also for another full day. When this failed to bring out the required number of employees, the company then announced, on June 5, that thereafter any employee refusing to work as scheduled would be suspended from work for a 15-day period. The union struck again on June 6 and 7. Two hundred and fourteen employees who refused to work on June 7 were told to remain away from work for two weeks and 38 more were similarly laid off after June 8.

The union's immediate response was to stage a demonstration at Iolani Palace where the Governor had his office. As a result of the company's suspension of striking employees, only 21 buses, instead of the usual 192, were operating on Monday, June 8. The union set up a picket line on Friday, June 12, and again on the following Saturday and Sunday, June 20 and 21. During this same period, a five man Emergency Fact Finding board was plowing through its usual round of exhibits, briefs and arguments. At the end of June, it issued its report, generally supporting the company's position.¹³

Finally, on July 17, agreement was reached on a new one-year contract granting a 40-hour week for all employees previously on 44 hours, with no loss in pay, five to eight cents an hour increase for other employees, and a medical plan for employees and their dependents. The union, despite the settlement, filed unfair labor practice charges with the NLRB because of the company's suspension of striking weekend employees. Once again, the union almost won its case, caused considerable consternation among Hawaii Employers Council leaders¹⁴ and was ultimately defeated by the NLRB itself.

Some eight months after the 1953 settlement was reached, the NLRB trial examiner found, in an intermediate report, that HRT by suspending certain of its employees because they "concertedly engaged in work stoppages" had discriminated in regard to the hire and tenure of employees thereby discouraging membership in the union. The company was ordered to cease and desist from such tactics but, because the suspended men had not made an unconditional offer to return to work, there was no back pay award. Thomas P. Gill, the union attorney, stated that the ruling made "legal and valid" the weekend walkout type of strike employed by the transit workers.

About two months after the intermediate report was issued (May 13, 1954), the president of TWU, David Naumu¹⁵, sent a letter to HRT president Edward DeHarne opening 1954 negotiations. Lest the import of the intermediate report be overlooked, Naumu wrote:

... if no agreement is reached (before the expiration date of July 14, 1954) we intend to strike in accordance with rights guaranteed under the NLRA. . . . which Act permits weekend strikes. We feel free at this time to engage in such weekend strikes because of your company's unsettled, unfair labor practices before the NLRB. . . . Please do not misconstrue our position. This is a strike notice of weekend strikes or other permissible strikes under the NLRA."

. . . part-time weekend strikes in which the employees engaged did not constitute ... the kind of concerted activity that was protected by the Act and that therefore the company, by suspending these employees, did not violate the Act.

The NLRB decision ended use of the weekend strike by transit workers-until it was revived again seven years later.

NOTES:

13. A minority of the Board (Father John A. McDonald, Superintendent of Catholic Schools, and
    the Reverend Harry S. Komono) in a separate opinion supported the union's demand for a union
    shop "or any modification of the union shop which will confer the added security the union is
    seeking." This was the first support by a third party of the union's position on the union shop,
    ultimately gained in 1956..
14. Hawaii Employers Council files for this period show that the Council sought and received
    divided opinions from outside counsel on the legitimacy of the weekend strike, issued bulletins
    to other employer groups in other cities urging that they join in amicus curae (friend of the court)
    briefs before the NLRB, filed an amicus brief on its own behalf.
15. Naumu in 1962 became manager of Wahiawa Transit after its purchase by Harry Weinberg. He then became strongly antiunion, succeeded in replacing Local 996 with an "independent" union which he controlled until Local 996 again won bargaining rights in August 1970.

AUTHOR'S ADDITIONAL NOTES:

Rutledge's informing Rinehart of the proposed weekend strikes is reported in a memo in Hawaii Employer Council files.

The details on actual weekend strikes are taken from NLRB decision In re Honolulu Rapid Transit Company . . . and Transit Workers Unions of Hawaii, Ind., Case No. 37-[A-77, December 16, 1954. 110 NLRB No. 244.

Faced with a situation of rising profits in the face of lower patronage and a smaller work force, the union asked for a substantial package: 25 cents wage increase, plus improvements in pensions and other benefits. Ultimately, after two and a half months of negotiations; several strike threats; and a one-day Saturday strike, agreement was reached on a three year contract with big gains for union members {see Appendix B).

In the wake of this settlement, HRT clerical workers who, in 1946, had voted for "no union" in the NLRB election, voted 23-0 out of 29 eligibles to be represented by the Teamsters Union.

NOTES:

23. The fourth negotiation was never completed. After a 60 day strike, the city formed its own transit company, Mass Transit Lines (MTL) which replaced HRT's bus system and eventually took over HRT property
24. These included PUC "show cause orders" and legal actions to have funds transferred by the company to Dallas Transit returned to HRT to return card advertising and bus charter operations from Honolulu, Ltd. to HRT, to halt proposed exchange of stock that would result in Honolulu, Ltd. becoming the parent company, and to not transfer any additional funds to Honolulu, Ltd. or Honolulu Scenic Tours.
25. t has been estimated that each one percent increase in fares produces a .2 to .33 percent decrease in ridership.

AUTHOR'S ADDITIONAL NOTES:

Union files, particularly minutes of negotiations and bulletins issued to HRT employees, plus newspaper stories, describe much of what went on during contract negotiations. The author participated in 1963 and 1966 negotiations; he was also a witness to many of the non-bargaining session encounters between Weinberg and Rutledge.

Weinberg's speech at the Linekona school is partially covered in union minutes; more detail is provided by Rutledge.

The PUC's temporary granting of the five cent fare increase is explained in Docket No. 1405, Order No. 1057, filed May 2, 1961. The permanent increase was granted in the Commission's Decision and Order No. 1061, filed August 16, 1961. Settlement of the dispute over the transfer of HRT funds to Dallas Transit is explained in Decision and Order No. 1090, filed December 20, 1961.

The estimated relationship between fare increases and ridership is taken from Joe Brady's "No Fare's Role in Mass Transit," American Federatiortist, May 1978.

Figures on bus ridership and HRT employment taken from company records.

The 1966-1967 negotiations resulted in the longest strike in the history of the Honolulu Transit industry --a 67 day ordeal that greatly inconvenienced the public, drastically affected the income of downtown merchants, drew strong editorial and verbal attacks on Weinberg by newspapers and public officials, and confirmed in the minds of many the ultimate need for municipal ownership and control of the bus system.

There were actually two sets of negotiations extending over a one year period before a settlement was reached. The previous contract expired on June 30, 1966. Some 10½ weeks later, a two day strike by the union ended with a most unusual interim contract. There were to be substantial gains for the unions-67½ cents in wage increases, improved pensions, health and welfare benefits, vacations, holidays, seniority-over a four year period, provided the HRT got a five cents fare increase within 60 days. The company also had the right to cancel the contract at any time between October 13 and November 11.

The union had never before, and would never again, agree to this type of a contingent contract, something that Weinberg had successfully employed in Scranton and Dallas. Apparently, the union as well as the company believed some kind of fare increase was in the offing. HRT filed an application for a fare increase just a few days after the settlement, and it had been more than five years since the last increase had been granted.

Negotiations then followed their more usual erratic pattern. HRT announced a wage cut; cancelled the contract; withdrew its application from the PUC? then backed down on its decision to cut wages; settled with the union for a continuation of the old contract? and reapplied for a fare increase. A month later, Weinberg again announced that the contract would be cancelled and that a ten cents wage increase due on March 1 would not be forthcoming.

What proved to be one of the costliest and most peculiar strikes in transit history started on March 1, 1967. The day before the strike began, Weinberg left for the mainland. Before leaving, he arranged for the strikers to use the HRT carbarn as their picketing headquarters, where the company served fresh coffee each day. Weinberg did not again appear in Honolulu until some 25 days later when he was summoned back to Honolulu by a phone call from Mayor Blaisdell, who was trying to get negotiations resumed. And even then stayed in town only for about four days, again left for the mainland, and thereafter was in and out as his presence was required. Apparently, he was determined to sit this one out until he got what he wanted --a PUC fare increase or, possibly, a purchase offer from the city although he denied that this was so.

When the strike started, Rutledge charged that HRT management was "bound and determined that the City should take over." (Advertiser, March 2, 1967)

A week later, the Honolulu Advertiser (March 8) editorialized:

It is unfortunate, but the impression of many is that HRT and the union are now in something that looks like a voluntary stalemate aimed at (1) forcing a fare increase and (2) pushing toward eventual City takeover of the bus company.

During the strike, both the City council and the State legislature considered measures that would authorize takeover of the bus system. The legislature later passed a bill giving the City the right to buy HRT. It was during hearings on that bill before the Senate Public Utilities Committee that Weinberg stated, in answer to questions about his wanting to quit the business that, "I am interested in running a bus company" and, "My buses are not for sale." (Star Bulletin, April 12, 1967)

Weinberg's hopes for higher fares were thwarted when the PUC, on March 24, announced that it had rejected HRT's request for a fare increase. The company, it claimed, had failed to show that it needed additional money to operate. In a formal order, issued about a month later, it detailed its findings. The company, in violation of a previous PUC order, had diverted funds received from car advertising, chartered bus service, and other miscellaneous revenues to its subsidiaries and had improperly charged certain expenses of its subsidiary companies to the mass transit system.

In response to anguished appeals from downtown merchants, some of whom reported as much as a 60 percent dropoff in sales, and the persistent prodding from both Honolulu dailies, Mayor Blaisdell continued efforts to get the company and the union back into serious negotiations. Governor Burns, at the union's request, asked Attorney General Kobayashi to attempt to mediate the dispute. When, in midApril, Weinberg proposed a new four year contract which hinged on a fare increase, the Governor publicly blasted the proposal as "a gross insult to the people of Hawai'i." (Star Bulletin, April 20, 1967)

Some movement in the long stalled negotiations developed after Leeward Bus Company, which normally operated in rural areas, arranged with the union (after PUC authorization) to provide emergency service on three major routes. That service started on April 18.

HRT then made two final efforts to rescue its faltering position.

It moved, in Federal Court, for a temporary restraining order to halt the Leeward Bus Company's interim bus service, as authorized by the PUC-a move opposed by both the PUC and the Teamsters Union. When the case came before Federal Judge C. Nils Tavares, he, at the company's request, gave it two weeks in which to bring in evidence of "actual collusion" between the PUC and the union, as charged by the company. "If I have to rule now," the Judge stated, "I would not grant any kind of injunction" (April 28, 1967). Before the two weeks were up, the strike was settled.

On the last day of April, HRT advertised for drivers and mechanics to apply for work on the next day. Some 80 pickets appeared before the company offices but not a single applicant showed up. An Advertiser story on May 1 noted that the ad was in violation of a new anti-strikebreaking law, signed by Governor Burns a little more than a week previously, in these respects: it failed to state 1) that a labor dispute existed at the time, and 2) the name of the agent placing the ad and the name of the client.

On May 2, Weinberg made a new offer: A 40 month contract with a total package price of about 90 cents, virtually everything that had previously been offered in negotiations without any strings attached (see Appendix B). The offer was accepted, ratified by the union on May 6, with buses in operation two days later.

The agreement, the last signed by HRT, represented a complete defeat for Weinberg, paid for at an exorbitant price by both the union and the public. Within a month after the settlement, HRT was back again before the PUC for a fare increase. He was again turned down.

One can only speculate as to what caused Weinberg's final capitulation. The questions persist: if he could offer a 90 cent package at the end of nearly one year of negotiations, why couldn't he have offered a less costlier package that the union would undoubtedly have accepted at a much earlier date? Had he merely miscalculated the resistance that he did encounter from the union or the PUC? Or had he just been worn down by the steady fire of hostile criticism from public officials, the press, and the public generally?

The possibility that the PUC, after the substantial increases agreed to in the final settlement, would now relax its rigid anti-fare increase position may have influenced his final decision to settle. Here too, the hostility that he had engendered from years of thumbing his nose at the PUC did not help his case.

AUTHOR'S ADDITIONAL NOTE:

The PUC's formal order denying the Company's fare increase application is Docket No. 1730: Decision and Order No. 1922, filed April 26,1967.

The post-strike HRT fare increase application was turned down in Docket No. 1730: Decision and Order No. 2203, filed March 19, 1968.

The negotiations (if they could be called that) which occurred after the expiration of the 1966-1970 contract on September 1, 1970, were just one part of the main show that was being played out at that time, namely the effort by the City to buy out HRT and develop its own bus operation.

There was general recognition by late 1970 of the inevitability of municipal ownership of the Honolulu transit system. This was in line both with local sentiment and national trends.

The 1966-1967 strike of 67 days had convinced public officials and both Honolulu newspapers that such costly disputes could be avoided in the future only if the transit system was operated as a public service rather than as a "for higher and higher profits" operation. This was something that Rutledge had advocated for many years-at least since the 1948 strike and throughout the 1966-1967 negotiations and strike. More recently since January 1969, he again urged the creation of a City-County transit authority as the solution to Honolulu's bus problems.

The trend toward publicly owned bus systems on the mainland had accelerated with the passage of the Urban Mass Transportation Act of 1964 under which the Federal Department of Transportation would provide up to two-thirds of the acquisition costs of bus systems by municipalities. Increasing operational costs and declining patronage had caused many bus companies to sell out to cities. There were about 25 such sales throughout the 1950s; 27 in the first half of the 1960s; and 51 in the 1965-1970 period. By 1974, according to one estimate based on statistics gathered by the American Public Transit Association in their 1974-1975 Transit Fact Book, publicly owned systems employed 84 percent of all workers in the industry, earned 86 percent of the operating revenue, and carried 90 percent of the revenue passengers.

As early as August 1970, the Federal Department of Transportation, in response to an inquiry, advised Honolulu Mayor Frank Fasi that Honolulu was eligible to receive two-thirds of the acquisition costs of HRT, Wahiawa Transport,²⁶ and Leeward Bus Company.²⁷ The total cost, not including Leeward, was later set at $10.4 million.

With public ownership approaching, all of the parties involved, HRT, the union and public officials each began maneuvers to position themselves so as to get the best possible deal for their interest.

From Weinberg's point of view there was nothing to be gained in paying more to HRT workers until the City took over, unless the additional costs were provided through a fare increase or by some other means.

In the summer of 1970 the PUC again rejected HRT's request for a five cents fare increase. The commission's chief auditor testified that the requested fare increase would double the Company's net income. In its formal order, that body stated that it would not grant any fare hike until the company raised wages, upgraded its equipment and services, and included revenue from its charter and tour business in its revenue base.

Later, in November of that year, Weinberg again went before the PUC, this time to ask for a ten cents fare increase until the City took over, as an emergency measure to halt declining revenues. Rutledge estimated that the ten cents increase was about five times as much as was needed to pay all the Teamsters wage demands. That request by HRT was also denied.

There were about three meetings between the union and HRT in the entire period between the expiration of the previous contract on September 1, 1970, and the end of the strike on March 1, 1971. The strike, more like a lockout, was practically forced on the union when HRT announced in late December that it would cut wages and fringe benefits for a total of about $1.15 an hour, effective January 1, 1971.

Before the actual walkout the Union had postponed announced strike dates three times-once, on September 1, the second on October 19, and then on November 18.

Earlier, in late August, in answer to a Weinberg statement that the company would have to cut wages by one dollar an hour, the union called a one day Saturday strike. Rutledge was quoted as saying, "Weinberg has the City by the throat. He's a ruthless businessman . . . [I]t appears that Weinberg is hell bent for a strike so the City will take over his bus line." (Advertiser, August 25, 1970)

Weinberg, in one of his rare meetings with the union in September, charged that that one day strike had cost HRT a lot of charter business.

The scheduled September 1 strike was called off after Mayor Frank F. Fasi and federal mediator, Reynold F. Hagist, intervened to get the parties together.

Just three days before the October 19 deadline, Mayor Fasi offered to use $40,000 out of his campaign funds (acquired over a series of birthday parties to finance his various electoral campaigns) to provide a one month, interim wage increase to HRT employees, if they would postpone their strike for one month. The union accepted the offer, effective October 19, the strike deadline.

The Mayor also appealed to the public to contribute funds for further wage increases so that the buses could keep rolling. The total response was meager --about $15,000 over several months.

The November 18 strike deadline was also cancelled in order not to inconvenience the public during the coming holiday season. Rutledge, it was clear, was trying in every possible way to postpone strike action. However, under mounting pressure from his members and, finally, faced with an announcement from RRT on December 30 of a pending wage cut, the strike was set for 1:30 a.m. on January 1, 1971.

The strike officially was to last 60 days, only seven days short of the 19661967 "longest strike." When the City-owned MTL buses started rolling on March 1, 1971, there were still over 100 drivers who could not return to work until more buses arrived from the mainland. Full pre-strike operations were not resumed until October. Thus, in terms of wage losses only, this strike was probably the most costly to Honolulu transit employees.

When the strike started, Weinberg assumed the role of the aggrieved party. He claimed, in a public statement:

We were willing to negotiate on the amount to be cut [in wages] but he [Rutledge] would not accept any reduction at all ... not even a penny. (Advertiser, January 4, 1971)

... is bound and determined to get us out on strike. It's a sort of strong arm tactic that the community and PUC will not go for-to get him more money because he has us out on strike. (Star Bulletin, January 1, 1971)

Seemingly unperturbed, Weinberg, between trips to the mainland, spent most of his time in Honolulu considering possible ways of profitably disposing of HRT to the City. He was in frequent meetings with the Mayor and kept in telephone contact with Rutledge, but there were no negotiations with the union committee.

Some relief to the stranded bus riders was afforded by the use of 13 buses from Leeward Bus Company on an interim basis, as in the 1967 strike. These buses, operated by HRT drivers, were not used until February 8 after two one-day strikes against Leeward over wage increases. There was a later two day stoppage in April over company payment of overtime.

With no movement in collective bargaining between HRT and the union, renewed efforts were being made to displace HRT by a publicly owned bus system. The Federal Transportation Department in August 1970 advised Mayor Fasi that the City was eligible for federal funds for bus purchases. Soon after, a transit consultant firm retained by the City (Alan M. Voorhees & Associates) recommended immediate purchase of HRT. That same firm estimated the value of HRT and Wahiawa as $6.4 million, a figure which Weinberg termed "ridiculous."

While still engaged in efforts to prevent a bus strike, the Mayor and the City Council, after some political jockeying on the procedure to be followed, did take a series of steps to prepare for the City takeover. These were the developments in late 1970:

1. September 14: Mass Transit Lines, Inc. [MTL], a transit management firm, was incorporated.
2. September 23: The City Council on final reading adopted an ordinance authorizing the Mayor to purchase HRT. The ordinance asked the PUC to determine HRT's value.
3. October 20: The Council voted $2 million for a down payment on HRT plus $1 million for purchase of new buses.
4. Early November: City officials were in Dallas to check on possible purchase of 50 used buses and in Pontiac, Michigan, for 17 new buses.
5. November 24: The Council approved $1.7 million for purchase of new buses.
6. December 28: Agreement was signed by the City, MTL and Teamsters Local 996 guaranteeing that when the City acquired HRT, all rights of workers represented by their union would be continued. MTL would recognize Local 996 as the bargaining representative and any unsettled disputes would be submitted to arbitration.

Three days later, Local 996 negotiated a one year contract with MTL. It provided for a 50 cents hourly increase in wages plus 15 cents in benefits. On March 1, 1971, MTL began operations with 67 City owned buses (See Appendix B).

PUC hearings on HRT's valuation started on March 8.

The $6.4 million estimate of HRT's value by the Voorhees consultant firm was based on the company's value as a "going concern" including current market values of physical property and intangibles such as "good will." The 1921 HRT franchise, however, specifically provided (Section 20) that in the event of purchase of HRT by the City, the amount to be paid for such purchase was to be determined by the PUC ,but:

. . . shall in no case exceed the actual cost of the physical property thereof, or the actual value of the tangible property so purchased. . . . The value of the franchise or good will or other intangible element shall not be considered in determining the amount to be paid.

Before the PUC, the City argued for a total valuation of $3.1 million for land and tangibles. HRT asked for $9.4 million including $1.2 million for intangibles.

On July 20, 1971, the PUC upheld, in essence, the City's position which was strictly in accordance with the 1921 franchise. The total valuation was $2,917,711²⁹, of which $970,704 went for land and buildings instead of the $6,143,900 claimed by HRT. Nearly two years later, on March 8, 1973, a unanimous Hawai'i Supreme Court upheld the PUC's valuation. In the meantime, HRT had, after the State Circuit Court rejected its move for an injunction, gone through five court proceedings up to the United States Supreme Court in a vain effort to halt the PUC proceedings.

Weinberg was bitterly disappointed in the outcome of the City's takeover of the bus system. Some 13 years later, he insisted that he had been given a raw deal by the City. In retrospect, he had really done very well. In addition to the profits enjoyed each year by HRT during Weinberg's control, HRT, through transfer of its depreciation reserve and earned surplus to Honolulu Ltd., provided the grubstake that enabled Weinberg to gain control of Dallas Transit and then, through Dallas of Fifth Avenue Coach, both of which produced large cash settlements that were then plowed back into further investments in Hawaiian companies. After the buyout of HRT by the City, Weinberg still owned and controlled the real estate and financial assets held by HRT Ltd. and Honolulu Ltd. HRT actually provided the basis upon which a large part of Weinberg's later fortune and huge land holdings were built.³⁰

For the union, municipal ownership of the bus system meant playing in a whole new ball game. There were many advantages in this new game. But the union and Rutledge, in the course of this game, also encountered many new problems.

NOTES:

26. Wahiawa Transport was a rural bus company with 36 buses, bought by Weinberg in January 1962, organized by the Teamsters and finally certified as the bargaining representative, after much resistance by Weinberg, on January 12, 1971. They were shut down by the strike after a futile five day effort to continue operations.
27. A privately owned rural transit firm with 140 buses, organized by the Teamsters in August 1969. This is the company that provided interim emergency service during the 1966-1967 strike and again, as will be seen, in 1971.
28. Examples: Mayor Fasi on day one of the strike, said he couldn't blame the bus drivers for striking: "It's a shame that a man of his [Weinberg's] wealth . . . and power in the community can come to the point where he completely disregards the needs of the people. . . . I hope he can sleep well nights."
    
    The Honolulu Star Bulletin, in a front page editorial on January 1, 1971: "These tactics reflect basically Mr. Weinberg's efforts to squeeze the last possible nickel out of an investment that already has earned him millions and millions of dollars."
    
    The Honolulu Advertiser, in an editorial on January 8, 1971: "Weinberg's concern for profits is understandable in strictly business terms. The tragedy is he seems to have no concern for the bus riding public he is franchised to serve."
    
29. There were some changes from the original City position in properties to be covered.
30. An account of Weinberg's financial maneuvers, if they ever could be disentangled, would probably require a full volume of its own. We may note, however, how through stock purchases and actual or threatened proxy fights, he did realize huge profits on many of his Hawaiian deals. At one time, HRT bought large blocks of stock in Amfac, Dillingham Hawaii Corporation, Maui Land & Pine, Alexander & Baldwin, C. Brewer, and Hawaiian Airlines. In early 1967, Amfac bought out his shares in that company for cash. As a special inducement, he was also sold, at modest prices, valuable real estate in Lihue and on Oahu. Also in 1967, Dillingham traded about $7 million in land for the $5.3 million in Dillingham stock that Weinberg had accumulated. When Dillingham, in 1983, went private, Weinberg had 1.3 million shares, much of it reaccumulated more than ten years after his original sellout, for which he reportedly received $32 million in cash. He also still held an interest in Dillingham's property division, which had previously been spun off as a separate company. Thus far, he has been thwarted in his efforts to gain control of Maui Land and Pine, in which he is still the largest outside shareholder. HRT's 1983 annual report shows that it then held $41.8 million of Alexander and Baldwin stock and $13.9 million of Maui Land and Pine. Weinberg has sold at a profit his holdings in Hawaii Corporation and Hawaiian Airlines.
            In April 1985, despite ownership of over 25 percent of Alexander and Baldwin's stock, he was defeated by the stockholders in an effort to win control of the Board.

AUTHOR'S ADDITIONAL NOTES:

Figures on trends in public ownership of bus systems and the impact of the Urban Mass Transportation Act of 1964 are found in two articles by Darold T. Barnum: "From Private to Public: Labor Relations in Urban Transit," Industrial and Labor Relations Review, October 1971, and later in "National Public Labor Relations Legislation. The Case of Urban Mass Transportation," Labor Law Journal, March 1976.

Weinberg's disappointment in the outcome of the city's takeover of the bus system was expressed to the author in a brief telephone discussion on March 1, 1984.

A fairly full account of Weinberg's financial activities in Hawaii to 1980 including HRT and other companies, is contained in Exhibit A, "Summary or Facts Relating To The Business History Of Harry Weinberg, 1958-1980," of Dillingham Corporation, Notice of 1980 Annual Meeting and Proxy Statement, issued at a time when Weinberg was threatening a proxy fight against that company.

Once the issue of narrowing the gap with West Coast transit companies was publicly raised, Rutledge felt that he had to meet that challenge. The union had originally asked for a $1.00 an hour increase plus a cost of living increase tied to the Labor Department's Consumer Price Index. In May 1975, Rutledge announced that the union had rejected a 90 cents an hour increase and would strike unless wages were hiked by $2.00 an hour. One month later, settlement was reached with the company on the basis of the largest wage increase ever granted by the bus company-$2.00 an hour in two annual installments plus other benefits (see Appendix B). Despite opposition by the Chambrella forces, the agreement was ratified by referendum vote, 561-552.

While negotiations were being carried on by Rutledge,³⁷ Chambrella's followers attempted some Rutledge-type moves against Rutledge himself. On March 1, 1975, about 35 of his supporters marched about one half of a city block to the second floor of Unity House, where Rutledge had his office, shouting, "Workers unite, make the union fight." They gave Rutledge's secretary a petition, with about 400 signatures, asking for a meeting with Rutledge to determine how negotiations were going with MTL. Rutledge did not bow to pressure as easily as did some of his adversaries; he refused to meet with what he termed "a mob."

Rutledge recognized that in this election he faced strong opposition and that he would need all the time he could get to rally his forces and prepare his own campaign. Under the local's by-laws, the Executive Board sets the time and place of the election, and Rutledge, who controlled the Board, was in no great rush.

Four months after the nomination of candidates, on May 18, a meeting of Local 996 shop stewards, by a vote of 108-6, adopted a resolution requiring the local: 1) to support efforts of the Local 996 administration to conclude negotiations (about 50 percent of all 996 members were then working under contracts that were open for negotiation) at the earliest possible time; 2) to support a plan for education of all shop stewards on new provisions of union contracts; 3) to hold an election not less than 30 days thereafter; and 4) to favor a merger of Local 996 and Local 427. The latter local had been set up in January of 1971, as an offshoot of Local 996, under the leadership of Tony Rutledge, Art's son. It was composed of several former 996 units, all service units (laundries, car rentals, small shops, etc.), with a total of 400-500 members.³⁸

At about this same time, there was a flurry of sensational news stories connected with the forthcoming election, none of which were ever satisfactorily explained. Two bus drivers, both of whom were on the Chambrella slate claimed that on May 18 they were the victims of shooting and tire slashing. Richard Lewis claimed that five shots hit his cars, boat and home early Sunday morning. John Young, another driver, said that four tires on his Chevrolet truck had been slashed during the night.

This was shortly after Lewis and Young, together with Chambrella and another supporter, had been ordered to face trial on misconduct charges because of their "disorderly and disruptive manners" during a negotiating session with MTL.

Just one day after the news story of the attacks on Lewis and Young, Rutledge reported that a shot had been fired through the sliding door in front of his home at about 10:45 p.m.; nobody was home at the time.

On that same day, Rutledge charged:

It has been known to members of our staff and many of our shop stewards that there are alarming outside influences who are trying to take over-by intimidation and threats of violence-this union. (Advertiser, May 20, 1975)

. . . Arthur A. Rutledge testified that he lost at least two business agents who "told me straight that they'd like to live instead of die." He said the agents left the Teamsters after being told by certain powerful people . . . that the boys are taking over.

Efforts to discipline Charnbrella and Lewis for their alleged misconduct during negotiations were thwarted by Federal Judge Samuel P. King who enjoined the local from placing them on trial. At the same time, Judge King dismissed a suit brought by Charnbrella to compel a union election. Only the U.S. Labor Department, he said, could compel the Teamsters to conduct an election. That was where Chambrella finally got some action when he filed a complaint with the department some three months later. Rutledge tried one more move to delay an election. At an MTL unit meeting on July 1, 1975, he called on the members to back a move that would place the local under International trusteeship. Rutledge later said that the motion calling for trusteeship had passed, but both a reporter who attended the meeting and several members who participated said that the motion had failed. In any event, no further efforts to have the International move in were made.

In late October, the Labor Department, acting on Chambrella's complaint and a request for more time by Rutledge, approved a two month extension of time in which the department would be required to seek court action to force the holding of an election. At a special membership meeting held on November 23, at the urging of the Labor Department, the two slates were again nominated.

At an election held on January 9, 1976, supervised by the chairman of the Hawai'i Public Employment Relations Board, Chambrella had 784 votes against 764 for Rutledge. All of the other candidates on the Rutledge slate won by substantial majorities. For various reasons, some 566 votes were not counted.

For the first time in his thirty-seven years as a union official it appeared that Rutledge had lost a union election, but that appearance was only temporary. An appeal to Judge King resulted in his impounding of the ballots, later releasing them to the U.S. Labor Department for a recount.

The new count by the Labor Department, on February 16, showed Rutledge with a 21 vote margin over Chambrella-1,016 to 995. The count this time included nearly 500 challenged ballots that were not included in the earlier count.

In view of the closeness of the final vote and charges filed against Rutledge of improper election activities, it was agreed by all parties to hold still one more election to be supervised by the U.S. Labor Department. At this election, held on May 15, 1976, Rutledge defeated Chambrella by a 206 vote margin-1,552 to 1,286. All other incumbents on the Rutledge ticket were re-elected to office.

One month later, the Labor Department issued an official Determination stating that the "probable" violations of Title IV of the Landrum-Griffin Act had been remedied by the supervised election conducted on May 15, 1976. For the time being, and some 18 months after nominations for union office were first held, Rut-ledge had beat off an attack on his leadership from within the local. But there was still the attack being mounted by other unions that had been going on during the election campaign and continued for a long time after.

NOTES:

32. Li'i had limited contact with his own father during his childhood and youth. His mother died in giving birth to him (the 25th child she bore) and he was raised by his grandparents. Li'i completed grade school, dropped out of Kamehameha, a school for Hawaiians only, in the first grade after he was disciplined for some infraction of the rules.
33. Li'i held a certificate as a merchant seaman since the age of 17.
34. This was the last discussion held between the two. On May 6, 1977, Li'i was shot to death in his union office by two members of Henry Huihui's gang. Huihui, indicted for racketeering, later turned government witness and informed against his own men.
35. The union lost the case in an arbitration hearing but then filed a charge with the National Labor Relations Board. Four years later, the NLRB awarded Richardson's reinstatement and back pay to the date of his firing.
36. No major contract in private or public employment in Hawai'i, to this day, has an escalator clause—a result brought about by the solid and determined opposition of the Hawaii Employers Council, the negotiating agency for most Hawaiian industries, and the state government. Rutledge, on many occasions, has told his MTL members that they could strike, if they so decided, for an escalator clause, but warned them that it would be a long and grueling fight with little chance of success. The members never chose to do battle on that issue. On the final day of the 1975 settlement, June 10, 1975, the company offered an additional 25 cents across the board wage increase in each of two years in exchange for the union's dropping of its proposed escalator clause.
37. As a result of internal arguments between Rutledge and Chambrella forces within the negotiating committee, the committee agreed in writing, with three members opposed, to authorize Rutledge to get the best deal possible from the company and submit it to them.
38. The actual merger didn't occur until 1978, just before another local election. By that time Local 427 had about 800 members.
39. About nine years later, Henry Huihui, reported gang leader who became a government witness after pleading guilty to two murders and racketeering charges, reportedly told government officials that he had been part of Wilford "Nappy" Pulawa's crime organization and that, in the early 1970's, Pulawa considered having Arthur Rutledge killed as a means of taking control of the union. Others in his organization thought the better way to get rid of Rutledge "would be to back another candidate in a union election. They would do this by providing an opposition candidate with 'money and strong-arm type support' ". According to Huihui, nothing was ever done by Pulawa about Rutledge. Years later, ". . . members of a crime organization led by Alema Leota warned him to stay out of the way of Leota's own union takeover attempts."
          We have no way of determining the truth or falsity of any of these claims nor whether any of these alleged efforts by "crime organizations" took place at the time of the union elections. Over the years, several union staff people did receive anonymous telephone threats for a variety of reasons, some were contacted by outsiders seeking information about Rutledge, but definite criminal involvement in Teamster affairs has never been established.

AUTHOR'S ADDITIONAL NOTE:

Background information on Josiah (Joe) K. Li'i, his feelings and attitudes, mainly provided by his widow, Donna Li'i. The author also developed impressions from having worked with Li'i over a period of several years.

Events surrounding all union elections in the MTL period were fully described in both Honolulu newspapers. Union files also have fairly complete information on these elections contained in correspondence, minutes of meetings, bulletins issued by the contending parties, and legal documents.

In the midst of 1975 negotiations and the heated election campaign, Rutledge and the MTL Teamsters suddenly found themselves confronted with a new threat to their continued existence, this time from two other Hawaiian local unions-the Hawaii Government Employees' Association, Local 152 (HGEA), of the American Federation of State, County and Municipal Employees (AFSCME), and a sister local of the same international, United Public Workers, Local 646 (UPW).

Under the Hawai'i Public Employment Relations Act, enacted in 1970, all public employees (state and county) are divided into 13 bargaining units with one union to be elected and certified as the exclusive bargaining representative for each unit. The units are state-wide occupational groups (e.g., nonsupervisory blue collar workers, blue collar supervisors, white collar supervisors, professional and scientific, etc.) cutting across agency lines. As new agencies or departments might be added, the employees thereof are slotted into the particular appropriate units.⁴⁰

HGEA, in a petition filed with the Hawai'i Public Employment Relations Board on April 5, 1975, asked that the Board include MTL employees within certifications establishing HGEA as the bargaining representative for Unit 2 (supervisory blue collar); unit 3 (nonsupervisory white collar); unit 4 (supervisory white collar); and unit 13 (professional and scientific) on the ground that they were public employees. Some six weeks later, HGEA filed another petition for a Declaratory Ruling as to the status of employees in these units. These employees, HGEA claimed, should come under the state employment collective bargaining law because of the enormous control the City exercises over MTL operations.

The UPW then intervened in the proceedings, claiming that bus operators and maintenance employees, the largest group of MTL employees, should be slotted into Unit 1 (nonsupervisory blue collar) for which they were the certified bargaining representative. Had HGEA and UPW been sustained in their positions, all MTL employees would have been split into five different state-wide bargaining groups without ever having been consulted or given an opportunity to vote on their preferences. David Trask, HGEA executive director, explained to his members his very literal interpretation of the law.

      If these workers are government employees, then they should follow the law that says they belong in the units that are already certified by an election.
      Your director has never spoke [sicj to anybody . . . who works at MTL.
      ... If HGEA loses this case it loses. However, if we win and the workers are government employees, there is no problem. They are going into the units where they are supposed to belong according to the law.

Final resolution of the representation issue took over seven years, as the case wended its way through HPERB, then to the U.S. National Labor Relations Board (NLRB), back to HPERB, to the Hawai'i Employment Relations Board (HERB), to the Hawaii Circuit Court, again back to HPERB, and then, for a final decision, to the Hawai'i Circuit Court. At each step of these involved proceedings, the Teamsters were joined by MTL and the City of Honolulu.

Rutledge's major objective from the start of these proceedings was to retain MTL employees as a single bargaining unit and to seek certification, whether by a U.S. or State board, of the Teamsters as their bargaining representative.

Within seven weeks after HPERB started its hearings on the Declaratory Ruling petitions, those hearings were suspended in order to give the Teamsters an opportunity to seek certification by the NLRB. Nine months later, on April 26, 1976, the NLRB dismissed the Teamster petition on the grounds that MTL was an instrumentality of the City and County of Honolulu and thus an employer exempt from the provisions of the National Labor Relations Act.

The NLRB decision seemingly supported the HGEA position, but any celebration on that score was very premature.

Thwarted at the national level by NLRB's dismissal of their petition, the Teamsters then filed a petition in June of 1976 for an election with HERB, the state agency authorized to handle such matters for companies not covered by the NLRB or the State's public sector bargaining law, HPERA. That agency held hearings and expressed willingness to proceed. But before they could act, they were stopped cold by a Circuit Court injunction that HGEA had sought.

Throughout the hearings and in further proceedings before HPERB, HGEA reiterated its constant theme that "no elections are required."

As the HPERB hearings progressed, it became apparent that converting MTL employees into "public employees" would entail considerable costs to the City. Under a provision {Section 13c) of the Urban Mass Transportation Act, which provided subsidies to the City to operate its bus system, the City would be held financially responsible for any obligations that might result from the worsening of employee rights and benefits.⁴¹ If, for example, the collective bargaining contract with MTL were wiped out, it was estimated that at least 250 MTL employees might be entitled to severance pay ranging from $2,027 to $11,930 each. To provide pension rights equivalent to what MTL employees were getting from their existing pension plan, according to an estimate provided by the actuaries for the State Retirement System, would require $3 million per year for approximately 39 years. HPERB, on November 1, 1977, dismissed the petitions filed by HGEA and UPW. In its decision it ruled that:

Although MTL, Inc., is an instrumentality of the City and County of Honolulu and its employees are, in fact, employed by the City in the operation of its public bus system, said employees are not, at this time, "public employees" within the meaning of Chapter 89, HRS. Only the legislature or the City Council of the City and County, on the facts in this case, can make them public employees for purposes of Chapter 89 [HPERA],

. . . their unique history as former HRT employees, the failure of government to convert them to full fledged government employee status when HRT was acquired, the separate and distinct collective bargaining status they have occupied for years, the presence of the nominal corporate employer, the separate and distinct work regulations under which they function. These workers are hybrids and this Board believes that this hybrid status creates a barrier to their inclusion in that group of employees properly covered by Chapter 89, HRS.

The Board's decision, although ultimately upheld, did not immediately settle the issue of who was to represent MTL employees. There were to be four more years of litigation through the Circuit Court and HPERB before a final decision was rendered.

HGEA and UPW appealed the Board's decision to the Circuit Court. Judge Robert Won Bae Chang, on May 15, 1979, sent the case back to HPERB to determine whether the City's receipt of federal funds under the Urban Mass Transportation Act would be jeopardized if MTL employees were held to be public employees under the Hawaii Public Employment Relations Act. Section 89-20 of that Act held that if any provision of Chapter 89 (HPERA) jeopardizes the receipt of any federal money, the provision shall be deemed to be inoperative. The Board was also directed to make findings as to whether the application of Chapter 89 might adversely affect rights and benefits of MTL employees to the extent that the Secretary of Labor could terminate federal funds.

The Board, after a hearing on these matters issued its new decision in January 1981, in which it concluded that:

... it can find no present grounds upon which the Secretary of Labor could deny federal funds, and therefore the Board cannot conclude that jeopardy of federal funds exists.

Judge Chang, in a little publicized and well-reasoned decision, issued on December 9, 1981, completely upheld the Board's original decision. A literal construction of Chapter 89, Chang held, "wholly ignores the unjust consequences that would result" if MTL workers were deemed to be "public employees." They would lose their right to select an exclusive representative of their choice "and would suffer a detrimental dilution" of "their special interests and demands as transit workers" because they would be placed in bargaining units with nontransit workers. They would suffer financially because of lower Civil Service wages, inferior pensions, medical and dental benefits. Lastly, the scope of items the MTL employees could bargain for would be restricted. They:

. . . could no longer negotiate on classifications, classifications, pensions, health benefits, retirement benefits. Also their right to strike, as public employees would be much more limited than as private employees.

. . . could [not] have intended to deprive these employees of the significant interests in their bargained for rights and benefits which they have secured for themselves over the years.

Seven months after Judge Chang's decision, Rutledge reacted quickly and firmly to what he saw as a possible entering wedge for HGEA to gain members among MTL supervisory employees. Roy A. Parker, head of the City Department of Transportation Services, on the occasion of a renewal of MTL's contract with the City, proposed that the City, for the first time, have direct control over salaries and benefits for non-bargaining unit employees (namely supervisory personnel). The proposal might have been made for any number of reasons, but Rutledge saw it as a possible new threat, and in collaboration with MTL itself, was quick to protest. The proposal was ultimately withdrawn.

NOTES:

40. The blue collar workers, for example, would go into Unit 1, covering all state-wide blue collar employees; the blue collar supervisors into Unit 2; nonsupervisory white collar workers into Unit 3, etc. HGEA, since the units were first established, has been the certified representative of all white collar workers (other than school teachers and college faculty) in seven separate units. UPW has been the representative of all blue collar workers (other than firemen and police officers) in two separate units.
41. A condition of providing funds to any local public body is that fair and equitable arrangements are made, as determined by the Secretary of Labor, to protect the interests of employees involved. Such protective arrangements include: 1) continuation of pension rights and benefits; 2) continuation of collective bargaining rights; 3) protection of individual employees against a worsening of their positions; 4} assurances of employment to employees of acquired systems and priority of reemployment if employees are terminated or laid off; 5) provision of paid training or retraining programs.

AUTHOR'S ADDITIONAL NOTES:

A detailed summary of the various legal actions that culminated in Judge Chang's decision disposing of petitions by HGEA and UPW is reported in his "Statement of the Case" in his decision of December 9, 1981. Hawaii Government Employees Association Local 152, AFSCME, AFL-CIO, Petitioner Appellant vs. Mack H. Hamada, Chairman, Hawaii Public Employment Relations Board . . . and MTL Inc., Frank E Fasi, Mayor of the City and County of Honolulu; United Public Workers, Local 646, . . . Hawaii Teamsters, Local 996 . . . and George Kaisan and Arthur Ohelo, Intervenor Appellees, Civil No. 53212 and Civil No. 53221, On the Circuit Court of the First Circuit, State of Hawaii.

The most significant legal decisions, in addition to the Circuit Court decision of December 1981, are: NLRB. MTL Inc. and Hawaii Teamster & Allied Workers, Local 996, 223 NLRB No. 157, 92 LRRM 1029 (1976); HPERB. In re Hawaii Government Employees Association, Local 152 vs. Frank E Fasi. 1 HPERB 774 (1977); HPERB. In re Hawaii Government Employees Association Local 152 vs. Frank Fasi. 2 HPERB 635 (1981).

The quotation from David Trask appears in a column, "The Steward's Steward" of the union's publication Public Employee, June 20, 1975. Rutledgc's concern over the attempt by HGEA and UPW to take over MTL employees was expressed in letters written to the International and to the Western Conference of Teamsters at the time. Estimated costs for severance pay and pension benefits, if MTL employees became "public employees" are provided In a mimeographed paper, "The Bus: A Report Examining Alternatives For Management" prepared by the Office of the Managing Director, January 1976.

The events of 1975 in which Rutledge's leadership first faced organized opposition foreshadowed the pattern of union politics that was to prevail for the next nine years. There was an anti-Rutledge slate, or slates, in each of the three local union elections that occurred after 1975 (1978, 1981, 1984). The results of each of these elections was protested by one of the losing candidates, but the slow pace at which the federal bureaucracy moved in such matters reduced these protests to meaningless rhetoric. While the federal district court was considering motions based on protests of the 1981 election (which in turn was held under Department of Labor supervision on the basis of a stipulation settling the 1978 protest), the union proceeded with its 1984 election in which Rutledge received the largest plurality (58.1%) of any of these "1975 and after" elections.

The opposition to Rutledge in union elections spilled over into the collective bargaining area so that in each negotiation, Rut-ledge, in addition to the expected opposition from management, had to deal with a constant sniping from within his own ranks. Throughout these extended encounters (and they were deliberately extended by Rutledge in order to steer clear of public employee bargaining going on at the same time) there was a constant stream of mimeographed bulletins to MTL members, usually unsigned, criticizing Rutledge's handling of the situation. These criticisms were often vague, general admonitions to "encourage our present union leadership to settle a GOOD CONTRACT as soon as possible . . ." or complaints about the length of time involved in getting a settlement, or occasionally objections to specific negotiated features. Despite the opposition, each settlement received overwhelming membership approval in secret ballot ratification votes.

Each new round of talks required renewed efforts to prove again that transit workers were not public employees, at least for purposes of collective bargaining, as had previously been determined by the Hawai'i Public Employment Relations Board and affirmed by the Hawai'i Circuit Court. Management, at each opportunity, sought to tie transit worker gains to patterns established in public sector negotiations. Rutledge, by a combination of frequent strike threats (a tactic not readily available to these other unions) and repeated contract extensions, was able to reach much better settlements than those of any public employee union. His settlements, often reached from seven to as long as 11 months after the previous contract expired, generally, except in one instance, provided for gains to be made retroactive to the date on which the new contract should have been effective.

There was one other significant development in these "post-1975" negotiations: the emergence of Tony Rutledge, Arthur's son, as a negotiator in his own right. He participated in all of these negotiations, first as a member of the committee, but by 1984 as lead negotiator, with his father assuming the role of back-room consultant and advisor.

After the May 1976 election, held under Labor Department supervision, Michael Chambrella participated in three more elections against Rutledge. He reached his peak strength in 1978, when he trailed Rutledge by 138 votes (1,446 against 1,554), but thereafter his following dwindled. With the entry of another anti-Rutledge candidate, John K. Keli'iholokai, in the 1981 and 1984 elections, he ran a poor third in both of these contests. In the last election in 1984, Chambrella received a mere 13.3 percent of the total vote.

In June 1978, the Local 996 Executive Board voted to bring Local 427, the Miscellaneous Service Workers Union, back into Local 996, a move that had been discussed but not acted upon three years earlier. This was just about seven years after Local 427 was first split off from the large local in order to facilitate setting up a joint council, a type of administrative unit that carried more weight with the International. The reuniting of the two locals, done in accordance with procedures established by the International, brought back nearly 800 members, most of whom could be counted on to support the Rutledge slate in the election held later that year.

This merger action was a major reason for Chambrella's protest against the election to the International. He also claimed to have been misled as to the mailing dates for ballots. A committee of two International officials (Vice-President George Mock and Earl D. Bush, General Organizer) held hearings in Honolulu in February 1979 and concluded that the protest should be denied because, ". , . the protestors failed to establish that the Local Union had not conducted its election in accordance with the provisions of the International Constitution, Local 996 Bylaws or applicable federal law." The committee's report was later upheld by the International Executive Board.

Chambrella's 1978 campaign appeared to have gotten off to a bad start. Within two weeks after his slate was nominated at a November meeting, three members of the slate dropped out, "apparently because they were scared, or for some other strange reason," (Star Bulletin, November 21, 1978)⁴² according to Chambrella --an intimation of a charge that was never documented. Thereafter, these vacancies were never filled and the entire Chambrella slate consisted of four bus drivers.

The campaign against Rutledge consisted mainly of mimeographed leaflets containing broad sweeping charges: "End The Do-Nothing Rutledge Dictatorship" and "Bring Democracy To Your Teamster Local 996." Promises made by the Chambrella team included, "regular meetings of membership," a "first class training program for all shop stewards," a "copy of the constitution and bylaws to every member." "Retirees," it was charged, "were eating down at the Salvation Army." Another claim was that Rutledge treats "his own staff like Scrooge." The staff lacked union representation and had no pension plan although Rutledge himself had a "lucrative" one.

The Rutledge camp levelled a charge of "financial irresponsibility" against Chambrella. In April 1966, according to a leaflet issued by them, Chambrella had filed for bankruptcy, leaving six co-signers, all MTL employees, on a loan from the Credit Union to pay $7,084.98 by garnishment of their wages. Another leaflet, signed by a Rutledge appointed business agent, claimed that Chambrella ". . . has never in his life negotiated a contract on his own."

One other move against Rutledge made newspaper headlines. In early December 1978, three weeks before the election, Chambrella joined five others (four members of the Hotel Union and one MTL employee) in petitioning the Court to place Unity House, the entity that held real estate owned by the Teamsters and the Hotel Union, in receivership and to keep Rutledge from having anything to do with the organization. Among other things, the petition charged that Rutledge had personally appointed Unity House directors and officers without any annual meetings or assent of members; that he had borrowed $25,000 from Unity House in 1964, paid no interest until 1977 and had not repaid any of the principal; and that he had used Unity House assets to enhance a personal real estate investment in Windward Partners. Rutledge denied the charges, said that he did borrow $25,000 but had repaid it with interest a year ago, and that there were reasons for not holding elections of officers and directors.

About seven years later, on November 8, 1985 Circuit Court Judge Richard Au found in favor of Unity House and that Rutledge had not violated his fiduciary duty. The decision was immediately appealed to the Hawai'i Supreme Court. The airing of these charges against Rutledge just before the 1978 local union election undoubtedly cost him votes in that election. The election, conducted by the League of Women Voters, who were to conduct all local union elections and ratification votes thereafter, was a complete sweep for the Rutledge slate, but Rutledge himself received fewer votes than any other winning candidate.

After the International Executive Board rejected his protest, Chambrella then filed a complaint with the United States Department of Labor, charging that the local discriminated against some candidates and used its resources to favor the candidacy of incumbent officers in violation of federal law. The Labor Department, on the basis of investigation that found "probable cause" to uphold these charges, then filed a lawsuit against the Union in July 1979.

Nearly two years later, that lawsuit was settled by a stipulation between the Labor Department and Local 996. Without admitting any violation of federal law, the Local agreed that the next election, to be held in November and December of 1981, would be conducted under the supervision of the Department. The stipulation was filed in U.S. District Court, with the Court to retain jurisdiction until the election results were certified and the Court entered an order declaring such persons elected. There were two anti-Rutledge candidates in the 1981 election. John "K." Keli'iholokai, who was the Vice-Presidential candidate on the Rutledge slate in 1978, now decided to run against Rutledge and Chambrella. His campaign theme stressed the need for better servicing of contracts. With the anti-Rutledge vote split, Rutledge won easily with 1,276 votes {45.4 percent of ballots counted) against 824 for Keli'iholokai and 690 for Chambrella. Left uncounted were some 230 challenged votes cast by recently organized hospital workers, most of which would probably have gone for Rutledge.

Again, there were protests against the election-this time because shortly before the election, Local 996 had printed 7,500 copies of a glossy anniversary album, Road to Dignity; Forty Years of the Hawaii Teamsters, that featured Rutledge's leadership of the Local during that period. The album was dedicated to John Reinecke, the former Teamsters' Research Director who had recently died. According to a motion for summary judgement declaring the 1981 election null and void, filed by the U.S. Secretary of Labor, 1,100 copies of the album had been placed in MTL offices and 2,781 copies had been mailed to Local 996 members.

That motion was still pending when the 1984 election was held. Again, Rutledge faced opposition from both Johnny "K" and Chambrella. This time, he won by the largest margin ever, with a clear majority (58.1 percent) over both of his opponents. Keliiholokai immediately protested the "conduct and outcome" of the election with the International.

In that same election, Tony Rutledge, in his first race for elective office in Local 996, polled 1,662 votes (62.5 percent) of ballots cast, the largest total polled by any candidate. Young Rutledge faced only one opponent, the other officer candidates all ran in three candidate contests.

On November 15, 1985 Judge Harold M. Fong of the U.S. District Court for the District of Hawai'i ordered a new election based on his findings that, 1) the union, in changing the timing of nominations and elections, had failed to provide the required thirty-day period before the election, thereby foreclosing the challengers from a meaningful period to complain; and 2) union money had been used for a survey and report that was prepared and used for the promotion of the Rutledge slate in the election. The judge's order was in response to a motion filed by the U.S. Department of Labor as the result of a complaint made by John Keli'iholokai, one of the two candidates who lost to the Rutledge slate in November 1984.

In the court-ordered election, supervised by the U.S. Department of Labor, the count of the mailed ballots on March 12, 1985 showed a complete victory for the Rutledge slate. The results for the presidency of the Local were as follows:

Rutledge appeared, at last, firmly entrenched in the leadership of Local 996 through 1987.

The one dollar an hour wage increases won in 1975 and 1976, the highest in the history of the transit system, substantially narrowed and in many cases eliminated the differential between Honolulu wages and those paid by similar mainland operations. Gains negotiated after 1975, although on a more modest scale, compared favorably with what was being negotiated elsewhere and generally exceeded other settlements made in Hawaii. These "post 1975" settlements, in addition to wage increases, included significant fringe benefit improvements in such areas as pensions, medical and dental benefits for retirees, sick leave pay, and a group legal services plan (see Appendix B).

In each of the four negotiations that occurred after 1975, Rutledge successfully resisted management's efforts to limit MTL gains to patterns established by public employee unions. Rut-ledge's main tactic in avoiding such tie-ins was patience. He never felt obliged to conclude negotiations by a contract's expiration date and, if, as frequently happened, an expiration date did not appear to be the "right time" for a settlement, he was perfectly content to sit back and wait for a more favorable time despite pressures from management and from within his own ranks. The "right time" for a settlement in this period was a time as far removed as possible from public employee negotiations so as to avoid any association in the public's mind between the two. The "right-time" might also be when other conditions as, for example, a recent fare increase (in October 1979), or a one day slowdown (October 1981), or a strong strike vote helped to create a propitious climate. That this waiting-game approach succeeded is shown in the following summary of relevant data regarding these four negotiations.

The unusual success achieved through use of the "waiting-game" tactic failed to deter Rutledge's critics from frequently faulting him for failure to reach settlements by the expiration date of the previous contract. In 1979, an anonymous leaflet circulated among MTL employees charged that Rutledge "failed to meet the February 28 deadline." Again, in 1984, another leaflet criticized the settlement, in a period when the "give back" and other concessions were fairly common, because it took 11 months to negotiate the contract, and also because the union had given up six months of retroactive pay.

The rank and file members by overwhelming votes, in secret ballot referenda, as high as 91 percent in 1981, ratified each of these settlements. The smallest ratification vote, about 68 percent in 1984, probably represented a reaction to the six months loss of retroactive pay. That only 120 members even showed up at the MTL unit meeting specifically called to discuss possible strike action, two and a half months before the settlement, indicated a reluctance to consider more militant action.

NOTE:

42. Immediately after the election, Rutledge filed a Circuit Court libel suit against Chambrella and ten others for this and other statements. Apparently, the suit was later dropped.

AUTHOR'S ADDITIONAL NOTE:

Details on post-1975 union elections are taken from newspaper accounts, union files and issues of the Hawaii Teamster. That publication's September 1978 issue carried the story of Local 427's merger with Local 996