Kaiser Runs Aground in Hawaii

Hawaiian health care workers in UNITE HERE Local 5 have organized short strikes over workloads, staff cuts, and clinic closings. Photo: UNITE HERE Local 5.

Her top management priority “is to make sure that the work environment is as good as it can be…so that everyone can love what they do,” explained Mary Ann Barnes, new president of Kaiser Permanente in Hawaii, in the employee newsletter.

The pictured showed her wearing a colorful Hawaiian lei. For spreading such good vibes she earns an estimated $1 million a year.

So several hundred red-T-shirted members of UNITE HERE Local 5, including those who work at Kaiser clinics and hospitals, tried to meet with Barnes September 24 at her office in Honolulu. They spilled out of three buses into the parking lot below Barnes’ window.

“I don’t know but I’ve been told, Kaiser’s got a pot of gold,” they chanted. “And if they don’t give it up soon, we’ll be marching here ’til June!”

Then they sent a rank-and-file delegation inside to ask why Kaiser is trying to curtail group pension coverage if it really wants to improve job conditions for the local’s 2,000 members, who have helped Kaiser generate more $4.8 billion in profits in the last 18 months.

Unfortunately, Barnes was tied up in a meeting elsewhere—and thus no more responsive than other Kaiser officials have been during two-and-a-half years of stalled bargaining.

In January Kaiser negotiators presented what they claimed was their “last, best, and final” offer. The union rejected it, and still faces the threat of a Kaiser-declared impasse.

The package included no retroactivity, and the lowest wage increase the hospital chain has proposed for any of its U.S. regions. Management wants to deny defined benefit pensions to new hires, and up the requirements for how many hours current employees must work to qualify for existing coverage.


This pension rollback, Kaiser’s main giveback demand, is a real poison pill. At Kaiser, Local 5 sets the highest standard for wages and benefits in Hawaii’s entire health care industry, benefiting both its own members and others in unionized and non-union hospitals. If pensions are curtailed in the health care field, how long will 8,800 other UNITE HERE members, employed in the Hawaiian hotel industry, hold onto them?

To fend off this challenge, the union’s creative, multi-faceted contract campaign has included:

Savvy Social Media Use. Local 5 has produced an excellent animated educational video on what’s wrong with pension plan changes that pit young against old and leave new hires dependent on 401(k) coverage rather than a real pension. On YouTube the video is called “Kaiser Permanente, We’re Not ‘Little Hawaii!’” referring to a statement by a mainland Kaiser executive.

As member Jonah Pascual explains, “Our defined benefit is concrete. It’s the employer’s responsibility to make sure the money is there and they can’t touch it. But they’re trying to switch over to a defined contribution approach…With that, they put in the money, but whatever happens, happens. You never know what’s going to be in the pot when you retire.”

Pension Math Lessons. If Kaiser gets the givebacks it wants, Local 5 calculates, future members will lose at least $1,200/month when they retire at age 65.

“What’s Your Number?” became the question of the day as union activists helped their co-workers do the individual calculations to understand how plan changes would affect them.

Stewards have organized a series of colorful workplace actions with props. For the theme “Don’t Blow Your Pensions,” they spent a day blowing soap bubbles at work. To urge co-workers, “Don’t Be a Sucker: Fight for Your Pension!” they handed out union-label lollipops.

The education paid off in June, when 130 rank-and-filers, joined by their high-school-age children, packed an open bargaining session with Kaiser. They carried “Don’t Touch Our Pensions!” signs and applauded wildly at co-workers’ personal testimony.

Legislative and Political Action. Workers took their contract campaign to the Democratic Party’s state convention, where they canvassed hundreds of party delegates and elected officials about their pension fight.

Local 5 also ran one of its own, hotel worker Joli Tokusato, for a seat on the Honolulu City Council. She lost this time around, but her campaign engaged scores of members as volunteers and gave her a public platform to speak on union issues.

Local 5 has also been a main sponsor of AiKea, a two-year-old community-labor coalition.

Patient Advocacy. According to Kaiser worker Gloria Allen, “patients are not getting the quality care like we had before—and they’re paying more for it.”

So Local 5 is considering legislative measures to improve Kaiser’s mental health coverage and its financial transparency, and make it harder for Kaiser to hike customer rates while it maintains cash reserves in excess of $30 billion.

Members have already lobbied the state legislature for a bill which would require state-regulated health plans to expand their coverage of young people with autism-spectrum disorders. Kaiser opposes the measure.

Rallying Other Unions as Health Care Consumers. “Kaiser has attacked its own workers and its core clients at the same time,” Local 5 Secretary-Treasurer Eric Gill says. “Union groups have been its core constituency,” but now they’re facing double-digit rate hikes in Hawaii.



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Those hikes led Teamsters Local 996 to drop Kaiser as a hospital/HMO option for its members and take its $10 million in annual health and welfare fund spending elsewhere.

Like the Teamsters, Local 5 operates its own health insurance fund, jointly administered with hotel industry representatives. The Local 5 fund has used its leverage to restrain Kaiser’s price-gouging against its own members.

Targeting Board Members. Kaiser’s board includes Edward Pei, director of the Hawaii Bankers Association. Local 5 and its supporters have leafleted the Bank of Hawaii, taken up the cause of low-paid bank tellers, and confronted Pei personally—all to keep the pressure on a corporate decision-maker close to the scene of their pension struggle.

Intermittent Strikes. Like the National Union of Healthcare Workers (NUHW) and California Nurses Association (CNA) at Kaiser in California, Local 5 members have organized short protest strikes. They held four one-day job actions last year over workloads, staffing cuts, and clinic closings.

These “minority strikes” involve select groups of workers, from only a handful to more than 400, in multiple departments. The third walkout was in response to several workers being written up for participating in the second.

When California industrialist Henry J. Kaiser came to Hawaii in the late 1950s, labor-management discord was not what he envisioned. He brought Kaiser Permanente from the mainland, where it was a pioneering, labor-oriented, prepaid medical plan with its own health care facilities.

The company’s recognition of Local 5 reflected a corporate decision in Hawaii to work with the union instead of fighting it—similar to management’s later formation of a Kaiser-wide Labor-Management Partnership (LMP) in the mid-1990s.

At the time, Local 5 was headed by a conservative business unionist, Arthur Rutledge, who was simultaneously running affiliates of HERE and the Teamsters in Honolulu. Rutledge was succeeded by his son Tony, who later, with his own son Aaron, pleaded guilty to federal charges related to financial mismanagement.

But by the time the Rutledges were indicted, the family had already been ousted from Local 5 by reformers led by Gill, in a narrow election victory in 2000.


Gill inherited the local with its treasury depleted and its finances a mess. After fending off a decertification attempt in the Kaiser unit, Gill’s administration began rebuilding. The local’s steward structure was revitalized. Hotel union advisors were imported to aid contract campaigning and negotiations.

With help from SEIU Local 250, later known as United Healthcare Workers-West (UHW), Local 5 won retiree medical coverage at Kaiser in 2004 and persuaded the employer to join its health care trust.

As a non-partnership union, however, Local 5 members have been excluded from “unit-based teams,” the basic building blocks of Kaiser’s supposedly cooperative labor-management relations approach. Kaiser and the existing LMP unions pick and choose which unions they let in.

Because they’re not part of the LMP, Local 5 caregivers were free to blow the whistle on last year’s staffing cuts at Kaiser outpatient clinics. The layoffs affected nurses and some Local 5 members at the Honolulu Urgent Care Clinic.

“What we’re hearing from our members every day is quite alarming,” union spokesperson Cade Watanabe told the press. “Patients should know that these layoffs will have huge impacts on the quality of care that they are going to be receiving at Kaiser.”

On the other hand, officials of the OPEIU-affiliated Hawaii Nurses Association, which is part of the LMP, went along with the move—and now face internal opposition in upcoming union elections.


Top Kaiser executives have remained on close terms with the leadership of UHW, but Local 5 has not.

In California, UHW represents a service and technical unit of 45,000 members, including many of the equivalent jobs to those represented by UNITE HERE in Hawaii. UHW’s current leadership was installed by then-SEIU President Andy Stern when he trusteed the local in 2009, removing the elected officers who had assisted Local 5. These officers became founders of NUHW.

While Local 5 members have been banging on Mary Ann Barnes’s door in Honolulu, UHW officials recently welcomed her mainland counterpart to a statewide union leadership meeting. Northern California CEO Greg Adams urged UHW to “embrace change” and work together with Kaiser to reduce costs.

He probably didn’t mean trimming his own $2.2 million annual paycheck or eliminating his multiple pension plans. Instead, with the shortsighted acquiescence of the LMP unions—for instance, UHW’s crossing NUHW and CNA picket lines when they’ve struck over these issues—Kaiser hopes to extract costly benefit concessions from its smaller, non-partnership unions.

Of course, these will then become the pattern for contract givebacks from the 90,000 or more workers in the coalition of LMP unions, which SEIU dominates.

“There is no strong national health care union,” Gill noted at Local 5’s convention last month. “There was one, but it got turned around.” The role of UHW, what he called a “sellout union on the mainland,” has made saving the pension much more difficult.

The only obstacle to Kaiser’s divide-and-conquer plan is the continuing resistance of Local 5 rank-and-filers in Hawaii, 4,000 like-minded Kaiser workers in California represented by NUHW, and hopefully the 18,000 Kaiser members of the CNA, who are also now in bargaining.

Steve Early was a longtime union organizer and negotiator for the Communications Workers of America. He is the author of The Civil Wars in U.S. Labor and Save Our Unions, both of which report on Kaiser union conflicts. He can be reached at Lsupport[at]aol[dot]com.

A version of this article appeared in Labor Notes #428, November 2014. Don't miss an issue, subscribe today.