THE HARMON ARBITRATION

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This is a branch from the lawyer’s money tree called...

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What follows are glimpses of one person’s experiences with the modern-day, mandatory arbitration process.

BACKGROUND

October 18, 1996, Bobby Harmon, Risk/Insurance & Safety Manager of Kamehameha Schools/Bishop Estate, and President of P&C Insurance Company, Inc., Kamehameha’s for-profit, captive insurance company, met with P&C’s auditors, Cary Okawa and Dennis Tsuhako, from the accounting firm of Coopers & Lybrand (now PricewaterhouseCoopers), regarding P&C’s annual financial report. At this meeting, Harmon expressed his concerns with what he considered to be improper billings by the Captive Manager (Marsh & McLennan), and improper claims reserves. He also described “arms-length” issues between KSBE and P&C, as they related to what he believed were illegal “efforts to direct and control the operations of P&C” by Kamehameha’s General Counsel Nathan Aipa, in-house attorney Louanne Kam, and Trustee Henry Peters who also held the position of Chairman of the Board of P&C Insurance Company.

November 20, 1996, in a follow-up to their meeting, Harmon wrote to Cary Okawa of Coopers & Lybrand, in which he provided further information, along with hundreds of pages of documents which gave evidence regarding the conspiracies and financial improprieties being conducted between named individuals at Kamehameha Schools/Bishop Estate and Marsh & McLennan. A copy of this letter was sent to Hawaii’s Insurance Commissioner who has the responsibility for regulating Captive Insurance Companies domiciled in the State of Hawaii.

November 20, 1996, Harmon was terminated from his positions as Risk/Insurance & Safety Manager of Kamehameha Schools/Bishop Estate, and as President of P&C Insurance Company, Inc., Kamehameha’s for-profit, captive insurance company.

December 29, 1996, Harmon wrote a letter to the Bishop Estate Trustees providing details of improper and illegal activities being conducted by some of the top management at the estate and its subsidiaries. Copies of this letter were sent to Michael Goolsby, Chubb Group, which provided the professional liability insurance policy to Bishop Estate and its subsidiaries; Robert Kuroda, of John Mullen & Co., the independent claims adjuster contracted by P&C Insurance Company; and Pat Onogi, the Claims Manager for Marsh Insurance Management Services (a wholly-owned subsidiary of Marsh & McLennan), the company contracted by P&C as its Captive Manager.

January 5, 1997, Harmon sent a Notice of Claim letter to John T. Sinnott, President and CEO of Marsh & McLennan, and enclosed a copy of his letter dated December 29, 1996 to the Bishop Estate trustees.

January 22, 1997, Harmon applied to the Hawaii Dept. of Labor & Industrial Relations for unemployment insurance.

January 30, 1997, Robert Katz, Esq., of Torkildson Katz Fonseca Jaffe Moore & Hetherington, wrote to Harmon: “I have been retained by Kamehameha Schools Bishop Estate (‘KSBE’) to assist and advise it in connection with your December 29, 1996 settlement proposal ... Due to the extent and complexity of your settlement proposal, it will not be possible for KSBE to respond by your requested date of January 31, 1997.”

February 15, 1997, P&C and KSBE filed a Motion for Preliminary Injunction and Notice of Hearing of Motion. The Hearing of Motion was scheduled for February 18, 1997.

February 18, 1997, Harmon, through his attorney, John Marshall, Esq., filed an Answer to KSBE’s Complaint, and a Counterclaim, alleging and averring, in part, that while he was employed by KSBE he “witnessed, and refused to participate in or acquiesce to acts and practices by the Counterclaim Defendants which were in violation of Federal and/or State of Hawaii laws and/or regulations and/or rules. As a result of Counterclaimant’s refusal to participate in or acquiesce to said acts and practices, as well as because the Counterclaim Defendants believed that Counterclaimant had reported and/or was about to report said acts and/or practices to governmental authorities, Counterclaim Defendants wrongfully terminated Counterclaimant....

February 20, 1997, Judge Karen Radius issued an Order Granting Plaintiffs’ Motion for Preliminary Injunction against Defendant Harmon.

April 27, 1999, Harmon filed a RICO lawsuit, Harmon vs. Federal Insurance Company; P&C Insurance Company, Inc.; Marsh & McLennan Companies, Inc.; Pricewaterhouse, Coopers & Lybrand, LLP; Torkildson, Katz, Fonseca, Jaffe, Moore & Hetherington, A Law Corporation; Henry H. Peters, Richard S. H. Wong, Lokelani Lindsey, Gerard Jervis and Oswald Stender, Trustees of the Estate of Bernice Pauahi Bishop; John Mullen & Co., Inc.; Nathan Aipa; Louanne Kam; Rodney Park; William S. Richardson; Gilbert Tam; Peter Lowe; John & Jane Does 1 - 1000, et al., in U.S. District Court....

Fast Forward to:

On March 31, 2003, bankruptcy trustee Mary Lou Woo, through her attorney, Steven Guttman, of Kessner Duca Umebayashi Bain & Matsunaga, filed a Demand For Arbitration with the American Arbitration Association. Over Harmon’s protests, Judith Neustadter Fuqua is appointed Arbitrator.

UPDATES....

NEW DISCOVERY (12-24-08): More undisclosed conflicts of interest between Trustee David C. Farmer, James Nicholson, Steven Guttman, Joshua Gotbaum, Judith Neustadter Fuqua, Linda Lingle, Jack Abramoff, AIPAC, Barack Obama, Bill Clinton, Hillary Clinton, Rahm Emanuel, Michael Mukasey, Bishop Estate, Goldman Sachs, Robert Rubin, Henry Paulson, The Nature Conservancy, Faye Kurren, Judge Barry Kurren, Judge David Ezra, OHA, Bernard Madoff, Robert Katz, etc.:

http://www.kycs.AIPAC.htm

http://www.youtube.com/watch?v=U_yA8J-oGQk

http://www.kycbs.net/Jews-Control-America.mht

http://www.voy.com/129276/1273.html

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NEW DISCOVERY (12-22-08): James B. Nicholson apparently has undisclosed business and professional relationships with William S. Richardson, a former Kamehameha Schools Trustee and officer for P&C Insurance Company and a defendant in my RICO lawsuit; and my witnesses Judge Patrick Yim, Tony Rutledge, Bob Awana, Ron Rewald, June Jones, Larry Mehau, and David Farmer, among others (see http://www.kycbs.net/Doc-EQ2048-AG-Witnesses-5-19-0.pdf .

September 11, 2007

Former star athlete head
of Hawaii labor board

By Curtis Lum, Advertiser Staff Writer

JAMES B. NICHOLSON

Age: 58

Title: Chairman

Organization: Hawai'i Labor Relations Board

Born: Honolulu

High School: Saint Louis, 1968

College: Michigan State; William S. Richardson School of Law

Breakthrough job: Hawai'i Employers Council

Little-known fact: Not a natural blond. Has held the state basketball single-game scoring record (60 points) and scoring average (26.8) since 1966

Mentors: Al Fraga, Larry Cundiff, Judge Patrick Yim

Major challenge: Promoting cooperation between labor and management pursuant to the spirit and intent of HRS Chapter 89 in a forum that has been traditionally adversarial.

Q. How did you wind up as chairman of the Hawai'i Labor Relations Board?

A. My background had been as a union rep with the Kansas City Chiefs years ago when I was playing ball. I went to law school and took classes in labor, got out of law school and worked with the Hawai'i Employers Council as a management negotiator with Al Fraga. I moved from there to become a production manager at Weyerhaeuser Paper Co., and from there I worked for the joint labor management trust fund with the Carpenter's Union. I went on to private practice from there and represented the Teamsters in arbitration and became an arbitrator. This job requires all of that in order to fully understand the relationships between the parties and the collective bargaining process, the grievance process, what unfair labor practice is and what it isn't, and basically trying to promote labor-management cooperation.

Q. Your background seems to be more on the union side. Do people look at that and feel that you may be biased?

A. It seems like it's more union, and management's perception in a lot of cases is once you work for the union you're always union. The majority of us are born in blue-collar families. My dad was an adult corrections officer, my mom was a housekeeper in a hotel. I think all our roots are in labor. One of the reasons I was selected was I have been an arbitrator for over 10 years and you're only selected by mutual agreement between the parties. During this process with the HLRB you have three appointees. One represents labor, one represents management and the chair represents members of the public. That's the position I'm at. I feel that with my background that I've been groomed for this position.

Q. What's your approach to this job?

A. The board's mission is to promote harmonious and cooperative relationships between the employers, employees and employee organizations. The whole system is set up traditionally to be adversarial. We're working on changing the administrative rules for our organization to permit us to have more flexibility and give them opportunities to settle disputes on their own, create a vehicle so that if they so chose that they could go to mediation through the board at no expense to them using the federal mediators. We're able to work with the parties to do some of this right now. But it's not the way it's been done. I want to try and slow it down to give the parties some time to catch their breath, sit down and talk about it before the attorneys get into a battle. We've been successful in a couple of cases so far.

Q. Was it an adjustment to go from the private sector to the public sector?

A. It's sort of yes and no. It's a huge employer, but because we're quasi judicial, even though we fall under the Department of Labor, we're only under it for administrative and budgetary purposes. We don't answer to anyone so it's sort of like running your own business again. In that way it's not different, but at the same time you're a public employee and you have to abide by whatever rules that you're required to abide by. For myself, you're devoted full time to this position, which means you can't do any other work besides what you're doing here. I wanted this opportunity for quite some time and when it came up, this is what I wanted to do. It's another challenge and something to put some fire back into me again.

Q. Why did you want to pursue the job?

A. I've been in labor for a long time and I've seen what's happened. As an arbitrator, I've watched the parties and there are so many times that I felt that if only people would just sit down and have a meaningful discussion and try to work things out and try to find ways of resolving issues without having arbitrators decide things for them, I think the system would be better served. One of the things that we're responsible for here, and one of the things that I'm working on first, is to find qualified individuals to serve as arbitrators. So many of the arbitrators who are on the list now have no experience in collective bargaining negotiations, have never worked for unions, have no human resource background, and those are the kind of people that you need. You don't have to be an attorney to be an arbitrator. That's where I gained a lot of experience at the Hawai'i Employers Council where I did 30 to 40 negotiations on my own and sat in on a bunch more.

Q. Since you started, has there been anything that surprised you?

A. One of the things that I was surprised with was that, in reviewing annual reports and information concerning board activities in preparation for my interviews, in order to try and get this job, I found that over 40 percent of the board's decisions were overturned. That's bad. That's just not paying attention. You have to look at the courts. You can't just make decisions. You can't make decisions based on emotions. The perception of the public was that the board wasn't being fair. Something needed to be fixed. We have a really good board. Emory Springer is a former police officer on the Big Island. He was the Big Island SHOPO representative. He's just a breath of fresh air and he's all gung-ho to try to resolve disputes, bring the parties together and try to work things out. And I'm the same way. And then there's Sarah Hirakami who is just brilliant. We come up with ideas and she looks up the law and tells us whether we can do it or not or finds cases in support of our positions. We have a real nice balance.

Q. Are some cases more difficult than others to deal with?

A. The cases that I have problems with are cases that have been sitting around here without decisions being issued for over 10 years. Those are difficult. None of the board members was there at the time of the hearing and motions and whatever else happened. Now, if we were to rule in favor of the employers, in a lot of the cases there's a substantial amount of back pay and other issues that are involved that make it a real big mess. You want to be fair. What we're supposed to do is return it to the status quo, but how do you do that 10 years later?

Q. Do you see yourself fulfilling your six-year term?

A. Definitely. I like this place. The opportunity for me to make an impact on the state so far as labor relations is tremendous.

Q. When you leave the board, what do you hope to have accomplished?

A. I'd like to see management and labor walking down King Street holding hands, but that's not going to happen. But to reduce the number of cases that have to go to arbitration; to encourage the parties to include in their collective bargaining agreements provisions for mediation; to reduce the number of unfair labor practices that are filed with the board. At the same time, that number may increase because of the effectiveness of the board as a place to go to resolve problems. So it sort of cuts both ways. You may have more unfair labor practices because whenever there is a problem they may want to say, "Let's go over there and take care of it. That way at least we'll get to talk." That's what I'm hoping.

And (another goal) is to educate people about relationships and trust and get the state and counties to rely upon the people that they hire to advise them on labor relation issues and union issues. Often times that doesn't happen. And encourage them to foster relationships with one another that are meaningful.

The Honolulu Advertiser

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What follows are just a few of the letters and legal documents hatched from this mandatory arbitration case:

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NOTICE

EFFECTIVE JUNE 28, 2004

INFORMATION FROM THIS SITE HAS BEEN REMOVED BY ORDER OF THE ARBITRATOR,

JUDITH NEUSTADTER FUQUA, ESQ.

American Arbitration Association

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The following are the decisions of the Arbitrator:

THE LAW OFFICE OF JUDITH NEUSTADTER

A Law Corporation

P.O. Box 1401, Wailuku, Hawaii 96793

Tel.: 808-244-7789; Fax.: 808-242-1972

judy@tiki.net

VIA FACSIMILE (1-559-490-1919)

June 28, 2004

James B. Farris
Senior Case Manager, American Arbitration Association
6795 North Palm Avenue, 2^nd Floor
Fresno, California 93704

Re: Woo and Harmon No. 74 166–941 03 JAFA

Dear Mr. Farris:

This letter summarizes the decisions made at today’s Hearing:

1. Effective June 30, 2004, and until entry of the final Award in this Arbitration, and in furtherance of the interim order entered in this Arbitration on June 16, 2004, Mr. Harmon will be assessed, and will pay, $500.00 per day for each calendar day that his web-site, including any sub-directory, contains any document of any nature relating to: Kamehameha Schools; Mr. Harmon’s employment with Kamehameha Schools; this Arbitration or the Arbitrator; and, the Settlement Agreement which is the subject of this Arbitration.

2. Effective immediately, and until entry of the final Award in this Arbitration, and in furtherance of the interim order entered in this Arbitration on June 16, 2004, Mr. Harmon will be assessed, and will pay, $500.00 per letter, times the number of listed recipients, should he communicate in writing with anyone outside of this Arbitration about: Kamehameha Schools; Mr. Harmon’s employment with Kamehameha Schools; this Arbitration or the Arbitrator; and, the Settlement Agreement which is the subject of this Arbitration.

3. Claimant will submit her proposed Findings of Fact/Conclusions of Law, and the proposed Final Award, on or before July 14, 2004. Respondent will submit his objections or corrections, if any, to Claimant’s proposed Findings of Fact/Conclusions of Law, and proposed Final Award, on or before July 21, 2004. The Hearing in this Arbitration will be closed on July 21, 2004, and the Arbitrator will issue Findings of Fact/Conclusions of Law and the Final Award on or before August 23, 2004.

Sincerely,

/s/ Judith Neustadter /s/

Judith Neustadter
Arbitrator

JN:id

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For more information regarding the pitfalls of the arbitration process, GO TO...

ARBITRATE THIS!

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And, for some more “birds of a feather” that you’ll also find building nests in this tree...

ACT 221

TRACKING THE FLOCK OF AIPAC VULTURES

BUZZARDS OF PARADISE