OPINION OF THE COURT BY
KOBAYASHI, J.
The State of Hawaii and various Hawaii public officials (hereinafter the State) appeal from a decision of the circuit court holding that Hawaii’s durational residence requirement for public employment violates the Equal Protection Clause of the United States Constitution.
Appellee, Carleen York, was hired by the State Department of Education as a general aide at Keaau Elementary and Intermediate School. She was dismissed therefrom when it was learned that she failed to meet the three-year residency requirement for public employment contained in Section 78-1(a), Hawaii Revised Statutes. The trial court, in an action
for declaratory judgment, found the statute constitutionally invalid and the contract between the State and appellee binding. A prohibitory injunction was granted, enjoining the State from enforcing the three-year residency requirement. Damages were awarded in the sum of $895.77, based on the contract provisions less an amount made by appellee in mitigation of her damages during the contract period. The injunction and judgment of the trial court were suspended and stayed during the pendency of this appeal.
Hawaii Revised Statutes, § 78-l(a), provides in pertinent part that:
All officers, whether elective or appointive, and all employees in the service of the government of the State or in the service of any county or municipal subdivision of the State . . . shall be . . . residents of the State for at least three years immediately preceding their appointment.
The above statute clearly creates two classes of residents applying for public employment. One class is composed of applicants who have resided for three years or more in the State, and the other of applicants who have resided in the State for less than three years. The question is whether this type of discrimination against the class with less than three years of residence is legally justifiable.
Whether HRS § 78-l(a) stands in violation of the Equal Protection Clause, involves essentially an examination of three criteria: “the character of the classification in question; the individual interests affected by the classification; and the governmental interests asserted in support of the classification.”
Dunn v. Blumstein,
92 S.Ct. 995, 999 (1972).
Appellant adamantly asserts that the less burdensome traditional rational basis test, as opposed to the compelling State interest test utilized by the trial court, be applied in determining the constitutionality of the statute in question. Apparently, it is appellant’s belief that the rational basis test is easily met by the State in this case. We cannot agree.
We set .forth the rational basis test in
Hasegawa v. Maui Pineapple Co.,
52 Haw. 327, 329, 475 P.2d 679, 681 (1970),
[I]n exercising this right to classify in order to achieve social goals the legislature may not act arbitrarily; that is, the classification of a particular group as a subject for regulation must be reasonable in relation to the purpose of the legislation. As the Supreme Court stated in
Allied Stores of Ohio v. Bowers,
358 U.S. 522, 527 (1959):
[Tjhere is a point beyond which the State cannot go without violating the Equal Protection Clause. The State must proceed upon a rational basis and may not resort to a classification that is palpably arbitrary. The rule often has been stated to be that the classification “must rest upon some ground of difference having a fair and substantial relation to the object of the legislation.”
The State in its brief stresses that “it can readily be seen that Section 78-l(a) is constitutional. It rests upon rational basis concerning the right of the State, as an employer,'to employ as officers and employees, persons with Hawaiian residency of three years or more.” It is beyond question that the State of Hawaii, as an employer, can in its discretion require high standards of qualification from those of its residents it selects to employ. However, such discretion is not absolute. The argument that the State possesses the rights of a private employer and may freely regulate the terms and conditions of public employment has been rejected by the Supreme Court of California stating that “the state may not arbitrarily foreclose to any person the right to pursue an otherwise lawful occupation. Any limitation on the opportunity for employment impedes the achievement of economic security, which is essential for the pursuant [sic] of life, liberty and happiness; courts sustain such limitations only after careful scrutiny. . . . [W]e may no longer question that state regulation of public employment must accord with the Fourteenth Amendment.”
Purdy & Fitzpatrick v. State,
79 Cal. Rptr. 77, 86-89, 456 P.2d 645,
654-57 (1969).
As suggested
in Dunn v. Blumstein, supra,
the “individual interests affected by the classification” are of primary significance in the application of the doctrine of equal protection. Such a fundamental interest as the right to work
and thereby sustain one’s self and family cannot be impinged absent a showing of a rational relationship to a countervailing legitimate interest on the part of the State. A three-year durational residency requirement does not provide a rational connection for determining whether an applicant has the capacity and fitness to adequately serve as a public employee. A rational relationship to a legitimate State interest that justifies imposing three years’ residency as a prerequisite tó qualifying for employment with the State has not been demonstrated in this case.
The statute creates an arbitrary classification without rational relation to a public employee applicant’s capabilities of performing satisfactorily for the State
and operates irrationally without reference
to any legitimate State interest. The discrimination imposed by HRS § 78-l(a) denies arbitrarily to certain persons, merely because of their status as residents of less than three years’ duration,
the right to pursue otherwise lawful occupations. It is therefore unconstitutional.
We have held that HRS § 78-1 (a) exists without a rational basis. It was not necessary for the trial court to judge the statute under the more burdensome and stricter compelling State interest test in conjunction with the right to travel.
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OPINION OF THE COURT BY
KOBAYASHI, J.
The State of Hawaii and various Hawaii public officials (hereinafter the State) appeal from a decision of the circuit court holding that Hawaii’s durational residence requirement for public employment violates the Equal Protection Clause of the United States Constitution.
Appellee, Carleen York, was hired by the State Department of Education as a general aide at Keaau Elementary and Intermediate School. She was dismissed therefrom when it was learned that she failed to meet the three-year residency requirement for public employment contained in Section 78-1(a), Hawaii Revised Statutes. The trial court, in an action
for declaratory judgment, found the statute constitutionally invalid and the contract between the State and appellee binding. A prohibitory injunction was granted, enjoining the State from enforcing the three-year residency requirement. Damages were awarded in the sum of $895.77, based on the contract provisions less an amount made by appellee in mitigation of her damages during the contract period. The injunction and judgment of the trial court were suspended and stayed during the pendency of this appeal.
Hawaii Revised Statutes, § 78-l(a), provides in pertinent part that:
All officers, whether elective or appointive, and all employees in the service of the government of the State or in the service of any county or municipal subdivision of the State . . . shall be . . . residents of the State for at least three years immediately preceding their appointment.
The above statute clearly creates two classes of residents applying for public employment. One class is composed of applicants who have resided for three years or more in the State, and the other of applicants who have resided in the State for less than three years. The question is whether this type of discrimination against the class with less than three years of residence is legally justifiable.
Whether HRS § 78-l(a) stands in violation of the Equal Protection Clause, involves essentially an examination of three criteria: “the character of the classification in question; the individual interests affected by the classification; and the governmental interests asserted in support of the classification.”
Dunn v. Blumstein,
92 S.Ct. 995, 999 (1972).
Appellant adamantly asserts that the less burdensome traditional rational basis test, as opposed to the compelling State interest test utilized by the trial court, be applied in determining the constitutionality of the statute in question. Apparently, it is appellant’s belief that the rational basis test is easily met by the State in this case. We cannot agree.
We set .forth the rational basis test in
Hasegawa v. Maui Pineapple Co.,
52 Haw. 327, 329, 475 P.2d 679, 681 (1970),
[I]n exercising this right to classify in order to achieve social goals the legislature may not act arbitrarily; that is, the classification of a particular group as a subject for regulation must be reasonable in relation to the purpose of the legislation. As the Supreme Court stated in
Allied Stores of Ohio v. Bowers,
358 U.S. 522, 527 (1959):
[Tjhere is a point beyond which the State cannot go without violating the Equal Protection Clause. The State must proceed upon a rational basis and may not resort to a classification that is palpably arbitrary. The rule often has been stated to be that the classification “must rest upon some ground of difference having a fair and substantial relation to the object of the legislation.”
The State in its brief stresses that “it can readily be seen that Section 78-l(a) is constitutional. It rests upon rational basis concerning the right of the State, as an employer,'to employ as officers and employees, persons with Hawaiian residency of three years or more.” It is beyond question that the State of Hawaii, as an employer, can in its discretion require high standards of qualification from those of its residents it selects to employ. However, such discretion is not absolute. The argument that the State possesses the rights of a private employer and may freely regulate the terms and conditions of public employment has been rejected by the Supreme Court of California stating that “the state may not arbitrarily foreclose to any person the right to pursue an otherwise lawful occupation. Any limitation on the opportunity for employment impedes the achievement of economic security, which is essential for the pursuant [sic] of life, liberty and happiness; courts sustain such limitations only after careful scrutiny. . . . [W]e may no longer question that state regulation of public employment must accord with the Fourteenth Amendment.”
Purdy & Fitzpatrick v. State,
79 Cal. Rptr. 77, 86-89, 456 P.2d 645,
654-57 (1969).
As suggested
in Dunn v. Blumstein, supra,
the “individual interests affected by the classification” are of primary significance in the application of the doctrine of equal protection. Such a fundamental interest as the right to work
and thereby sustain one’s self and family cannot be impinged absent a showing of a rational relationship to a countervailing legitimate interest on the part of the State. A three-year durational residency requirement does not provide a rational connection for determining whether an applicant has the capacity and fitness to adequately serve as a public employee. A rational relationship to a legitimate State interest that justifies imposing three years’ residency as a prerequisite tó qualifying for employment with the State has not been demonstrated in this case.
The statute creates an arbitrary classification without rational relation to a public employee applicant’s capabilities of performing satisfactorily for the State
and operates irrationally without reference
to any legitimate State interest. The discrimination imposed by HRS § 78-l(a) denies arbitrarily to certain persons, merely because of their status as residents of less than three years’ duration,
the right to pursue otherwise lawful occupations. It is therefore unconstitutional.
We have held that HRS § 78-1 (a) exists without a rational basis. It was not necessary for the trial court to judge the statute under the more burdensome and stricter compelling State interest test in conjunction with the right to travel. We recognize, however, that the compelling State interest test has been held applicable in cases involving suspect classifications,
Korematsu v. United States,
323 U.S. 214, 216 (1944) (racial classifications), and fundamental rights,
Shapiro v. Thompson,
394 U.S. 618 (1969) (right to travel). In
Dunn v. Blumstein, supra,
92 S.Ct. at 1003, the Supreme Court, citing
Shapiro,
stated that “durational residence laws must be measured by a strict equal protection test: they are unconstitutional unless the State can demonstrate that such laws are
‘necessary
to promote a
compelling
governmental interest.’ ”
Appellant argues that appellee should not be allowed to recover damages. In support of its position appellant cites
Brown v. Provisional Government, 9
Haw. 311 (1893). We find the
Brown
decision to be clearly distinguishable and inapposite to the situation before us. In
Brown
the court held that a politically appointed State officer, claiming color of title to the office but ousted from his job and replaced by another appointee, could not recover his salary from the government after he was reinstated. In the instant case an
individual employee contract is involved. The better rule provides that the State is liable where it is found to be in breach of contract and a question of governmental immunity is not involved.
See Souza & McCue Construction Co. v. Superior Court of San Benito,
20 Cal. Rptr. 634, 370 P.2d 338 (1962). As such, the trial court’s award as to damages is upheld.
Nobuki Kamida,
Deputy Attorney General
(George Pai,
Attorney- General, and
Sonia Faust,
Deputy Attorney General, on the briefs), for defendants-appellants.
Andrew Levin,
Associate Counsel (Hawaii Legal Services Project, Legal Aid Society of Hawaii, of counsel), for plaintiffs-appellees.
Judgment affirmed.