Connections Public Charter School and an employee who is accused of violating ethics laws have sued the state Ethics Commission as well as the Charter School Review Panel.

The Hilo charter school and its administrative assistant, William Eric Boyd, filed a lawsuit in Circuit Court in Hilo against the commission and its executive director, Les Kondo, demanding that it drop its investigation of Boyd. They claim that because he works for a charter school, Boyd is not a state employee and therefore not subject to the state Ethics Code.

“That’s the 400-pound gorilla in this whole litigation, whether under the state Ethics Code he is a state employee,” attorney Ted Hong, who is representing the school and Boyd, said Thursday. “If the court rules that they’re not state employees, that’s really going to cement the autonomy of charter schools to chart their own destiny. This case to me has a huge implication.”

But the plaintiffs lost the first round in court Wednesday, when Circuit Judge Glen Hara refused to issue a temporary restraining order or preliminary injunction to stop the ethics investigation. He noted that charter schools are prohibited from suing state agencies, and said it didn’t appear the lawsuit was likely to prevail on the merits.

Deputy Attorney General Robyn Chun, representing the Ethics Commission, argued that public charter schools are state entities and their employees are state employees.

“Charter schools do operate somewhat autonomously, but they do receive state funding and their employees are state employees, entitled to state health benefits, disability benefits, sick leave, vacation days and retirement,” she told the Star-Advertiser.

Chun also said that if Boyd were not a state employee, it would be unconstitutional to use state funds to pay him, as the use of public funds for a private purpose is prohibited under the Hawaii Constitution.

Charter schools are public schools that operate under charters issued by the state to local school boards, which run the schools and have autonomy in hiring. Charter employees are paid with state funds and belong to public employees unions. Boyd is a member of the Hawaii Government Employees Association, according to Principal John Thatcher. Hong said Boyd’s paychecks come from the local school board, not the state of Hawaii.

The Ethics Commission filed a charge against Boyd in October accusing him of “numerous violations” of the state Ethics Code, according to court filings. There are no charges against the school itself. The commission alleges that Boyd represented his private company, which supplies lunches to the school, and also represented the school in business transactions, a conflict of interest. It also alleges that he used a school booth to sell his company’s products at the Hawaii County Fair.

Thatcher said Boyd occasionally signed off on invoices to acknowledge receipt of meals from the company, but the school has tightened procedures since then. Hong said the company is run by Boyd’s wife and that he doesn’t play an active role in it.

Connections, one of Hawaii’s oldest charter schools, received its charter in 2000 and has 370 students in kindergarten through grade 12.

A second suit filed by Connections and Boyd targets the Charter School Review Panel and its chairman, Carl Takamura, alleging a violation of the Sunshine Law with an agenda item concerning Connections. Takamura declined to comment.