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Arbitration Panel Decision Under the Randolph-Sheppard Act

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Information about this document as published in the Federal Register.

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Department of Education.


Notice of arbitration panel decision under the Randolph-Sheppard Act.


The Department gives notice that on March 30, 2006, an arbitration panel rendered a decision in the matter of Gary DeFalco v. Nevada Department of Employment, Training and Rehabilitation (Docket No. R-S/05-2). This panel was convened by the U.S. Department of Education, under 20 U.S.C. 107d-1(a), after the Department received a complaint filed by the complainant, Gary DeFalco.

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You may obtain a copy of the full text of the arbitration panel decision from Suzette E. Haynes, U.S. Department of Education, 400 Maryland Avenue, SW., Room 5022, Potomac Center Plaza, Washington, DC 20202-2800. Telephone: (202) 245-7374. If you use a telecommunications device for the deaf (TDD), you may call the Federal Relay Service (FRS) at 1-800-877-8339.

Individuals with disabilities may obtain this document in an alternative format (e.g., Braille, large print, audiotape, or computer diskette) on request to the contact person listed in the preceding paragraph.

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Under section 6(c) of the Randolph-Sheppard Act (the Act), 20 U.S.C. 107d-2(c), the Secretary publishes in the Federal Register a synopsis of each arbitration panel decision affecting the administration of vending facilities on Federal and other property.


This dispute concerned alleged violations of the Act (20 U.S.C. 107 et seq.), the implementing regulations in 34 CFR part 395, and State rules and regulations by the Nevada Department of Employment, Training and Rehabilitation concerning complainant's management of Facility #43, a vending machine route.

A summary of the facts is as follows: Complainant has been a licensed vendor in the Nevada Department of Employment, Training and Rehabilitation's Randolph-Sheppard vending facility program since 1987. On January 29, 2002, complainant filed a grievance with the Nevada Department of Employment, Training and Rehabilitation, the State licensing agency (SLA), alleging that the SLA—(1) denied his right as the Southern Nevada Representative to manage a vending facility at the Las Vegas Water District; (2) denied his right as the Southern Nevada Representative to manage a vending site at the Las Vegas Department of Energy Support Facility; (3) denied his right as the Southern Nevada Representative to service all vending sites in southern Nevada since May 1999; and (4) placed him on a corrective action plan concerning his alleged improper management of Facility #43 prior to his receiving a notice of non-compliance from the SLA or being given the opportunity for corrective action. On February 15, 2002, the SLA rejected complainant's four grievances. Start Printed Page 70748

Subsequently, complainant filed for a State fair hearing with the SLA. A hearing on this matter was held on May 22 and June 19, 2002. On April 11, 2003, the hearing officer affirmed that complainant failed to establish any violations by the SLA regarding complainant's four grievances and the SLA's administration of the Nevada Randolph-Sheppard vending facility program. However, the hearing officer ruled that the complainant should not be responsible for the lease payments for his business vehicle for Facility #43 while a vending company serviced his vending route. The SLA adopted the hearing officer's decision as final agency action. The complainant sought review of that decision by a Federal arbitration panel.

Arbitration Panel Decision

After reviewing all of the records and hearing testimony of witnesses, the panel majority ruled that—(1) The complainant was never appointed the Southern Nevada Representative and, therefore, had no first right of refusal for new vending routes in southern Nevada; (2) because the complainant completed all of the requirements of the corrective action plan, the SLA must place him back to work either into his previous position or in a suitable route but that there should be no damages because his net compensation during the time he was removed from the route had not diminished; (3) the SLA had fulfilled the order of the State hearing officer by paying for lease and insurance payments on complainant's vehicle because the complainant had been deducting these expenses from the set-aside normally paid to the SLA; (4) the loaning of start-up funds to the vendor by the SLA was not in violation of the Act; and (5) the arbitration hearing was not the proper venue for allegations that one of the panel members should have recused himself from the panel.

One panel member dissented from one of the panel's rulings—that the SLA should return the complainant to his previous vending route or a similar vending route—based upon the belief that an arbitration panel does not have the authority to specify an award to the vendor even when a violation of the Act has been found.

One panel member dissented from the entirety of panel's decision with the exception of the panel's ruling that the SLA should return the complainant to his previous vending route or a similar vending route.

The views and opinions expressed by the panel do not necessarily represent the views and opinions of the U.S. Department of Education.

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Dated: December 1, 2006.

John H. Hager,

Assistant Secretary for Special Education and Rehabilitative Services.

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[FR Doc. E6-20680 Filed 12-5-06; 8:45 am]