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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 of Education (Department) gives notice that on August 21, 2006, an arbitration panel rendered a decision in the matter of David Stewart v. Alabama Department of Rehabilitation Services (Case No. R-S/04-1). This panel was convened by the Department, under 20 U.S.C. 107d-1(a), after the Department received a complaint filed by the petitioner, David Stewart.

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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 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 under FOR FURTHER INFORMATION CONTACT.

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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, the implementing regulations in 34 CFR part 395, and State rules and regulations by the Alabama Department of Rehabilitation Services, the State licensing agency (SLA), regarding David Stewart's (complainant) termination as manager of the military dining facility at the Redstone Arsenal in Huntsville, Alabama.


On November 13, 2002, the SLA issued a bid announcement for the military dining hall facility at Redstone Arsenal. Among other details in the announcement, the SLA specifically indicated that the contract was a joint venture and that the licensed blind vendor selected would be required to team with an outside military dining hall contractor known as KCA, Inc.

On January 7, 2003, the SLA informed complainant that he had been selected as the licensed manager for the military dining hall at Redstone Arsenal and complainant accepted on January 8, 2003.

On February 4, 2003, the complainant met with SLA staff members, KCA, Inc. staff and other interested parties. At the meeting, complainant explained that his wife would not be able to assume the administrative roles, i.e., payroll assistant, driving, and other duties as the previous blind vendor's wife. Therefore, complainant proposed that one-half of the general and administrative costs normally passed on to KCA, Inc. be allocated to him since complainant would have to hire additional staff to perform those duties.

Subsequently, complainant alleged that a member of KCA, Inc. informed him that a proposed joint venture agreement would be sent to complainant to consider. On February 13, 2003, the SLA wrote the complainant stating that he must execute a joint venture and operating agreement by February 21, 2003 or the military dining hall facility at Redstone Arsenal would be awarded to the next highest-scoring blind vendor.

Previously, complainant had hired an attorney to assist him in reviewing the joint venture agreement. Upon receipt of the February 13, 2003 letter from the SLA, complainant's attorney and the Start Printed Page 34460SLA staff exchanged a number of letters regarding this matter. Complainant also alleged that his attorney received information that KCA, Inc. was unwilling to enter into a joint venture agreement with him.

On February 19, 2003, SLA staff wrote to complainant's attorney reiterating its position that complainant and KCA, Inc. must enter into a joint venture agreement and execute a signed document by February 21, 2003. On February 26, 2003, SLA staff wrote complainant's attorney explaining that the SLA had to award the military dining hall facility at Redstone Arsenal to another vendor because complainant failed to execute the joint venture agreement with KCA, Inc.

On April 2, 2003, complainant requested a hearing. A fair hearing on this matter was held on August 5, 2003. On September 5, 2003, the hearing officer issued an order denying complainant's grievance. Subsequently, the SLA adopted the hearing officer's decision as final agency action. Complainant sought review by a Federal arbitration panel of that decision.

Arbitration Panel Decision

The issue heard by the panel was whether the Alabama Department of Rehabilitation Services violated the Act, 20 U.S.C. 107 et seq., the implementing regulations in 34 CFR part 395, and its own rules and regulations in the alleged improper termination of complainant from managing the military dining facility at Redstone Arsenal.

After reviewing all of the records and hearing testimony of witnesses, the majority of the panel ruled that the SLA acted properly and in full and fair compliance with the Act, implementing regulations, and State rules and regulations. Therefore, the panel denied complainant's grievance. One panel member dissented.

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

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You may view this document, as well as all other Department of Education documents published in the Federal Register, in text or Adobe Portable Document Format (PDF) on the Internet at the following site:​news/​fedregister.

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The official version of this document is the document published in the Federal Register. Free Internet access to the official edition of the Federal Register and the Code of Federal Regulations is available on GPO Access at:​nara/​index.html.

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Dated: June 14, 2007.

John H. Hager,

Assistant Secretary for Special Education and Rehabilitative Services.

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[FR Doc. E7-12146 Filed 6-21-07; 8:45 am]