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Arbitration Panel Decision Under the Randolph-Sheppard Act

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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 20, 2008, an arbitration panel rendered a decision in the matter of Dwayne Zuppardo v. Louisiana Department of Social Services, Rehabilitation Services, Case no. R-S/06-5. 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, Dwayne Zuppardo.

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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 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.


Mr. Dwayne Zuppardo (Complainant) alleged violations by the Louisiana Department of Social Services, Rehabilitation Services, the state licensing agency (SLA), of the Act and the implementing regulations in 34 CFR part 395. Specifically, Complainant alleged that the SLA improperly administered the Randolph-Sheppard Vending Facility Program concerning his management of a snack bar in the East Pavilion of Charity Hospital (Charity Hospital) in New Orleans, Louisiana. From November 1991 until March 2004, Complainant managed the snack bar. In March 2004, the snack bar at Charity Hospital was closed. In April 2004, Complainant sent a letter to the SLA requesting a determination as to whether he should be treated as a Displaced Manager rather than being given another vending facility in the main building of Charity Hospital. The SLA denied Complainant's request for a determination on his Displaced Manager status. Thereafter, Complainant requested a state fair hearing. A hearing was held on this matter.

In June 2004, the Administrative Law Judge (ALJ) issued an opinion supporting Complainant's right to the new vending facility in the main building of Charity Hospital. The SLA Start Printed Page 78755did not appeal and adopted the ALJ's decision. Following the ALJ's opinion, Complainant also alleged that the opinion required the SLA to pay him for his lost income at his former snack bar facility until he was placed as the manager of the new vending facility in the main building of Charity Hospital.

For the period of November 1991 until July 1997, while managing the snack bar, Complainant made monthly utility payments, each in the amount of $2,000, to Charity Hospital as directed by the SLA. While there was no requirement for Complainant to make these payments under his Vendor Operating Agreement with the SLA, the permit agreement to operate the snack bar between the SLA and Charity Hospital contained a requirement that the SLA would pay Charity Hospital for utilities at the rate of $2,000 per month.

In March 2005, Complainant learned that the SLA had reimbursed the previous operator of the snack bar for his utility payments to Charity Hospital. At this time, Complainant believed that he also was entitled to reimbursement by the SLA of his utility payments to Charity Hospital. Additionally, Complainant believed that the SLA should reimburse him for loss of income when the snack bar was closed.

On May 27, 2005 Complainant filed a request with the SLA to bypass the administrative review process and proceed with a state fair hearing on the issues of reimbursement for utility payments to Charity Hospital and loss of income as the result of the snack bar closure. On June 10, 2005, the Administrative Law Judge Supervisor denied Complainant's hearing request, citing time limitations for vendors to file for a hearing with the SLA.

It was this decision Complainant sought review of by a Federal arbitration panel. Due to Hurricane Katrina, a hearing on this matter was not held until April 26, 2007.

According to the arbitration panel, the issues to be resolved were as follows: (1) Whether the Complainant is entitled to reimbursement for utility payments paid to Charity Hospital while he operated the snack bar; and (2) whether Complainant is entitled to recover lost earnings from the time his snack bar was closed in March 2004 until he was given a new vending facility in September 2004.

Arbitration Panel Decision

After reviewing all of the records and hearing testimony of witnesses, the panel majority ruled as follows: On issue number one, the panel found that the SLA was obligated to treat Complainant in the same manner as the previous snack bar manager when it reimbursed the previous snack bar manager for utility payments paid to Charity Hospital. Thus, the panel majority directed that the SLA promptly pay Complainant the sum of $138,000 as reimbursement for utility payments Complainant paid to Charity Hospital while he was the licensed manager at the snack bar facility for the period November 1991 to March 2004.

Regarding issue number two, the panel majority ruled that the SLA complied with the June 2004 ruling of the ALJ and expeditiously provided Complainant with a new vending facility in the main building of Charity Hospital. However, the panel majority concluded that the ALJ's ruling did not require the SLA to pay the Complainant for lost earnings from the time he was displaced from the snack bar facility until the time he began to manage the new facility. Hence, the panel majority denied Complainant's claim on the merits, ruling that there was no basis for the SLA to pay Complainant for lost earnings from the time when the snack bar facility closed until he was placed in the new vending facility.

One panel member concurred in part and dissented in part. The panel member dissented from the panel majority on issue number one stating that, “the imposition of fees for utility service upon blind vendors is not prohibited by either state for federal law.” The panel member concurred with the panel majority on issue number two in denying the payment of lost earnings to Complainant.

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

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Dated: December 18, 2008.

Tracy R. Justesen,

Assistant Secretary for Special Education and Rehabilitative Services.

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[FR Doc. E8-30551 Filed 12-22-08; 8:45 am]