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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 U.S. Department of Education (Department) gives notice that on April 27, 2009, an arbitration panel rendered a decision in the matter of Jerry Manganello, et al. v. Pennsylvania Office of Vocational Rehabilitation, Case No. R-S/07-7. 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, Jerry Manganello, et al.

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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), call the Federal Relay Service (FRS), toll free at 1-800-877-8339.

Individuals with disabilities may obtain this document in an accessible 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. 107-2(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.


Jerry Manganello, et al. (Complainants) alleged violations of the Act and its implementing regulations in 34 CFR part 395 by the Pennsylvania Office of Vocational Rehabilitation, the State licensing agency (SLA). Specifically, Complainants alleged that the SLA improperly administered the Randolph-Sheppard Vending Facility Program as provided by the Act, implementing regulations, and State rules and regulations by failing to comply with a unanimous vote of the Committee of Blind Vendors (CBV) concerning unassigned vending machine income and the payment of set-aside fees to the SLA.

The SLA, in the overall operation and administration of Pennsylvania's Randolph-Sheppard vending program, established several funds to receive monies from various sources. Fund 33 receives monies paid by blind vendors from the net profits of vending facilities and vending machine income on Federal property. Fund 650 receives monies from vending machines operated by blind vendors at interstate highway rest areas.

In 1998, the CBV by referendum agreed to use 85 percent of the funds in Fund 650 for medical benefits and to permit the SLA to use the balance for programmatic purposes. However, the CBV alleged that, in practice, the SLA used 15 percent of the funds in Fund 650 to support SLA program staff salaries.

Conversely, the SLA alleged that between 1998 and 2005, it asked the CBV to approve the use of part of the accrued balance in Fund 650 for programmatic purposes and that whenever the SLA's request was not approved, the money remained in Fund 650.

In 2005, because of increased health insurance premiums, CBV unanimously Start Printed Page 48957passed three referenda. The first referendum requested that the SLA forego its 15 percent of the annual revenue that accrued in Fund 650. Instead, the SLA would apply 100 percent of the revenue to the vendors' health insurance plan. The second referendum requested that the SLA transfer the unused balance of its 15 percent in Fund 650 to the vendors' health insurance account. The third referendum requested that the SLA transfer $650,000 from Fund 33 to the vendors' health insurance account so the money could be used to cover an impending shortage.

The Complainants alleged, however, that the SLA did not comply with the three referenda and actually transferred a substantial sum of the money to its own account to pay retroactive salaries of program staff.

A State fair hearing on this matter was held. On May 6, 2007, the hearing officer issued a decision affirming the CBV's complaint, finding that the SLA had violated CBV's right to actively participate in the SLA's administrative decision making concerning the collection and use of unassigned vending machine income and set-aside funds. The hearing officer ruled that (1) the SLA should return funds collected from the unassigned vending machine income used to pay for staff salaries, and (2) in all future major decisions, the SLA should allow active participation by the CBV.

Following the hearing officer's decision, the SLA filed a petition for review with the Commonwealth Court of Pennsylvania. On January 28, 2008, the court denied the SLA's appeal. The SLA then filed a motion for re-argument, which was denied by the court on March 14, 2008. Subsequently, the CBV requested review and enforcement by a Federal arbitration panel of the May 7, 2007, hearing officer's decision.

Arbitration Panel Decision

After a hearing at which all testimony was presented and following extensive negotiations, the panel majority and the parties were able to reach a settlement and entered into a Settlement agreement. The panel ruled that the Settlement Agreement would become the panel's final Decision and Award. Additionally, the parties have agreed that the terms of the Settlement Agreement should not be revealed or disclosed.

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

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Dated: August 9, 2010.

Alexa Posny,

Assistant Secretary for Special Education and Rehabilitative Services.

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[FR Doc. 2010-19949 Filed 8-11-10; 8:45 am]