FR Doc 05-15284
[Federal Register: August 3, 2005 (Volume 70, Number 148)]
[Page 44592-44593]
From the Federal Register Online via GPO Access []
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Arbitration Panel Decision Under the Randolph-Sheppard Act

AGENCY: Department of Education.

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


SUMMARY: The Department gives notice that on November 9, 2004, an 
arbitration panel rendered a decision in the matter of Arland Stratton 
v. Illinois Department of Human Services, Office of Rehabilitation 
Services (Docket No. R-S/03-1). 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 petitioner, Arland 

FOR FURTHER INFORMATION CONTACT: 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 

SUPPLEMENTARY INFORMATION: 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 


    This dispute concerns the alleged improper termination of Mr. 
Arland Stratton's vending license as a blind licensee under the 
Randolph-Sheppard vending facility program by the Illinois Department 
of Human Services, Office of Rehabilitation Services, the State 
licensing agency (SLA), in violation of the Act (20 U.S.C. 107 et 
seq.), the implementing regulations in 34 CFR part 395, and State rules 
and regulations.
    A summary of the facts is as follows: Mr. Arland Stratton 
(complainant) operated Vending Facility 451 (Facility 
451) at the Illinois Prairie Rest Area, I-57 in Champaign, 
Illinois, until April 1, 2002, when his vending license was terminated.
    Previously, on March 28, 2002, complainant alleged that he reported 
to his business counselor at the SLA during the counselor's onsite 
visit to Facility 451 that a possible bookkeeping error may 
have resulted in his using program assets for personal use. Upon 
complainant's disclosure of the alleged bookkeeping error, the business 
counselor informed the SLA's Director of the Business Enterprise 
Program (BEP). The Director of the BEP instructed the business 
counselor to do a complete inventory of Facility 451 and to 
remove the keys from complainant's possession.
    Complainant further alleged that the SLA's termination of his 
vending operator's license and removal from Facility 451 
occurred without first providing him with an opportunity for a full 
evidentiary hearing, in violation of the Act and implementing 
    The SLA alleged that complainant, as a blind vendor, had been 
licensed, trained, and certified in the operation and management of 
vending facilities in the Illinois BEP. The SLA also stated that 
complainant was aware of the policies governing vending facilities and, 
in particular, the rules concerning use of program funds for personal 
    The SLA further alleged that in August 2001 the complainant's 
business counselor found him to be deficient in financial management 
practices and his paperwork to be unorganized. In January 2002, 
complainant received a written reprimand for a second violation of a 
State rule regarding accounting procedures. On March 19, 2002, the 
complainant's business counselor scheduled a financial audit. At the 
time of the audit, the business counselor alleged that complainant 
provided incomplete and incorrect paperwork, and the vendor was given 
one week to provide all of the correct information.
    Following termination of his vending license, complainant filed for 
an administrative hearing. The hearing was held on June 10, 2002. In a 
decision dated July 8, 2002, the hearing officer affirmed the SLA's 
decision to terminate complainant's vending license and removal from 
Facility 451. The SLA adopted the hearing officer's decision 
as final agency action, and complainant sought review of that decision 
by a Federal arbitration panel.

Arbitration Panel Decision

    The issues heard by the panel were: (1) Did the SLA violate 20 
U.S.C. 107 et seq., the implementing regulations in 34 CFR part 395, 
and its own regulations in allegedly improperly terminating the 
vendor's operating license and removing him from Facility 451, 
and (2) Did the SLA violate Federal law by removing the complainant as 
the vendor of Facility 451 and terminating his license before 
providing him with a full evidentiary hearing in those decisions?
    After reviewing all of the records and hearing testimony of 
witnesses, the panel ruled as follows: On the first issue, the panel 
ruled that the Federal regulations in 34 CFR 395.7(b) provide for the 
termination of a vendor's license after an SLA has afforded the vendor 
a full evidentiary hearing and must be applied as written. The panel 
concluded that a vendor's license could not be terminated before a 
State fair hearing was held. However, the panel noted that the SLA's 
authority to remove complainant from his facility was not in question 
as distinguishable from terminating his vending license.
    Concerning the second issue, the panel ruled that the termination 
of complainant's vending license was not consistent with the 
rehabilitative purposes of the Act to provide training and additional 
services to blind licensees.
    Finally, the panel was divided on the appropriate remedy. The 
majority of the panel ruled that complainant's license must be 
restored, and, upon successful completion of a retraining program, 
complainant was to be placed in a suitable location with provisions for 
follow-up supervision and training by the SLA. The panel further ruled 
that, since the SLA had not previously collected the outstanding debt 
from complainant, it should be forgiven allowing him to begin anew.
    One panel member concurred with the majority decision on the 
finding of a violation but dissented in part regarding the appropriate 
remedy, believing that complainant was entitled to lost wages, 
compensatory relief, and attorney's fees.

[[Page 44593]]

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

Electronic Access to This Document

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    Note: The official version of this document is the document 
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    Dated: July 28, 2005.
John H. Hager,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 05-15284 Filed 8-2-05; 8:45 am]