FR Doc 05-20930
[Federal Register: October 19, 2005 (Volume 70, Number 201)]
[Page 60804-60805]
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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 October 18, 2004, an 
arbitration panel rendered a decision in the matter of Bert Hansen, et 
al. v. Nevada Department of Rehabilitation, Bureau of Services to the 
Blind (Docket No. R-S/03-05 and 03-07 consolidated). 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 
petitioners, Bert Hansen, et al.

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 concerned two separate complaints that were 
consolidated into one case in the interest of judicial economy. The 
complainants 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, Bureau of Services to the Blind and Visually Impaired, 
the State licensing agency (SLA).
    A summary of the facts in the first part of the complaint is as 
follows: On January 11, 2002, Mr. Bert Hansen, Chairman of the Nevada 
Committee of Blind Vendors, wishing to ensure that the 2002 election of 
Elected Committee of Blind Vendors (Committee) would be carried out in 
accordance with State rules and policy, wrote to the SLA on behalf of 
the Committee.
    In his letter, Mr. Hansen noted that the 1999 bylaws of the 
Committee were not certified as required by the Nevada Administrative 
Code, section 426.080.2. Mr. Hansen suggested that, since clarification 
of the 1999 bylaws was needed, the 1983 certified bylaws be used for 
the 2002 election process. However, by memorandum dated January 30, 
2002, the SLA rejected the Committee's proposal and indicated that the 
SLA would conduct its own Committee election. On February 24, 2002, 
under the leadership of Mr. Hansen, the Committee held the 2002 
    Subsequently, the SLA informed the Committee it was holding a new 
election that took place on April 7, 2002. The complainants alleged 
that the SLA election was held without the participation of the 
Committee and that the individuals elected on April 7 were different 
from those elected on February 24. The complainants further alleged 
that the April 7 election was improperly

[[Page 60805]]

constituted under the bylaws being used by the SLA.
    Following the April 7 election, the complainants petitioned the SLA 
to conduct another election. On March 21, 2002, the SLA denied the 
complainants' petition. Subsequently, complainants filed for a State 
evidentiary hearing on the matter that was held on May 30, 2002.
    Regarding the second part of the complaint, complainants alleged 
problems with the SLA's administration of the Nevada vending facility 
program following an audit at the Hoover Dam by the State Legislative 
Counsel Bureau (LCB) on April 12, 2001. In particular, the complainants 
were upset with the audit report that indicated that high levels of 
set-aside payments were being assessed against the blind vendors. On 
July 28, 2001, the Committee comprised of the complainants voted to 
suspend set-aside payments to the SLA for July and August 2001.
    On October 4, 2001, the SLA, following State rules and regulations, 
issued to the complainants notices of noncompliance in making timely 
set-aside payments. Dissatisfied with the noncompliance notices, the 
complainants requested a State evidentiary hearing that was held on 
March 29 and 30, 2002.
    On February 28, 2003, a hearing officer affirmed the SLA's decision 
to deny complainants' request for a new election. In that same 
decision, the hearing officer affirmed the SLA's issuance of the 
noncompliance notices regarding complainants' nonpayment of set-aside 
payments, but reversed the late payment penalties assessed by the SLA.
    Additionally, the hearing officer ruled that the Committee had 
actively participated in setting the set-aside payment schedule, but 
required the SLA to maintain adequate records to support the set-aside 
payments charged. The SLA adopted the hearing officer's February 28 
decision as final agency action, and complainants sought review of that 
decision by a Federal arbitration panel.

Arbitration Panel Decision

    The issues heard by the panel were: (1) Whether the SLA abused its 
authority, violated the Act, implementing regulations, and the Nevada 
Administrative Code and the functions of the Committee in conducting a 
Committee election; (2) whether the complainants' unilateral decision 
to withhold payment of set-aside fees for the months of July and August 
2001 violated the Act and/or applicable Nevada statutory law; (3) 
whether the SLA had the authority to compel the complainants to repay 
the set-aside payments and/or to impose penalties on the complainants; 
and (4) whether the SLA was properly administering the vending facility 
program in accordance with the Act, implementing regulations, and State 
rules and regulations.
    After reviewing all of the records and hearing testimony of 
witnesses, the panel majority ruled concerning the election issue that 
the SLA acted in substantial compliance with the Act and regulations 
when it conducted the Committee election in April 2002.
    Concerning the withholding of set-aside payments, the majority of 
the panel ruled that the complainants' withholding of set-aside 
payments in July and August of 2001 was not in compliance with the Act 
or applicable provisions of the Nevada Administrative Code. 
Accordingly, the panel directed the complainants to repay the set-aside 
payments to the SLA but without penalty. Regarding the question of the 
SLA's administration of the vending facility program, the majority of 
the panel ruled that the SLA's actions were consistent with the Act.
    One panel member dissented.
    One panel member concurred with the majority opinion concerning the 
election of the Committee and complainants' noncompliance with the Act 
and regulations in withholding set-aside payments from the SLA, but 
dissented in part regarding the appropriate remedy, believing that the 
complaints should repay the set-aside fees with penalty.
    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: October 14, 2005.
John H. Hager,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 05-20930 Filed 10-18-05; 8:45 am]