FR Doc 2010-19949
[Federal Register: August 12, 2010 (Volume 75, Number 155)]
[Page 48956-48957]
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 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.

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), 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 

SUPPLEMENTARY INFORMATION: 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 


    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 

[[Page 48957]]

passed 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.

Electronic Access to This Document

    You may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or Adobe 
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free at this site.

    Note:  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:

    Dated: August 9, 2010.
Alexa Posny,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 2010-19949 Filed 8-11-10; 8:45 am]