[Federal Register Volume 76, Number 11 (Tuesday, January 18, 2011)]
[Notices]
[Pages 2890-2891]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-922]
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DEPARTMENT OF EDUCATION
Arbitration Panel Decision Under the Randolph-Sheppard Act
AGENCY: Department of Education.
ACTION: Notice of arbitration panel decision under the Randolph-
Sheppard Act.
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SUMMARY: The Department of Education (Department) gives notice that on
March 31, 2010, an arbitration panel rendered a decision in the matter
of Daniel Czubak v. Illinois Department of Human Services, Division of
Rehabilitation Services, Case no. R-S/08-5. 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, Daniel Czubak.
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), 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.
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
property.
Background
Daniel Czubak (Complainant) alleged violations by the Illinois
Department of Human Services, Division of Rehabilitation Services, the
State licensing agency (SLA), under the Act and implementing
regulations at 34 CFR part 395. The allegations pertained to his
operation of a vending facility comprised of vending machines at the
Shapiro Developmental Center (SDC) from November 2005 until February
2009 when his vending operator's agreement at the SDC was terminated by
the SLA.
The Complainant began operation of the vending facility at SDC when
granted a Temporary Income Opportunity in 2005. Later, after being the
successful bidder and signing a vending operator's agreement in May
2006, he continued operating the facility until February 2009.
Appended to the May 2006 vending operator's agreement was a
Memorandum of Understanding (MOU) dated April 2004 between the SLA and
the SDC. As a part of the MOU, the SDC required that the SLA ensure
that the vendor operating the vending machines would make monthly
commission payments to the SDC in the amount of $3,699.00 based upon
the following: (a) Current vending machines at the SDC, (b) current
prices established for items sold in the vending machines, and (c) the
current amount of sales from the vending operation. This formula and
the commission amount were based on a report from the private
commercial operator, who previously operated the vending machines and
made monthly commission payments to SDC based on a percentage of its
vending sales.
Additionally, the MOU limited the ability of the vendor to change
prices on vended products without prior concurrence by the SDC.
Moreover, the MOU stipulated that price changes could only reflect the
increased cost of products provided for the vending facility. The MOU
also stated that the SLA or the vendor would pay any and all claims,
losses, liabilities, or other expenses, including repair expenses
arising from the operation of the vending machine facility.
The vending facility operator's agreement signed by the Complainant
in May 2006 required Complainant to comply with the MOU between the SLA
and the SDC, including the amount of commissions to be paid to the SDC.
In mid-2007, after operating the vending machine facility for
almost a year, the Complainant began having problems paying the
commission to the SDC. The Complainant alleged that the resident
population at the SDC had declined considerably since he began managing
the facility. At the same time, the Complainant alleged that his costs
for goods and supplies had increased.
On September 1, 2007, an agreement was reached between the SLA, the
SDC, and the Complainant to reduce his monthly commission payments to
$2,500 with the SLA paying the $1,199 difference to the SDC. From
September 2007 through March 2008, the SLA made the payments of $1,199
to the SDC out of Vocational Rehabilitation, Section 110 (VR 110) funds
until the SLA was advised by the U.S. Department of Education,
Rehabilitation Services Administration, that VR 110 funds could not be
used for vendor commission payments.
Thus, beginning April 2008, the Complainant was again required to
make the $3,699 monthly payment to the SDC. In early September 2008,
the director at the SDC sent a formal request to the SLA asking that
the Complainant be removed, citing a combination of factors, including
late commission payments, bounced checks, spoiled food, and safety-
related operational problems based upon complaints that the director
had received. The SLA contacted the director at the SDC and he withdrew
his request for the Complainant's removal with the stipulation that the
Complainant would be more closely supervised and that he would become
current with his commission payments. However, after October 2008, the
Complainant ceased making commission payments to the SDC.
[[Page 2891]]
Subsequently, both the Complainant and the Illinois Committee of
Blind Vendors (ICBV) filed a complaint with the SLA alleging that staff
of the Business Enterprise Program for the Blind (BEPB) entered into an
illegal agreement with the Department of Mental Health regarding
vending services at the SDC. The Complainant alleged that the SLA
agreement with the Department of Mental Health had severely affected
the Complainant's ability to earn a living. On November 12, 2008, a
hearing on this matter was held.
On December 30, 2008, the hearing officer denied both the
Complainant and ICBV's complaint stating that neither party had met the
burden of proof required to show that BEPB's actions were not in
accordance with State laws, regulations, or policy, were inappropriate,
or violated any rights of the Complainant. On December 31, 2008, the
SLA adopted the hearing officer's decision as final agency action. It
was this decision that the Complainant sought review on appeal by a
Federal arbitration panel.
Arbitration Panel Decision
After hearing testimony and reviewing all of the evidence, the
panel majority ruled that the Illinois Department of Human Services,
Division of Rehabilitation Services' determination that a blind vendor
could be required to make monthly commission payments to the SDC
regarding the vending machine facility was appropriate.
However, the panel majority concluded that the commission was too
high, the manner in which the commission was calculated and assessed
was inconsistent with the manner in which commission amounts being
charged to blind vendors at other State facilities were being
calculated and assessed, and that the commission payments were based on
the private vendor's monthly payments without regard for the
Complainant's seasonal costs or changes in the cost of purchasing
products. Accordingly, the panel majority ruled that the SLA's actions
were not in accordance with the Randolph-Sheppard Act, implementing
regulations, and State laws, rules, and regulations.
Thus, the panel majority awarded the Complainant $22,589 in
compensatory damages for overpayment of commissions to the SDC, plus
$7,000 in partial compensation for attorney fees for a total award
amount of $29,589. The panel also retained jurisdiction for 60 days
from the date of the final decision and award to monitor compliance
with the terms of the decision.
One panel member dissented from the panel majority's decision
stating that the commission structure as a whole and the way the
commission payments were determined did not violate the Act,
implementing regulations, and State law, rules, and regulations. With
regard to the remedy, the dissenter concluded that there is no
authority for the arbitration panel to order any payments to the
Complainant.
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 can view this document, as
well as all other Department of Education documents published in the
Federal Register, in text or Adobe Portable Document Format (PDF) on
the Internet at the following site: http://www.ed.gov/news/fedregister.
To use PDF you must have Adobe Acrobat Reader, which is available 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: http://www.gpoaccess.gov/nara/index.html.
Dated: January 12, 2011.
Alexa Posny,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 2011-922 Filed 1-14-11; 8:45 am]
BILLING CODE 4000-01-P