[Federal Register Volume 59, Number 140 (Friday, July 22, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17837]


[[Page Unknown]]

[Federal Register: July 22, 1994]


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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: Notice is hereby given that on March 22, 1991, an arbitration 
panel rendered a decision in the matter of David Terry, Vendor, v. 
State of Tennessee, Department of Human Services (Docket No. R-S/89-4). 
This panel was convened by the Secretary of the Department of Education 
pursuant to 20 U.S.C. 107d-2, upon receipt of a complaint filed by 
petitioner David Terry.

FOR FURTHER INFORMATION CONTACT: A copy of the full text of the 
arbitration panel decision may be obtained from George F. Arsnow, U.S. 
Department of Education, 400 Maryland Avenue SW., Room 3230, Switzer 
Building, Washington, D.C. 20202-2738. Telephone: 202-205-9317. 
Individuals who use a telecommunications device for the deaf (TDD) may 
call the TDD number at 202-205-8298.

SUPPLEMENTARY INFORMATION: Pursuant to the Randolph-Sheppard Act (20 
U.S.C. 107d-2(c)), the Secretary publishes a synopsis of arbitration 
panel decisions affecting the administration of vending facilities on 
Federal property.

Background

    David Terry, complainant, is a blind vendor licensed by the 
respondent, the Tennessee Department of Human Services (TDHS). Mr. 
Terry signed an agreement with TDHS to operate vending facility #249 
located in the Safety Building in Knoxville, Tennessee. He began 
operation in July 1986. TDHS was given the right to establish and 
maintain a food concession at the Public Safety Building by entering 
into an agreement with the City of Knoxville, Tennessee, on March 21, 
1972.
    The State Licensing Agency (SLA), through its Department of 
Rehabilitation, operates the Tennessee Vending Facility Program for 
blind vendors. The purpose of the program is to establish and support 
blind vendors operating vending facilities on State, local, and Federal 
property. As the agency designated in Tennessee to carry out and manage 
the vending facility program established by the Act, the SLA duly 
promulgated rules and regulations to govern the State vending facility 
program. These rules and regulations are comprehensive in scope. Based 
on the State's Randolph-Sheppard rules and regulations governing its 
program, Mr. Terry was required to make monthly income reports, paying 
a set-aside fee based upon those monthly reports, and to maintain 
personal liability and product liability insurance.
    Mr. Terry, as noted previously, began his operation in July 1986. 
The major part of his sales came from persons employed in the building 
and from trustees and inmates of the City Jail located on the second 
floor. In December 1986, only five months after Mr. Terry started his 
operation, the City of Knoxville transferred operation of the City Jail 
to the Knox County Sheriff's Department. The Sheriff's Department 
established on the second floor its own food commissary operated by a 
sighted person and placed a cigarette machine on that floor as well. In 
January 1987, Mr. Terry complained to his business enterprise counselor 
regarding the new commissary and vending machine possibly violating the 
priority provided by the State rules and regulations to licensed blind 
persons. As a result of Mr. Terry's complaint, the cigarette machine 
was removed in February 1987. However, the commissary remained. Mr. 
Terry then complained to the Committee of Blind Vendors, the State 
representative body for all blind vendors. In July, the Sheriff agreed 
to allow Mr. Terry to operate a concession booth in the Jail Intake 
Center, but, within a week, the Sheriff reversed this decision due to 
alleged safety and security reasons.
    During the operation of his vending facility, Mr. Terry was warned 
about his poor performance in failing to file the required monthly 
reports and to pay the set-aside fees. Due to these reasons, the agency 
terminated Mr. Terry's license in March 1988.
    Mr. Terry filed a grievance on April 26, 1988, regarding the 
termination of his license. He also sought financial relief for the 
period prior to his termination during which the Sheriff permitted 
operations that competed with his facility. The Hearing Officer and the 
TDHS Commissioner denied the complaint. The TDHS Commissioner found 
that the evidence did not establish that Mr. Terry sustained damages 
because of the Sheriff's actions.
    Mr. Terry then filed a complaint with the U.S. Department of 
Education on January 6, 1989, requesting arbitration. The arbitration 
panel was convened, and the hearing was held in Knoxville, Tennessee, 
on September 21, 1990.

Arbitration Panel Decision

    In the substantive issues in this case, the panel agreed that Mr. 
Terry was harmed by the competing commissary and cigarette machine 
established by the Sheriff, thereby diverting sales previously enjoyed 
by Mr. Terry. The panel also concluded that Mr. Terry was partly 
responsible for the circumstances leading to his license termination 
because he was consistently delinquent in filing his reports and in 
paying his fees. This conduct began prior to the Sheriff's actions. The 
panel found that the adverse impact on Mr. Terry's facility was 
relevant to his inability to pay set-aside fees and to some extent to 
the quality of his operations. Because of this adverse impact, the 
panel found that there was good cause for the failure of Mr. Terry to 
pay the required set-aside fees. In determining damages due Mr. Terry, 
the panel took into consideration the fact that Mr. Terry contributed 
to the circumstances that led to the termination of his license.
    Mr. Terry claimed he was due damages in the amount of $400.00 per 
month from January 1987 through April 1988 (the month of the 
termination of his license) or $6,400, and $1,500 for each month since 
the termination of his license or $49,500. Because Mr. Terry's losses 
were caused in part by his own delinquencies, the panel ordered the SLA 
to pay Mr. Terry the sum of $30,000, less set-aside fees he owes the 
agency in full and less his interim earnings in full. The arbitration 
panel also ordered that Mr. Terry be reinstated in the program at a 
facility reasonably equivalent to the Public Safety Building. The panel 
concluded that attorney's fees were allowable.
    The panel member selected by the SLA filed a dissenting opinion in 
which he maintained that the State was entitled to the sovereign 
immunity embodied in the Eleventh Amendment to the United States 
Constitution. In his opinion, the State did not waive this immunity by 
participating in the Randolph-Sheppard program and did not have to pay 
monetary damages.
    The views and opinions expressed by the panel do not necessarily 
represent the views and opinions of the U.S. Department of Education.

    Dated: July 18, 1994.
Thomas Hehir,
Acting Assistant Secretary for Special Education and Rehabilitative 
Services.
[FR Doc. 94-17837 Filed 7-21-94; 8:45 am]
BILLING CODE 4000-01-P