E8-21145. 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 of Education (Department) gives notice that on April 7, 2008, an arbitration panel rendered a decision in the matter of David Zelickson v. California Department of Rehabilitation, Case no. R-S/06-10). 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, David Zelickson.

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: [phone]. 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 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

Mr. David Zelickson (complainant) alleged violations by the California Department of Rehabilitation, the state licensing agency (SLA) of the Randolph-Sheppard Act (Act), and the implementing regulations in 34 CFR part 395. Complainant alleged that the SLA failed to enforce the arbitration panel decision and award in the case of California Department of Education v. General Services Administration, Case no. R-S/99-1. The aforementioned grievance was a complaint filed by the SLA regarding management of a vending facility at the Roybal Federal Building (Roybal) in Los Angeles, California where complainant was assigned as the licensed blind vendor.

Specifically, complainant received a permit from the SLA to operate the Roybal building in 1993. The permit was renewed in 1996. In November 1997, the General Services Administration (GSA) requested the removal of complainant from the Roybal building indicating its right to do so because of a change in the nature of the food service provided at the vending facility.

The SLA requested the Secretary of Education to convene a federal arbitration panel to hear this matter. A panel was convened. On December 26, 2000, the panel found that GSA was in violation of the act concerning the removal of complainant from the Roybal building. In the decision and award, the panel ruled that complainant should be reinstated to the Roybal building and that GSA was obligated to make both the complainant and the SLA whole for their economic losses. GSA did not contest the award that was final and binding.

For six years, the SLA attempted to secure voluntary compliance by GSA with the December 2000 decision and award. GSA refused until March 2006 to allow complainant to return to the Roybal building. GSA claiming sovereign immunity, also maintained that it never agreed to compensate complainant for his economic losses.

Shortly after March 2006, complainant filed a request for Federal arbitration with the secretary of Education regarding this matter. A Federal arbitration panel heard this case on August 10, 2007.

According to the arbitration panel, the issues to be resolved were as follows: (1) To what extent, if any was the SLA obligated to enforce the 2000 arbitration decision and award; (2) did the SLA meet its obligation to complainant; and (3) if not, what was the appropriate remedy.

Arbitration Panel Decision

After reviewing all of the records and hearing testimony of witnesses, the panel majority found that the SLA was obligated to enforce the 2000 arbitration decision and award and failed to meet its obligation to the complainant by not suing for enforcement of the arbitration decision and award. As discussed by the panel, a lawsuit is the only way an SLA can protect its interest in a facility it established, as well as protecting a blind vendor's interest because a blind vendor has no right to enforce an arbitration decision and award favorable to the SLA against a federal agency. As a result of this failure to protect the vendor's interest, the SLA became liable for damages that were afforded to complainant pursuant to the 2000 arbitration decision and award, which had directed GSA to pay complainant for his lost earnings. The panel determined the amount of wages lost by the vendor, but then stated that the vendor had a duty to mitigate damages. Based on the following circumstances, the panel ruled that complainant failed to mitigate his damages.

On or about August 1, 2002, the SLA had offered the complainant an opportunity to apply for another permanent facility without waiving his rights to return to the Roybal building. However, complainant argued that he lacked the financial ability to make a new vending facility operable. The panel majority rejected this argument based on complainant's previous experience in the business enterprise program and the SLA's past assistance to him. The majority concluded that it was complainant's obligation to request financial assistance from the SLA to start a new vending facility and he failed to do so. Thus, because complainant failed to mitigate his damages, the panel majority concluded that the appropriate period for computing damages should end as of August 2002, the time the SLA offered complainant the opportunity to manage a new permanent facility.

Accordingly, the panel majority ruled that the appropriate period for calculating damages was from December 1, 1997 to August 1, 2002 or a period of 56 months. Thus, the panel majority ruled that compensatory damages must be paid to the complainant by the SLA within 30 days from the date of the panel's decision calculated at the rate of $2500 per month for 56 months or $140,000. Also, the panel majority ruled that if the SLA failed to pay complainant within 30 days of the final decision, interest would be attached equivalent to what the National Labor Relations Boards computes on its awards of back pay.

Additionally, the panel majority ruled that the SLA must give the complainant a permit to operate a vending facility at the Roybal building, if the Roybal building was currently part of the business enterprise program and available, or in the alternative provide complainant a comparable vending facility. This was to be accomplished with 90 days from the date of the panel's decision. Further, the panel retain jurisdiction for a period not to exceed 90 days from the date of the award to resolve any issues relating to or compliance with the final decision and award by the SLA.

One panel member dissented.

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 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. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC, area at [phone].

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: September 8, 2008.

Tracy R. Justesen,

Assistant Secretary for Special Education and Rehabilitative Services.