Using optionLabel in conjunction with template produces undesirable effect. In this case both ${ data.State } and ${ data.Representative } come back as undefined. You should not apply template on optionLabel.dataTextField: "District",
dataValueField: "District",
filter: "contains",
optionLabel: "----------------",
template: kendo.template("${ data.State } ${ data.District } - ${ data.Representative }"),
6 Answers, 1 is accepted

"#if (!data.State) { # ${ data.District } # } else { # ${ data.State } ${ data.District } - ${ data.Representative } # } #"
Current "optionLabel" implementation appends a fake dataItem at the begining of the data returned by the dataSource. This fake dataItem has the dataTextField and the dataValueField properties. That is why other properties will be undefined. I believe that all items should use the defined template in order to have equal design (if any). When the optionLabel is used, then you will need to customize your template in order to handle properties, which might be undefined.
We decided to further improve this behavior in our next release of KendoUI. An "optionLabel" property which will be added to the dateItem passed to the template. Thus, if the property is true, you can easily determine what to show in the template. Let me know if this works for you.
Georgi Krustev
the Telerik team

Would not it be easier to change optionLabel to optionDataItem alowing user to assign to it an object that mimics structure of actual data object with fields containing default values?
This seams to be a better idea than passing an optionLabel flag. Most probably we will provide the ability to set a text or an object to the optionLabel option. Thus you can define a more complex object then the one, which dropdownlist builds now. We will try to introduce this enhancement for the official release of KendoUI.
Georgi Krustev
the Telerik team

I would to know if you finally introduced the mentioned enhancement.
Thanks.
This has already been implemented. I would suggest you check this help topic for more information.
Regards,
Georgi Krustev
Telerik