99-32668. Arbitration Panel Decision Under the Randolph-Sheppard Act

[Federal Register Volume 64, Number 241 (Thursday, December 16, 1999)]
[Notices]
[Pages 70228-70229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32668]


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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 November 12, 1998, an 
arbitration panel rendered a decision in the matter of Steven Erickson 
v. Washington Department of Services for the Blind (Docket No. R-S/97-
1). This panel was convened by the U.S. Department of Education 
pursuant to 20 U.S.C. 107d-1(a) upon receipt of a complaint filed by 
petitioner, Steven Erickson.

FOR FURTHER INFORMATION: 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, Mary E. Switzer 
Building, Washington DC 20202-2738. Telephone: [phone]. If you 
use a telecommunications device for the deaf (TDD), you may call the 
TDD number at [phone].
    Individuals with disabilities may obtain this document in an 
alternate format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.

Electronic Access to This Document

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[[Page 70229]]

Access at: http://www.access.gpo.gov/nara/index.html.

SUPPLEMENTARY INFORMATION: Pursuant to 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

    This dispute concerns the alleged violation of the Act by the 
Washington Department of Services for the Blind, the State licensing 
agency (SLA), in denying Mr. Steven Erickson's request to operate 21 
vending machines located outside his snack bar facility. A summary of 
the facts is as follows: Mr. Steven Erickson, the complainant, was 
licensed by the SLA on May 1, 1992, to operate a snack bar facility, 
which included vending machines, at the Madigan Army Hospital Medical 
Center in Fort Lewis, Washington.
    In addition to the vending machines located inside the snack bar 
and operated by the complainant, there were 21 other vending machines 
at various locations throughout the hospital center. These vending 
machines were operated and serviced by a private vending company 
through a contract with the SLA. During 1992 and 1993, as required 
under the Act, Mr. Erickson received all income generated from the 21 
vending machines. In 1995, complainant submitted a request to the SLA 
that he be permitted to operate the 21 vending machines. This request 
was denied by the SLA. Mr. Erickson challenged the SLA's refusal to 
allow him to operate these vending machines.
    The SLA alleged that, as the agency designated to administer the 
Randolph-Sheppard program in the State of Washington, it had the 
responsibility to arrange for the placement and operation of vending 
equipment at the Madigan Army Hospital Medical Center. The SLA further 
alleged that it had valid business reasons for its decision to contract 
out the operation of the 21 vending machines to a private vending 
company.
    Mr. Erickson requested and received an administrative review of 
this matter on February 5, 1996. As a result of an adverse decision, 
the complainant requested an evidentiary hearing, which was held on 
March 14, 1996. The hearing officer issued a final order on May 9, 
1996, finding that the decision by the SLA to contract out the 21 
vending machines to a private contractor was a lawful exercise of the 
agency's discretion and should be affirmed. Mr. Erickson filed for 
reconsideration of the decision on May 15, 1996. The SLA denied the 
petition for reconsideration on May 24, 1996. The SLA adopted the 
hearing officer's decision as final agency action, and it is this 
decision that Mr. Erickson sought to have reviewed by a Federal 
arbitration panel. A Federal arbitration hearing on this matter was 
held on September 24 and 25, 1997.

Arbitration Panel Decision

    The issues before the arbitration panel as raised in the complaint 
were: (1) Whether the order and actions of the Director of the SLA 
failed to give priority to blind vendors as required by the State 
statute; (2) whether there was substantial evidence to support the 
Administrative Law Judge's (ALJ) conclusion that only profits from 
vending machines inside the snack bar facility were included in the 
vendor agreement between complainant and the SLA; (3) whether the order 
and actions of the SLA are arbitrary and capricious with regard to 
determining which public facilities are available for contracting to 
blind vendors; (4) whether there was substantial evidence to support 
the ALJ's finding that the operation of the vending machines by the 
complainant would place an undue financial burden on the SLA; and (5) 
whether the SLA correctly concluded that vending machines at the 
Madigan Army Hospital Medical Center outside the snack bar are not 
available to blind vendors.
    The majority of the arbitration panel found that neither the Act, 
its implementing regulations, nor the State regulations precluded the 
SLA from determining that it best served the objectives and needs of 
the community of blind vendors to divide the permit into two components 
consisting of a blind vendor's snack bar/espresso bar/cart and a 
vending machine route operated by a private vending company. This 
arrangement allowed for the distribution of a percentage of the profits 
to the SLA, thus allowing the SLA to serve the collective needs of all 
of the blind vendors.
    The panel further concluded that, while the complainant had every 
right to seek to improve his economic status, his needs conflicted with 
the SLA's concerns and needs to serve the broader interests of all the 
blind vendors in the program. In the view of the SLA, licensing 
individual blind vendors to operate vending machine routes could leave 
the program without adequate funds to serve the collective needs of all 
of the blind vendors.
    Accordingly, the majority of the panel found that the SLA acted 
within the scope of its authority. The division of the permit at the 
Madigan Army Hospital Medical Center was lawful, and deference must be 
given to the SLA's expertise in administering the Act in the broad 
interest of all the blind vendors.
    One panel member dissented.
    The views and opinions expressed by the panel do not necessarily 
represent the views and opinions of the U.S. Department of Education.

    Dated: December 10, 1999.
Judith E. Heumann,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 99-32668 Filed 12-15-99; 8:45 am]
BILLING CODE 4000-01-P