[Federal Register Volume 60, Number 111 (Friday, June 9, 1995)]
[Notices]
[Pages 30527-30528]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14219]
-----------------------------------------------------------------------
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.
-----------------------------------------------------------------------
SUMMARY: Notice is hereby given that on July 22, 1993, an arbitration
panel rendered a decision in the matter of Albert W. Travers v.
Maryland Division of Vocational Rehabilitation, (Docket No. R-S/92-7).
This panel was convened by the Department of Education pursuant to 20
U.S.C. 107d-1(a), upon receipt of a complaint filed by petitioner,
Albert Travers, on May 22, 1992. The Randolph-Sheppard Act (the Act)
provides a priority for blind individuals to operate vending facilities
on Federal property. Under this section of the Act, a blind licensee,
dissatisfied with the State's operation or administration of the
vending facility program authorized under the Act, may request a full
evidentiary hearing from the State licensing agency (SLA). If the
licensee is dissatisfied with the SLA's decision, the licensee may file
a complaint with the Secretary of Education, who then is required to
convene an arbitration panel to resolve the dispute.
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, 600 Independence Avenue, SW., Room 3230,
Switzer Building, Washington, DC. 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 in the Federal Register a
synopsis of each arbitration panel decision affecting the
administration of vending facilities on Federal property.
Background
The complainant, Albert W. Travers, is a blind vendor licensed by
the respondent, the Maryland Division of Vocational Rehabilitation,
pursuant to the Randolph-Sheppard Act, 20 U.S.C. 107 et seq. The
Maryland Division of Vocational Rehabilitation (DVR) is the SLA
responsible for the operation of the Maryland vending facility program
for blind individuals.
The complainant operates a Randolph-Sheppard snack bar located on
the ground floor of the Fallon Federal Office Building at 31 Hopkins
Plaza, Baltimore, Maryland. This facility [[Page 30528]] is identified
as Facility #63 by the SLA. The current permit listing items to be sold
by Facility #63 provided that both hot and cold beverages may be sold.
However, the permit did not specify the nature of the beverage nor were
there restrictions on the type of container.
Located on the same floor with Facility #63 is another Randolph-
Sheppard facility identified as Facility #54. Facility #54 was
permitted to sell canned and bottled beverages in May of 1987.
In May 1990, the vendor at Facility #54 filed a grievance against
Mr. Travers alleging unfair competition due to the sale of similar
products. The SLA's regulations pursuant to the Code of Maryland Rules
(COMAR) Section 13A provides for a committee of peers to review
complaints between two or more blind vendors managing facilities on the
same property. A peer review was conducted in June of 1990. On July 11,
1990, the peer review panel ruled in favor of complainant.
Subsequently, the vendor of Facility #54 appealed this decision and
requested an administrative review, which was held on October 30, 1990.
On November 9, 1990, the Director of the Office of Program and
Administrative Support Services issued a determination that competition
existed between Facilities #63 and #54. The decision of the SLA was to
take steps to minimize the competitive situation between Facility #63
and Facility #54. The Director decided that Facility #54 should be
authorized to sell canned and bottled sodas and that Facility #63
should be authorized to sell fountain sodas. The Director further
decided that both Facility #54 and Facility #63 should be authorized to
sell bottled water and canned and bottled juices.
On December 4, 1990, complainant requested a full evidentiary
hearing to appeal the Director's decision. The hearing officer affirmed
the Director of Office Program and Administrative Support Services'
decision that Mr. Travers should not be permitted to sell bottled
sodas. On April 10, 1992, the SLA affirmed the decision of the hearing
officer.
The complainant, Albert Travers, on May 22, 1992, filed a request
with the Secretary of Education to convene an arbitration panel to hear
an appeal of his grievance. An arbitration hearing was conducted on
March 16, 1993, pursuant to the Act. The complainant was challenging
the SLA's actions on the grounds that (1) the SLA lacked the legal
authority to act unilaterally to effectively amend the operating
permits without the concurrence of either the Federal property managing
agency, GSA, or complainant and over the objections of both; (2) no
basis was shown to restrict complainant's sale of non-natural bottled
sodas, given the lack of any evidence concerning the impact of
competition upon the operations conducted by complainant or by another
program vendor; (3) the SLA failed to adhere to its own regulations and
internal Administrative Manual in the handling of the unfair
competition claim; and (4) the SLA improperly attempted to
retroactively apply its Administrative Manual against complainant.
Arbitration Panel Decision
The majority of the panel found that the Randolph-Sheppard Act is
silent on the issue of limiting competition between two or more program
vendors at a single Federal installation. The Act does provide for a
sharing of vending machine income in cases of more than one program
vendor operating at a single Federal installation. The panel found that
the SLA does have a legitimate interest in restricting ``ruinous
competition'' between program vendors since ``ruinous competition''
would deprive one or both program vendors of the ability to survive
economically and would be contrary to the intent of the Act.
The panel ruled that, based upon the record of evidence viewed in
its entirety, the SLA's actions were arbitrary and capricious and
unsupported by any specific factual evidence as to the impact of
competition between Mr. Travers and the vendor of Facility #54 relating
to the sale of bottled sodas. The panel reasoned that, absent that
factual evidence, no conclusion could be drawn regarding the
competition as unfair or ruinous. The SLA's actions were not supported
procedurally or substantively or by its Administrative Manual or by any
other cited regulatory or statutory authority that would allow the SLA
to retroactively eliminate the sale of products that were authorized by
the operating permit and that were not restricted by a valid operating
agreement.
The panel found that the SLA failed to adequately take into account
the fact that Mr. Travers had been selling bottled sodas for an
extended period of time before the vendor of Facility #54 attempted to
compete with him. The panel found that the final decision of the SLA
arbitrarily and capriciously drew a distinction between ``natural''
bottled sodas and ``non-natural'' bottled sodas, which led to the
absurd results of complainant selling exclusively bottled 7-Up and
bottled Birch Beer and the vendor of Facility #54 selling bottled Diet
7-Up and bottled Root Beer. No rationale was provided for
distinguishing between ``natural'' and ``non-natural'' sodas.
The panel directed the SLA to rescind its final agency
determination regarding the restriction of complainant to sell bottled
sodas. The SLA was precluded from attempting to force the complainant
to sign an operating agreement that would contain such a restriction.
The panel specifically noted the SLA's authority pursuant to State
regulations to insist that complainant enter into a valid operating
agreement governing the operation of his facility.
A panel member issued a concurring opinion but disagreed with the
panel's findings that complainant's request for reimbursement for costs
and attorney's fees was outside the jurisdiction of the panel. That
panel member urged the panel to award costs of the arbitration to the
complainant.
The views and opinions expressed by the panel do not necessarily
represent the views and opinions of the U.S. Department of Education.
Dated: June 6, 1995.
Judith E. Heumann,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 95-14219 Filed 6-8-95; 8:45 am]
BILLING CODE 4001-01-P
