[Federal Register: December 16, 1999 (Volume 64, Number 241)]
[Page 70228-70229]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



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 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: (202) 205-9317. If you
use a telecommunications device for the deaf (TDD), you may call the
TDD number at (202) 205-8298.
    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

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.


    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
    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]