FR Doc 05-20929
[Federal Register: October 19, 2005 (Volume 70, Number 201)]
[Page 60803-60804]
From the Federal Register Online via GPO Access []
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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 gives notice that on June 17, 2005, an 
arbitration panel rendered a decision in the matter of Arizona 
Department of Economic Security, Rehabilitation Services Division v. 
United States Postal Service (Docket No. R-S/03-4). This panel was 
convened by the U.S. Department of Education, under 20 U.S.C. 107d-
1(b), after the Department received a complaint filed by the 
petitioner, Arizona Department of Economic Security, Rehabilitation 
Services Division.

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: (202) 245-7374. 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 in the preceding 

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 


    This dispute concerns the alleged improper payment of commissions 
to the United States Postal Service (USPS) by two blind licensees in 
violation of the Act (20 U.S.C. 107 et seq.) and the

[[Page 60804]]

implementing regulations in 34 CFR part 395.
    A summary of the facts is as follows: The Arizona Department of 
Economic Security, Rehabilitation Services Division, the State 
licensing agency (SLA), alleged that between December 1995 and July 
2001, Mr. Robert Kunau operated a vending facility at the Rio Salado 
Post Office and paid to USPS a 10 percent commission on his gross sales 
totaling $116,684.02.
    Similarly, the SLA alleged that since 1988 Mr. Scott Weber operated 
a vending facility at the Phoenix General Mail Facility (PGMF). In 
1995, Mr. Weber assumed the operation of additional vending machines at 
PGMF. From October 1995 to May 2001, Mr. Weber also paid to USPS a 10 
percent commission on his gross sales totaling $88,444.57. Both vendors 
alleged that they paid the 10 percent commission to USPS as required by 
the agency until they were advised by their attorney to cease payment.

Arbitration Panel Decision

    The issue heard by the panel was whether the actions taken by USPS 
violated the Act and implementing regulations concerning the placement 
and operation of vending facilities at the Rio Salado Post Office and 
the Phoenix General Mail Facility. If there was a violation, the panel 
was asked to determine the appropriate remedy.
    After reviewing all of the records and hearing testimony of 
witnesses, the panel concluded that the Act requires Federal agencies 
to give priority to blind vendors in the operation of vending 
facilities on Federal properties. To accomplish this, Federal agencies 
and SLAs enter into permit agreements authorizing the operation of 
vending facilities by licensed blind vendors. However, the panel noted 
that the Act does not authorize Federal agencies to collect commissions 
from a blind vendor or the SLA without the authorization of the 
Secretary of Education. Moreover, Federal agencies are not permitted to 
go outside the Department of Education's regulations and substitute a 
negotiated vending agreement in place of the permit system.
    Therefore, because USPS failed to obtain authorization from the 
Secretary of Education, the collection of commissions was a violation 
of the Act. Accordingly, the panel ruled that both Mr. Kunau and Mr. 
Weber were damaged by USPS's violation of the Act in the amounts of 
$116,684.02 and $88,444.57, respectively.
    The panel further directed that, subject to any future finding by a 
court of competent jurisdiction that this order exceeds the panel's 
authority under the Act, USPS must reimburse Mr. Kunau and Mr. Weber 
the amounts that they were damaged as a result of USPS's violation of 
the Act.
    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.

Electronic Access to This Document

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Education documents published in the Federal Register, in text or Adobe 
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    Note: The official version of this document is the document 
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Regulations is available on GPO Access at:

    Dated: October 14, 2005.
John H. Hager,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 05-20929 Filed 10-18-05; 8:45 am]