Arbitration Panel Decision Under the Randolph-Sheppard Act

Summary

Notice is hereby given that on January 13, 1992, an arbitration panel rendered a decision in the matter of State of Michigan, Michigan Commission for the Blind, Petitioner v. U.S. Postal Service, Respondent. This panel was convened by the Secretary of the U.S. Department of Education pursuant to 20 U.S.C. 107d-2. The Randolph-Sheppard Act (the Act) creates a priority for blind individuals to operate vending facilities on Federal property. Under the Act, State licensing agencies dissatisfied with Federal operation of the vending facility program authorized under the Act may file an arbitration complaint with the Secretary of Education.

Full text

SUMMARY: Notice is hereby given that on January 13, 1992, an 
arbitration panel rendered a decision in the matter of State of 
Michigan, Michigan Commission for the Blind, Petitioner v. U.S. Postal 
Service, Respondent. This panel was convened by the Secretary of the 
U.S. Department of Education pursuant to 20 U.S.C. 107d-2. The 
Randolph-Sheppard Act (the Act) creates a priority for blind 
individuals to operate vending facilities on Federal property. Under 
the Act, State licensing agencies dissatisfied with Federal operation 
of the vending facility program authorized under the Act may file an 
arbitration complaint with the Secretary of Education.

FOR FURTHER INFORMATION CONTACT: George F. Arsnow, U.S. Department of 
Education, 600 Independence Avenue, S.W., Room 3230, Switzer Building, 
Washington, D.C. 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. A copy of the full text of the arbitration 
panel decision may be obtained from this contact.

SUPPLEMENTARY INFORMATION: Pursuant to section 107d-2(c) of the 
Randolph-Sheppard Act, the Secretary publishes a synopsis of each 
arbitration panel decision affecting the administration of vending 
facilities on Federal property.

Synopsis of Arbitration Panel Decision

Factual Background and Procedural History

    Since January 3, 1987, Garnett Laurell, a blind vendor licensed by 
the Michigan Commission for the Blind (the Commission), has operated 
the Central Lunchroom that includes 10 vending machines at the Detroit 
Bulk Mail Center (Mail Center) pursuant to an agreement between the 
Commission and the U.S. Postal Service (the Postal Service).
    The Canteen Corporation (the Canteen), also in an agreement with 
the Postal Service, operated approximately 21 vending machines located 
around the workroom floor and vending machines in non-workroom areas 
(administrative offices and in the truckers' lounge). The Commission 
asserted that it should have been allowed to operate the vending 
facilities operated by the Canteen (in addition to the Central 
Lunchroom) on a permit basis and that, as a result, the Postal Service 
failed to comply with provisions of the Randolph-Sheppard Act (Act), as 
amended, 20 U.S.C. 107 et seq. On May 3, 1989, the U.S. Department of 
Education ordered the convening of an arbitration panel pursuant to 20 
U.S.C. 107d-1(b), which governs disputes between State licensing 
agencies.
    Previously, on December 27, 1983, the Postal Service had notified 
the Commission that it could bid on a vending contract at the Mail 
Center. On February 12, 1984, the Postal Service issued a solicitation 
for the Central Lunchroom and snack vending at the Mail Center with 
offers due by March 13, 1985. The Commission did not submit a bid on 
the basis that it believed that it was entitled to a permit for the 
facility. The Central Lunchroom and snack vending contract was awarded 
to the Canteen on March 27, 1985, for a period of three years, with two 
possible one-year renewals at the Postal Service's option. The 
Commission's application for a permit to operate the Central Lunchroom 
at the Mail Center was submitted on November 15, 1985, and was approved 
by the Mail Center manager on January 6, 1986. In October 1987, the 
Commission submitted an application for the satellite vending operated 
by the Canteen. That application was not approved by the 
Mail Center.
    Testifying for the Commission before the arbitration panel, Ms. 
Laurell asserted that the vending machines operated by the Canteen were 
in direct competition with her operation. Additional testimony 
demonstrated that the Canteen, a national corporation, purchased in 
bulk and could offer the same products as those available at the 
Commission facility, but at lower prices, and that the Canteen's low 
prices were part of a ``no profit'' or ``break even'' policy, which was 
directed at benefitting the postal employees. As a result, profit from 
the Commission facility was limited to approximately $24,000 per year, 
which was too low to make Ms. Laurell's facility a viable operation in 
terms of sharing of competing vending machine income.
    The Administrator of the Business Enterprise Program, Michigan 
Commission for the Blind, who was involved in setting up the vendor 
facility at the Mail Center in 1983, believed that the assigned blind 
vendor should have been given priority to operate all food services at 
the facility. Postal Service management disagreed, asserting that a 
blind person could not safely work on the workroom floor because of 
danger from mechanized equipment as evidenced by incidents in which 
postal employees had been hit and injured by mail-moving equipment. The 
Postal Service's position was that blind vendors posed a safety problem 
and that, if it had been determined that the vending machines were to 
be operated by blind vendors, management may have decided to remove the 
machines.

Arbitration Panel Decision

    The key issue of the dispute, as identified by the panel, was the 
extent to which the blind vendor should be given priority in operating 
all the vending facilities at the Detroit Bulk Mail Center. Because the 
Randolph-Sheppard Act limited the priority provided to blind vendors to 
the extent that any facility operated by a blind vendor ``would not 
adversely affect the interests of the United States,'' the panel 
concluded that the Postal Service was not required to approve the 
Commission's request to operate all of the vending machines at the Mail 
Center. Specifically, the panel identified the possibility for injury 
as among those circumstances that might adversely affect the Federal 
Government's interests. Hence, the Postal Service's legitimate safety 
concerns for a blind vendor servicing machines on the workroom floor 
supported its decision not to afford the blind vendor priority in 
operating those facilities. Other factors cited by the panel in support 
of the Postal Service's position included-- (1) the potential negative 
effect on employee morale that would result from a management decision 
to eliminate vending machines from the work area for purposes of 
safety; and (2) the finding that the Canteen-run vending machines on 
the workroom floor were not in ``direct competition'' with the blind 
vendor since the Central Lunchroom operated by the blind vendor was not 
readily accessible to most postal employees.
    While the panel offered the preceding rationale for supporting the 
Postal Service's actions in connection with the workroom floor vending 
machines, the status of those machines could not be conclusively 
decided until the Postal Service fully justified its finding in writing 
to the Secretary, as required under the Act. Accordingly, the panel 
remanded the issue of the working area machines to the Postal Service, 
either to resolve with the Commission or to handle in accordance with 
section 107(b) of the Act.
    As to the non-workroom vending facilities, the panel concluded that 
the blind vendor should be given priority in operating those facilities 
on the basis that--(1) the potential safety hazards that existed on the 
workroom floor were not present at those sites; and (2) the vending 
machines at those locations were situated in non-mail processing areas, 
were relatively close to the Central Lunchroom operated by the blind 
vendor, and were, therefore, in direct competition with the blind 
vendor's operation. Thus, the panel found that the priority requirement 
of the Act had been satisfied and ruled that the operation of vending 
machines in the non-workroom area be turned over to the blind vendor or 
the Commission as soon as possible. In addition, the Postal Service was 
ordered to pay an amount equal to the profits from the operation of 
these machines to the blind vendor or the Commission from the time the 
option to operate those machines became available to the Commission.
    The panel member appointed by the Commission, concurring in part 
and dissenting in part with the majority, wrote a separate opinion in 
which he stated that he would require the Postal Service to make 
restitution to the Commission for its failure to follow the law when it 
denied the blind vendor priority in operating the vending machines at 
the Mail Center. The panel member also dissented from the majority's 
conclusions concerning the alleged safety risks to the blind vendor on 
the workroom floor and the panel's resolution of the direct versus 
indirect competition issue, citing the absence of competent, factual 
evidence from both parties.
    The views and opinions expressed in the arbitration panel decision 
do not necessarily represent the views and opinions of the U.S. 
Department of Education.

    Dated: January 17, 1995.
Judith E. Heumann,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 95-1577 Filed 1-20-95; 8:45 am]
BILLING CODE 4000-01-P  

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