[Federal Register Volume 59, Number 165 (Friday, August 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-21137]


[[Page Unknown]]

[Federal Register: August 26, 1994]


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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 August 31, 1991, an arbitration 
panel rendered a decision in the matter of Fred V. Scarpello v. State 
of Nebraska, Department of Public Institutions, Division of 
Rehabilitative Services (Docket No. R-S/90-3). This panel was convened 
by the U.S. Department of Education pursuant to 20 U.S.C. 107d-1(a) 
upon receipt of the original complaint filed by petitioner Fred 
Scarpello on January 2, 1990, and subsequently amended on June 3, 1991. 
The Randolph-Sheppard Act (the Act) creates a priority for blind 
individuals to operate vending facilities on Federal property. Under 
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 State agency's 
decision, the licensee may complain to the Secretary, who is then 
required to convene an arbitration panel to resolve the dispute.

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, 400 Maryland 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 section 107d-2(c) of the 
Randolph-Sheppard Act, the Secretary publishes a synopsis of 
arbitration panel decisions.

Background

    The complainant, Fred V. Scarpello, is a blind vendor licensed by 
the Nebraska Department of Public Institutions, the SLA under the 
provisions of the Act. Pursuant to a permit approved in 1978 by the 
U.S. Postal Service and a vendor operator's agreement between Mr. 
Scarpello and the SLA, Mr. Scarpello operates a vending facility on the 
second floor of the Main Post Office, 1124 Pacific Street, Omaha, 
Nebraska.
    In 1989, the SLA submitted two applications for permits for the 
second floor of the Main Post Office. One permit covered the operation 
of a ``snack bar facility,'' and attachment ``C'' to that application 
specified the items to be sold as ``hot foods and salads.'' The other 
permit represented an updated permit and covered the items that Mr. 
Scarpello was in fact already vending under his current vending 
agreement.
    The SLA granted the complainant's request for an evidentiary 
hearing. The issues that Mr. Scarpello wanted the arbitration panel to 
address were whether the SLA was splitting his location into two 
separate locations with separate permits that would allow for another 
vendor, and if that were the case, whether he would be entitled to have 
the additional location and permit automatically awarded to him. The 
State hearing officer ruled that the two permits already had been 
issued and that the complainant was not jeopardized by the new permits.
    In July, 1990, Mr. Scarpello filed an action in the U.S. District 
Court for the State of Nebraska against the Director of the SLA and the 
U.S. Postal Service requesting that construction and remodeling of the 
new facilities be halted. This suit resulted in a settlement agreement 
and a dismissal of the action without prejudice on September 21, 1990. 
The settlement agreement permitted the Postal Service to proceed with 
planned construction and remodeling of the second floor lunchroom 
pursuant to the two permits that already had been approved. However, 
the parties agreed that the hot food line would not be implemented 
pending the outcome of the arbitration panel decision.

Arbitration Panel Decision

    The arbitration panel ruled that the SLA, by entering into a 
vending agreement with the Postal Service to provide hot food service, 
did not violate the vending agreement between the SLA and Mr. Scarpello 
and that complainant's license was not being compromised. The new 
permit for the second facility described the facility as a ``Snack Bar 
Facility,'' and the attachments to the Hot Food Permit made it clear 
that the services provided were different from the complainant's 1978 
permit that was being updated. The SLA's decision to move, remodel, and 
enlarge the location and size of the food facilities on the second 
floor of the Main Post Office was in response to requests from postal 
employees to have an expanded dining area and to have served hot food 
different from the vended food that was available. The decision to 
offer hot foods and salads also meant that different equipment and 
facility design would be necessary.
    The Panel rejected complainant's argument that he should be the 
vendor involved in any vending agreement issued pursuant to the ``Hot 
Food Permit'' because it would reduce his income and provide unfair 
competition.
    The panel ruled that the Hot Food Permit did not provide for a 
facility similar to that of complainant and that there is nothing in 
the Randolph-Sheppard Act or regulations that prohibits competition 
among blind vendors. The panel considered that, if the SLA were to have 
proposed entering into an agreement to provide an identical facility as 
complainant's, a different issue would be involved. Accordingly, the 
panel held that the SLA could enter into a vending agreement with 
another blind licensee pursuant to the ``Hot Food Permit.''
    One panel member dissented, arguing that complainant's original 
permit and agreement allowed him to serve hot food and to sell and 
serve salads prepared off the premises and sold over his counter and 
from the vending machines. This panel member believed that any change 
in the permit should have included a discussion and concurrence by the 
Committee of Blind Vendors pursuant to 20 U.S.C. 107(b)(l)(2). This 
panel member stated that the permit for ``hot food'' service was in 
violation of the vending agreement between the SLA and the complainant 
and that entering into another vending agreement with a vendor other 
than Mr. Scarpello violated the Act.
    Complainant Scarpello filed a motion in U.S. District Court for the 
State of Nebraska on August 14, 1992, seeking judicial review of the 
panel's decision. The court ruled in an opinion dated June 13, 1994, 
that plaintiff (Scarpello) failed to show that the ``arbitration 
panel's decision was arbitrary and capricious and insupportable on any 
rational basis.'' The District Court found that the evidence supported 
the panel's ruling that Mr. Scarpello's vending permit did not include 
``hot food and salads'' and that his permit was not being split as the 
result of the SLA receiving a second permit for another vending 
location at the same site as plaintiff. Likewise, the court found that 
the evidence supported the panel's conclusion that the new permit did 
not threaten plaintiff's livelihood. The District Court ruled that 
plaintiff's complaint should be dismissed and that the arbitration 
panel decision should be affirmed.
    The views and opinions expressed by the panel do not necessarily 
represent the views and opinions of the U.S. Department of Education.

    Dated: August 22, 1994.
Howard R. Moses,
Acting Assistant Secretary for Special Education and Rehabilitative 
Services.
[FR Doc. 94-21137 Filed 8-25-94; 8:45 am]
BILLING CODE 4000-01-P