[Federal Register Volume 60, Number 14 (Monday, January 23, 1995)]
[Notices]
[Pages 4408-4409]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1579]



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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 October 19, 1992, an 
arbitration panel rendered a decision in the matter of Keith McMullin 
v. Department of Services for the Blind, State of Washington, (Docket 
No. R-S/91-8). This panel was convened by the Secretary of the U. S. 
Department of Education pursuant to 20 U.S.C. 107d-1(a), upon receipt 
of a complaint filed by petitioner, Keith McMullin, on April 29, 1991. 
The Randolph-Sheppard Act provides a priority for blind individuals to 
operate vending facilities on Federal property. Under this section of 
the Randolph-Sheppard Act (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 fair 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 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, 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.

SUPPLEMENTARY INFORMATION: Pursuant to the Randolph-Sheppard Act (20 
U.S.C. 107d-2(c)), the Secretary publishes a synopsis of arbitration 
panel decisions affecting the administration of vending facilities on 
Federal property.

Background

    The complainant, Keith McMullin, is a blind vendor licensed by the 
respondent, the Washington Department of Services for the Blind, 
pursuant to the Randolph-Sheppard Act, 20 U.S.C. 107 et seq. The 
Department is the SLA responsible for the operation of the State of 
Washington's vending facility program for blind individuals.
    On November 13, 1964, the General Services Administration (GSA) 
issued a permit to the SLA to operate a vending facility at the Federal 
Office Building in Richland, Washington. The articles to be vended 
were-- ``magazines, cigars, cigarettes and related tobacco items, 
coffee, candy, novelties, ice cream, cold beverages, greeting cards, 
cookies, etc.'' Mr. McMullin operated the vending facility from the 
time the building was opened. At that time, a fountain head and jet 
spray beverage equipment were installed for dispensing soft drinks and 
juices.
    About 1965, a cafeteria operation was added to the Federal Office 
Building, and it was operated under contract between GSA and a private 
concessionaire. A dispute arose between Mr. McMullin and the operator 
of the cafeteria concerning the sale of certain items, including 
beverages.
    On October 22, 1970, the Contracting Officer of the Operations 
Branch of the Buildings Management Division of GSA wrote a letter to 
the SLA to resolve the dispute. The letter stated in relevant part, 
``The blindstand has exclusive right to sell carbonated drinks. . . and 
any other items prepackaged by the maker in individual servings. . . 
The blindstand is not authorized to sell coffee and other hot drinks, 
as these are to be sold by the cafeteria operator exclusively.'' The 
letter went on to state that the policy statement had been incorporated 
into the cafeteria operator's contract and had been discussed with the 
building manager in Richland and with the complainant at the vending 
facility. Further, GSA believed that, with the agreement of the SLA, 
the issuance of the letter would become a part of the operator's 
agreement under which Mr. McMullin's vending facility operated.
    In the years that followed, the SLA treated the arrangement made by 
GSA as granting the vending facility, and therefore the licensed 
vendor, the exclusive right to sell carbonated beverages. However, on 
May 16, 1975, GSA informed the SLA that it did not believe the 
arrangement between them gave Mr. McMullin the exclusive right to sell 
consumable food products, such as soft drinks, ice cream, and yogurt. 
The complainant objected to what he believed to be a violation of his 
exclusive right, and the SLA supported his position. GSA did not pursue 
this action until March 14, 1979 when the Chief of Operations Branch of 
the Buildings Management Division of GSA wrote to the SLA stating, ``We 
do not object to the blind operator selling other drinks, but we do not 
agree that he has exclusive rights.''
    In 1986 the private concessionaire operating the cafeteria ceased 
doing business, and the contract was assigned to the SLA. Operation of 
the cafeteria was awarded by contract to another blind vendor. The 
contract required the sale of soft drinks as part of the full-line 
cafeteria food service. However, in a letter dated November 8, 1988, 
the SLA contacted GSA regarding the operation of the cafeteria. The SLA 
stated that it did not request any change regarding the sale of 
carbonated beverages because Mr. McMullin had a permit giving him 
rights to sell those beverages. The cafeteria continued to operate 
without selling carbonated beverages until May 1989 when it again came 
to the attention of GSA personnel.
    In a letter dated September 14, 1989, the Director of Real Property 
Management of GSA informed the Director of the SLA that a new permit 
application should be made for the operation of the vending facility 
because the current permit did not comply with regulations governing 
the operation of such a facility under the Randolph-Sheppard Act. In 
addition, GSA stated that provisions should be made for the sale of 
soft drinks by the cafeteria.
    The SLA made application for new permits for the operation of the 
facility and the cafeteria. The application for [[Page 4409]] the 
cafeteria designated the facility as a snack bar, which could sell only 
one hot meal per day, so that it could be operated by a permit rather 
than a contract. On August 23, 1990, GSA issued new permits effective 
January 1, 1990. The permit for the snack bar, which was formerly the 
cafeteria, listed items to be sold as soft drinks, juice, coffee, and 
other beverages. Likewise, the permit for the vending facility operated 
by Mr. McMullin listed the same items.
    Mr. McMullin requested and received an evidentiary hearing from the 
SLA regarding his exclusive rights to sell carbonated beverages at the 
Federal Office Building in Richland, Washington. On April 9, 1991, an 
Administrative Law Judge (ALJ) for the State of Washington rendered a 
decision stating that, ``[t]he petitioner did not have an exclusive 
permit to sell carbonated beverages and other related items at the 
canteen at the Richland Federal Building.'' Therefore, the ALJ denied 
Mr. McMullin's petition for relief and for attorney's fees. 
Subsequently, the SLA adopted the ALJ's opinion as final agency action.
    On April 29, 1991, the complainant filed a request with the 
Secretary of Education to convene a Federal arbitration panel to review 
the decision of the SLA. An arbitration hearing was held March 12 and 
13, 1992.

Arbitration Panel Decision

    A majority of the panel ruled that Mr. McMullin did not have an 
exclusive right to sell carbonated beverages in the Richland Federal 
Office Building. The panel concluded that, under the Randolph-Sheppard 
Act, the categories of items to be sold by a blind vendor are fixed in 
the permit granted by a Federal property managing agency to a State 
licensing agency. The blind vendor is not the recipient of that permit, 
nor does the vendor have a contractual relationship with either the 
property managing agency or the State agency. The vendor receives only 
a license to operate the vending facility under the terms of the permit 
held by the State agency. The license is subject to revocation or 
alteration by the SLA. The panel reasoned that Mr. McMullin had 
benefited from the Department's advocacy of what was referred to as his 
``exclusive right'' to sell carbonated beverages and that, when GSA 
requested the SLA to submit new permits for the vending facility and 
the cafeteria, there was nothing to preclude the SLA from changing the 
categories of items to be sold at the vending facility. The panel 
member representing complainant dissented from the majority on this 
point arguing that the governing regulations require involvement of a 
blind vendor in selection of items to be sold and that the SLA had 
failed to advocate the complainant's position.
    A majority of the panel ruled that Mr. McMullin was not entitled to 
substantive relief. A different majority concluded that the SLA had so 
frequently asserted that Mr. McMullin had an exclusive right to sell 
carbonated beverages that its conduct provided a strong basis for 
complainant to contest what he believed to be an illegal and improper 
revision of those rights. Consequently, in asserting those rights, Mr. 
McMullin was forced to incur considerable legal fees and other costs in 
challenging changes made regarding operation of his vending facility. 
That majority ruled that Mr. McMullin was entitled to an award of 
attorney's fees and other costs that he had incurred in asserting his 
rights because of his reliance on the SLA's longstanding support of his 
position. However, the panel member representing the SLA considered 
that attorney's fees should be awarded only to vendors who succeed on 
the merits of their claims.
    The final award by the arbitration panel held that Mr. McMullin was 
not entitled to a reinstatement of the alleged exclusive right to sell 
carbonated beverages. The panel did not award him any damages. However, 
the award did direct the SLA to compensate Mr. McMullin for the 
attorney's fees and other litigation costs and expenses he incurred in 
challenging the revisions made in the permit held by the SLA.
    The views and opinions expressed by the panel 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. 95-1579 Filed 1-20-95; 8:45 am]
BILLING CODE 4000-01-P