[Federal Register Volume 61, Number 170 (Friday, August 30, 1996)]
[Notices]
[Pages 45947-45948]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22217]


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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 January 22, 1996, an 
arbitration panel rendered a decision in the matter of Johnny Wilson v. 
Georgia Department of Human Resources, (Docket No. R-S/92-4). This 
panel was convened by the U.S. Department of Education pursuant to 20 
U.S.C. 107d-2, upon receipt of a complaint filed by Johnny Wilson.
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, Mary 
E. 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 and other property.

Background

    In October 1990 the Georgia Department of Human Resources, the 
State licensing agency (SLA), announced a vacancy at a new facility, 
No. 1-350. This was a vending machine facility at the United States 
Postal Service Mail Processing Center in Duluth, Georgia. The 
announcement for this facility indicated that a manager and an 
assistant manager would be needed at this location.
    Mr. Johnny Wilson was the successful applicant for this position 
and several weeks later another vendor was selected as the assistant 
manager. The complainant employed his spouse at the facility. The 
assistant manager at various times also employed his spouse and 
occasionally members of his family. The relationship between the two 
vendors became increasingly strained. The SLA initiated action to 
discharge the spouse of each vendor.
    The complainant filed a complaint with the SLA under the State fair 
hearing procedures. Mr. Wilson's complaint included two additional 
grievances. The first concerned the equipment required for the start-up 
of his facility. The equipment to begin operation of complainant's 
facility had been purchased by Georgia Co-op for the Blind and leased 
to the SLA under a lease-purchase agreement that required monthly 
payments. The SLA passed these payments on to Mr. Wilson and the 
assistant manager at facility No. 1-350. This charge was in addition to 
the 12 per cent set-aside fee on net proceeds. Secondly, Mr. Wilson 
grieved the decision of the SLA to place an additional blind vendor at 
a cafeteria facility at the Mail Processing Center.
    A fair hearing was conducted by the SLA on February 21, 1992, 
regarding the three issues: (1) Dismissal of Mr. Wilson's spouse. (2) 
The assignment of the equipment lease payment in addition to the set-
aside fee to complainant's facility. (3) The SLA's proposal to 
establish the cafeteria as a separate facility at the Mail Processing 
Center.
    On March 16, 1992, the Administrative Law Judge (ALJ) ruled in Mr. 
Wilson's favor on the following issues. The ALJ ruled that the SLA had 
exceeded its authority in terminating

[[Page 45948]]

the employment of the vendor's spouse. The ALJ ruled that the monthly 
lease-purchase payments assigned to facility No. 1-350 were in direct 
violation of the Act, Federal regulations, and the SLA's own policy 
manual, all of which require the SLA to provide equipment to blind 
vendors. The ALJ, therefore, directed that the SLA reimburse Mr. Wilson 
for all equipment charges improperly assessed. The ALJ also ruled that 
the SLA's proposal to establish a cafeteria facility at the same 
location as Mr. Wilson's was within the discretion of the SLA.
    On April 1, 1992, Mr. Wilson appealed three portions of the ALJ's 
decision to the Secretary of the U.S. Department of Education. The 
issues appealed were: (1) The ruling on the proposed new cafeteria 
facility. (2) The failure of the ALJ to award interest on the 
reimbursement payments by the SLA to Mr. Wilson for the lease-purchase 
of equipment. (3) The failure of the ALJ to award attorney's fees.
    These issues were pending before a Federal arbitration panel when 
the SLA imposed a three-day suspension without pay on complainant as 
the result of alleged actions taken by Mr. Wilson that impaired the 
assistant manager's ability to perform his duties at facility No.
1-350. Mr. Wilson appealed the SLA's action in a State fair hearing 
proceeding before an ALJ. The ALJ denied Mr. Wilson's claim, and, 
subsequently, the complainant filed a grievance with respect to this 
matter with the Secretary of the U.S. Department of Education. The 
Secretary consolidated this grievance along with the earlier complaint.
    An arbitration hearing was held on this matter on June 29 and 30, 
1994. The issues before the panel were: (1) What remedy, if any, is 
appropriate for the three-day suspension? (2) Did the State agency 
improperly award the cafeteria contract to the detriment of Mr. Wilson, 
and, if so, what is the appropriate remedy? (3) Can the arbitration 
panel award attorney's fees to Mr. Wilson, and, if so, is such an award 
justified? Prior to the hearing, the parties resolved the issue 
concerning interest on the leased equipment payments that Mr. Wilson 
made to the SLA.

Arbitration Panel Decision

    The arbitration panel ruled that the SLA did not or would not 
violate the Randolph-Sheppard Act or any regulations promulgated under 
the Act by assigning the license to operate the cafeteria facility to a 
vendor other than Mr. Wilson. The panel's majority concluded, with one 
dissent, that the conflict between the agency's duty to protect and 
maximize the earnings of existing vendors and its duty to maximize the 
number of vendors operating viable facilities is a matter committed to 
the SLA's discretion. Among other considerations, even if Mr. Wilson's 
vending facility revenues were to be reduced as he projected, his 
facility would remain one of the most highly remunerative in the entire 
State.
    The panel also ruled that the complainant failed to show that the 
refusal to award attorney's fees in the State fair hearing violated any 
State or Federal statute or regulations.
    Finally, the panel ruled that the appropriate remedy for the 
concededly improper suspension of the complainant was the sum withheld 
for his three-day suspension plus interest at the Federal funds rate 
together with costs, including reasonable attorney's fees, incurred by 
Mr. Wilson in contesting the matter in the State fair hearing 
proceedings and in the arbitration proceedings. The panel majority 
concluded, with one dissent, that an award of attorney's fees was 
appropriate and not barred by the Eleventh Amendment to the United 
States Constitution.
    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 27, 1996.
Judith E. Heumann,
Assistant Secretary Special Education and Rehabilitative Services.
[FR Doc. 96-22217 Filed 8-27-96; 8:45 am]
BILLING CODE 4000-01-P