[Federal Register Volume 68, Number 31 (Friday, February 14, 2003)]
[Notices]
[Pages 7515-7517]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3747]


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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: The Department gives notice that on January 31, 2002, an 
arbitration panel rendered a decision in the matter of Richard Bird v. 
Ohio Rehabilitation Services Commission, Bureau of Services for the 
Visually Impaired (Docket No. R-S/00-9). This panel was convened by the 
U.S. Department of Education, under 20 U.S.C. 107d-1(a), after the 
Department received a complaint filed by petitioner, Richard Bird.

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 
property.

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Background

    This dispute concerns the alleged failure of the Ohio 
Rehabilitation Services Commission, Bureau of Services for the Visually 
Impaired, the designated State licensing agency (SLA), to properly 
administer the Randolph-Sheppard vending facility program regarding 
vending machine income-sharing by a Federal property managing agency in 
violation of the Act (20 U.S.C. 107 et seq.) and the implementing 
regulations in 34 CFR part 395.
    A summary of the facts is as follows: since February 1994, the 
complainant, Richard Bird, operated a snack bar and three rooms with 
vending machines at the Cleveland, Ohio, Main Post Office under a 
permit agreement issued to the SLA by the U.S. Postal Service (USPS) in 
accordance with 34 CFR 395.16 and 395.34. In addition to the 
complainant's three rooms with vending machines, there are five rooms 
with vending machines at the Main Post Office that were not included 
within USPS's permit agreement because they are operated by a private 
vendor.
    Complainant receives 30 percent of the commissions paid to USPS by 
the private vendor from the operation of its vending machines as 
provided by the Act (20 U.S.C. 107d-3) and 34 CFR 395.32. USPS had 
determined that those vending machines were not in direct competition, 
but rather indirect competition, with the vending machines operated by 
the complainant. One hundred percent of the commissions paid to USPS 
would be paid to the complainant if the vending machines of the private 
vendor were considered to be in direct competition with complainant's 
vending machines.
    Since 1996, complainant contended that the vending machines of the 
private vendor were in direct competition with his vending machines. 
Complainant further alleged that income from the operation of his 
vending facility had declined since 1994 due in large part to employees 
at the Main Post Office being moved to other locations and a reduction 
in the commission rate paid by the private vendor to USPS. To offset 
this decline, complainant requested that vending machines located in 
the Parking, Vehicle Maintenance, and Administration Building of the 
Main Post Office Complex operated by a private vendor be added to his 
vending facility.
    In 1997, the SLA requested that USPS issue permits to operate the 
vending machines in the Parking, Vehicle Maintenance, and 
Administration Building in the Main Post Office Complex. USPS denied 
the SLA's request. Since 1998, SLA personnel have maintained that the 
vending machines at the Main Post Office operated by the private vendor 
were in direct, not indirect, competition with the complainant's 
vending machines. However, the SLA did not file a complaint with the 
U.S. Department of Education seeking Federal arbitration on the 1997 
denial of the permits for the Parking, Vehicle Maintenance, and 
Administration Building or the direct versus indirect competition issue 
until June 1999. The SLA had requested that the June 1999 complaint be 
held in abeyance pending the outcome of this arbitration decision.
    Complainant filed a grievance in October 1999 with the SLA. He 
alleged that the SLA failed to perform as his advocate by not 
aggressively challenging the actions of USPS to protect the value of 
his vending facility because of declining income. Complainant sought to 
be represented at the State of Ohio fair hearing on his grievance by a 
nonattorney. The Hearing Examiner ruled prior to the hearing that Ohio 
Law prohibited the nonattorney from representing complainant. The 
parties agreed to postpone the State fair hearing so that complainant 
could obtain proper representation.
    Subsequently, complainant filed a complaint seeking Federal 
arbitration of his grievance. A hearing of this matter was held on July 
19 and 20, 2001.

Arbitration Panel Decision

    The issues heard by the panel were-- (1) Whether the SLA prevented 
complainant from having access to the State administrative remedy 
procedures provided by the Act; (2) whether the SLA properly 
distributed unassigned vending machine income to complainant; (3) 
whether the SLA has the right to establish new vending facilities that 
continue to serve customers, who were originally assigned to 
complainant's building, after they have relocated to other USPS 
buildings; and (4) whether the SLA attempted to limit complainant's 
income by installing a second vending facility at the Cleveland Main 
Post Office Building.
    Concerning issue number one, the panel ruled that complainant 
voluntarily chose to bypass the SLA State fair hearing process and 
sought remedy from a Federal arbitration panel.
    The panel determined regarding issue number two that the SLA did 
not properly advocate for the complainant to ensure him the appropriate 
income from the vending machines in the five vending rooms not assigned 
to him. Further, the panel concluded that the vending machines at issue 
operated by the private vendor were in direct, not indirect, 
competition with complainant's vending machines.
    Regarding issue number three, the panel found that the complainant 
established at the hearing that it was the practice of the SLA to allow 
blind vendors to ``follow'' their customers when they relocate. 
Therefore, the panel concluded that the SLA should aggressively pursue 
obtaining a permit for the postal facilities where complainant's 
customers have relocated.
    Concerning issue number four, after consideration of the SLA's 
testimony that they were simply considering the establishment of a 
second vending facility at the Cleveland Post Office, but had not made 
a formal decision to do so, the panel ruled that issue number four was 
not ripe for consideration by the panel. However, the panel cautioned 
the SLA to consider complainant's declining income before making any 
decision to place another vendor at the Cleveland Post Office.
    Finally, the panel ruled that the SLA owed complainant a duty to 
preserve the value of his vending facility and income derived from it. 
The panel concluded that the SLA had not properly performed that duty 
by its failure to assert the priority provisions of the Act.
    Accordingly, the panel awarded the complainant $30,000 as 
compensation for vending machine income lost from 1996 through 2001 due 
to USPS's determination that the five areas with vending machines 
operated by the private vendor were not in direct competition with 
complainant's vending machines. The panel arrived at the $30,000 figure 
by calculating the difference between the commission compensation 
complainant actually received during those years and the commission 
compensation the panel believed he should have received given the 
panel's belief that the private vendor's machines are in direct 
competition with complainant's vending machines.
    The views and opinions expressed by the panel do not necessarily 
represent the views and opinions of the U.S. Department of Education.

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 3232, Mary E. 
Switzer Building, Washington, DC 20202-2738. Telephone: (202) 205-8536. 
If you use a telecommunications device for the deaf (TDD), you may call 
the TDD number at (202) 205-8298.

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    Note: The official version of this document is the document 
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    Dated: February 11, 2003.
Robert H. Pasternack,
Assistant Secretary for Special Education and Rehabilitative Services.
[FR Doc. 03-3747 Filed 2-13-03; 8:45 am]
BILLING CODE 4000-01-P