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Arbitration Panel Decision Under the Randolph-Sheppard Act

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Department of Education.


Notice of arbitration panel decision under the Randolph-Sheppard Act.


The Department gives notice that on June 17, 2005, an arbitration panel rendered a decision in the matter of Arizona Department of Economic Security, Rehabilitation Services Division v. United States Postal Service (Docket No. R-S/03-4). This panel was convened by the U.S. Department of Education, under 20 U.S.C. 107d-1(b), after the Department received a complaint filed by the petitioner, Arizona Department of Economic Security, Rehabilitation Services Division.

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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 5022, Potomac Center Plaza, Washington, DC 20202-2800. Telephone: (202) 245-7374. If you use a telecommunications device for the deaf (TDD), you may call the Federal Relay Service (FRS) at 1-800-877-8339.

Individuals with disabilities may obtain this document in an alternative format (e.g., Braille, large print, audiotape, or computer diskette) on request to the contact person listed in the preceding paragraph.

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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.


This dispute concerns the alleged improper payment of commissions to the United States Postal Service (USPS) by two blind licensees in violation of the Act (20 U.S.C. 107 et seq.) and the Start Printed Page 60804implementing regulations in 34 CFR part 395.

A summary of the facts is as follows: The Arizona Department of Economic Security, Rehabilitation Services Division, the State licensing agency (SLA), alleged that between December 1995 and July 2001, Mr. Robert Kunau operated a vending facility at the Rio Salado Post Office and paid to USPS a 10 percent commission on his gross sales totaling $116,684.02.

Similarly, the SLA alleged that since 1988 Mr. Scott Weber operated a vending facility at the Phoenix General Mail Facility (PGMF). In 1995, Mr. Weber assumed the operation of additional vending machines at PGMF. From October 1995 to May 2001, Mr. Weber also paid to USPS a 10 percent commission on his gross sales totaling $88,444.57. Both vendors alleged that they paid the 10 percent commission to USPS as required by the agency until they were advised by their attorney to cease payment.

Arbitration Panel Decision

The issue heard by the panel was whether the actions taken by USPS violated the Act and implementing regulations concerning the placement and operation of vending facilities at the Rio Salado Post Office and the Phoenix General Mail Facility. If there was a violation, the panel was asked to determine the appropriate remedy.

After reviewing all of the records and hearing testimony of witnesses, the panel concluded that the Act requires Federal agencies to give priority to blind vendors in the operation of vending facilities on Federal properties. To accomplish this, Federal agencies and SLAs enter into permit agreements authorizing the operation of vending facilities by licensed blind vendors. However, the panel noted that the Act does not authorize Federal agencies to collect commissions from a blind vendor or the SLA without the authorization of the Secretary of Education. Moreover, Federal agencies are not permitted to go outside the Department of Education's regulations and substitute a negotiated vending agreement in place of the permit system.

Therefore, because USPS failed to obtain authorization from the Secretary of Education, the collection of commissions was a violation of the Act. Accordingly, the panel ruled that both Mr. Kunau and Mr. Weber were damaged by USPS's violation of the Act in the amounts of $116,684.02 and $88,444.57, respectively.

The panel further directed that, subject to any future finding by a court of competent jurisdiction that this order exceeds the panel's authority under the Act, USPS must reimburse Mr. Kunau and Mr. Weber the amounts that they were damaged as a result of USPS's violation of the Act.

One panel member dissented.

The views and opinions expressed by the panel do not necessarily represent the views and opinions of the U.S. Department of Education.

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Dated: October 14, 2005.

John H. Hager,

Assistant Secretary for Special Education and Rehabilitative Services.

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[FR Doc. 05-20929 Filed 10-18-05; 8:45 am]