[Federal Register: April 15, 1997 (Volume 62, Number 72)] [Notices] [Page 18335-18336] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr15ap97_dat-35] ======================================================================= ----------------------------------------------------------------------- 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 ----------------------------------------------------------------------- SUMMARY: Notice is hereby given that on November 20, 1996, an arbitration panel rendered a decision in the matter of Chester Smalley v. New York State Commission for the Blind and Visually Handicapped (Docket No. R-S/95-7). This panel was convened by the U. S. Department of Education pursuant to 20 U.S.C. 107d-1(a), upon receipt of a complaint filed by petitioner, Chester Smalley. 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 in the Federal Register a synopsis of each arbitration panel decision affecting the administration of vending facilities on Federal and other property. Background Mr. Chester Smalley, complainant, has operated a vending facility at the Roswell Park Cancer Institute, Buffalo, New York, from January 1981 to the present. Until September 1993, complainant's vending facility operation [[Page 18336]] at the hospital consisted of a dry stand in the main building and approximately 24 satellite vending machines located in other buildings throughout the hospital complex. The machines were provided by a commercial vending company, and Mr. Smalley restocked some of the machines and received a monthly commission. In June 1993, the hospital undertook an extensive construction and renovation program resulting in the hospital administration requesting additional vending machines from the New York Commission for the Blind and Visually Handicapped, the State licensing agency (SLA). The SLA provided those machines at a new leased building located at Main and Virginia Streets. Previously when additional machines were provided, Mr. Smalley received commissions from the vending machines. However, with respect to the machines at the new leased building, Mr. Smalley did not receive commissions. In September 1993, the Tower Building, which previously housed vending machines operated by the complainant, was demolished. Complainant alleged that he lost income from those machines. In October 1993, vending machines were placed in the new leased building at Main and Virginia Streets. At that time, the SLA determined that the income from those machines would accrue directly to the SLA. The SLA determined that the new leased building was geographically separate from Mr. Smalley's vending facility. Consequently, Mr. Smalley would not be receiving the commissions from the machines since, in the opinion of the SLA, the machines in the new leased building were not in direct competition with his operation. The complainant objected to this new arrangement. He made inquiries to the SLA regarding the matter and received a written explanation from the SLA on February 3, 1994, concerning the placement of the new machines at the leased building and the reassignment of the commissions. Mr. Smalley requested and received an administrative review of the matter. The SLA, in a decision dated April 29, 1994, affirmed its earlier determination. Subsequently, complainant requested and received a State fair hearing on June 30, 1994. By decision rendered August 4, 1994, the New York Department of Social Services upheld the Commission for the Blind and Visually Handicapped decision concerning the allocation of the vending machine income. Mr. Smalley requested the Secretary of Education to convene a Federal arbitration panel to hear this grievance. An arbitration hearing was held on August 13, 1996. Arbitration Panel Decision The issue heard by the arbitration panel as stipulated by the parties was as follows: Whether the determination of the New York State Department of Social Services confirming the action of the Commission for the Blind and Visually Handicapped with respect to the allocation of vending machine income at leased property on Main and Virginia Streets was arbitrary, capricious, or unlawful; and if so, what should the remedy be? The majority of the panel ruled that the scope of Chester Smalley's vending operation on the Roswell Park property was defined in the license granted to him by the SLA in 1986. The complainant's vending facility at that time included the newsstand and vending machines in five ``free standing'' buildings. The panel noted that these properties continue to be within the scope of Mr. Smalley's facility and will also continue when the construction project has been completed and personnel returned from the leased property at Main and Virginia Streets to the Roswell Park complex. The panel further ruled that the SLA erred in its interpretation of Federal regulations in 34 CFR 395.1(f) and (h) and 395.32 regarding the definition of ``individual location, installation or facility'' and the definition of ``direct competition.'' Specifically, the panel ruled that the SLA's interpretation of these definitions to determine that the leased space at Main and Virginia Streets was a separate individual location or facility and that the commissions from the vending machines should accrue to the SLA was arbitrary. The panel stated that under the Federal regulations, in order for the revenues from the vending machines at the leased building to accrue to the SLA, the SLA would have to show that there was no blind vendor on that property. The panel ruled that Chester Smalley's original and longstanding license included the outlying buildings on Roswell Park property. Therefore, the panel found that the determination of the New York State Department of Social Services confirming the action of the SLA to allocate the vending machine income from the leased property at Main and Virginia Streets to the SLA was arbitrary. Based upon the foregoing, the panel reversed the decision of the New York State Department of Social Services. Additionally, the majority of the panel ordered the SLA to make complainant whole for the vending machine commissions from the leased site during the period of October 1, 1993, to the date of the decision and prospectively. The panel also directed the SLA to pay complainant the cost of bringing this action and attorney's fees. One panel member dissented. The views and opinions expressed by the panel do not necessarily represent the views of the Department of Education. Dated: April 9, 1997. Judith E. Heumann, Assistant Secretary for Special Education and Rehabilitative Services. [FR Doc. 97-9650 Filed 4-14-97; 8:45 am] BILLING CODE 4000-01-P